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New Zealand-based Fletcher Building has warned that continued economic, political and geopolitical uncertainty is likely to affect its first-half fiscal 2027 earnings, with a meaningful recovery in underlying volumes not expected until calendar 2027. The construction materials company returned to an annual group net profit of NZD 228 million, compared with a loss of NZD 419 million in the previous year. The improvement was supported by the sale of its Construction division and non-core assets. Revenue from its materials and distribution segment also increased nearly 10 per cent to NZD 5.92 billion.
New Zealand construction materials company Fletcher Building has cautioned that a volatile operating environment will weigh on its first-half fiscal 2027 earnings, even as the company returned to profit for the full year.
Shares of the Auckland-based company rose as much as 6.4 per cent to NZD 3.98, their highest level since April 2024.
Fletcher Building said ongoing economic, political and geopolitical uncertainty would affect its performance in the first half of fiscal 2027. It also expects a meaningful recovery in underlying volumes only in calendar 2027.
The company returned to an annual group net profit of NZD 228 million, compared with a loss of NZD 419 million in the previous year. The improvement was helped by asset sales, including the divestment of non-core operating businesses.
In January, Fletcher Building agreed to sell its flagship Construction division to a unit of France's VINCI for NZD 315.6 million. The sale came as weak construction activity and difficult economic conditions continued to affect the New Zealand and Australian markets.
Revenue from Fletcher Building's materials and distribution segment increased nearly 10 per cent to NZD 5.92 billion for the year ended June 30.
Managing Director and CEO Andrew Reding said the company's core manufacturing divisions performed well despite difficult trading conditions. He also attributed the improvement in operating cash generation to continued focus on operational and capital discipline.
Fletcher Building did not declare a dividend for the third consecutive year. The company said it expects to reset its dividend policy once it begins generating positive free cash flow and moves into the lower half of its targeted net debt range.
The outlook reflects the continued weakness in construction activity across its key markets, with the company expecting demand conditions to remain challenging before a more meaningful recovery takes shape in 2027.
Source Reuters
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