120 jobs go as Fletcher Building insulation deals dry up

Fletcher Building said changes in Australian Government policy on home insulation have reduced earnings in its insulation business there, which is scaling back production and cutting 120 jobs.

Operating earnings for the Australian business for the full year are forecast to be $12 million, compared with operating earnings of $23 million in the six months to December 31, 2009. This includes one-off costs of $18 million for redundancy and inventory management costs.

The company yesterday confirmed that its half-year net earnings after tax will be within the analysts' consensus range as at February of $278 million to $303 million.

The company said it scaled back production at its glasswool insulation plant at Dandenong, Melbourne, following the suspension of operations at the Rooty Hill, Sydney, glasswool insulation plant in March. It had excessive inventory.

The moves came after the Australian Government terminated it stimulus package, aimed at insulating 2.7 million houses, on February 19. Fletcher Insulation general manager David Isaacs said the loss of 120 jobs was regrettable.

Fletcher shares closed down 9c to $8.43 yesterday.

- NZPA