Views Article – Sharenet Wealth

Australasia, News

NZ’s Fletcher Building warns of $129 mln loss for 2020, supply chain challenges

(Adds CEO comment, capex guidance and background of layoffs)

Aug 11 (Reuters) – New Zealand’s Fletcher Building on Tuesday forecast its first annual net loss in two years and warned of persistent challenges across its supply chains in the year ahead due to disruptions caused by the coronavirus pandemic.

The country’s largest construction firm expects a net loss of NZ$196 million ($129 million) for the year ended 30 June, compared with a profit of NZ$164 million last year.

“Through the FY20 year-end process we have decided to increase the provisions to complete our historical construction projects,” Fletcher Building Chief Executive Ross Taylor said in a statement.

About 50% of its provisions for the year were due to reduced productivity on key projects, it added.

Like their global peers, construction firms in New Zealand have been hit hard by lockdowns to curb the spread of the coronavirus, which have disrupted industrial activity and delayed projects.

In May, Fletcher flagged plans to lay off about 10% of its workforce in a bid to reduce costs.

On Tuesday, the company added that total capital spending for 2020 is now expected to be NZ$232 million, down from its initial guidance of between NZ$275 to NZ$325 million.

Fletcher is set to release its 2020 earnings result on Aug. 19.

($1 = 1.5172 New Zealand dollars) (Reporting by Shriya Ramakrishnan in Bengaluru Editing by Richard Pullin)


© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.