Fletcher Building downgrades sitting at $400m-plus as announcement looms

Fletcher Building's AGM last October. Photo/Jason Oxenham

Fletcher Building is this morning due to announce further losses from its Building and Interiors division, already down by more than $400 million.

The NZX listed giant with a market capitalisation of $5.1b will this morning reveal the true extent of issues with its big construction jobs but already the business has cut guidance for its full-year earnings by around $415m.

A series of downgrades were announced throughout last year. They were:

• In February, it lowered expectations from that division by $20m;
• In March, it downgraded operating earnings by a further $110m (operating earnings downgraded from $720m to $760m to $610m to $650m);
• In July, it cut earnings by $85m to $125m;
• In October, it cut guidance by a further $160m.

Those four announcements swiped a total maximum of $415m off the balance sheet, due to losses from big construction projects: Christchurch's Justice and Emergency Precinct and Auckland's NZ International Convention Centre.

Some reports say further losses to be announced today could be as much as $170m but Fletcher has been in a trading halt since last Thursday so can make no public statements.

Fletcher yesterday invited media to a 10am press conference at its Penrose headquarters, saying chief executive Ross Taylor and chief financial officer Bevan McKenzie would present.

That will be followed by a question and answer session.

No mention was made of any presentation or attendance by chairman Ralph Norris.

In October, Norris said: "I want to offer my personal apology to our shareholders. Mistakes have been made and responsibility ultimately rests with the board. As we stated at our full year results briefings, we fully accept this responsibility.

"Our focus now is on delivering these legacy projects to the highest quality for our clients, and mitigating future losses.We recognise our shareholders will want transparency over the remaining risk profile attached to our B+I project pipeline," he said.