Fletcher Building reported a disastrous $227 million loss, largely attributed to legacy construction projects and plumbing issues in Perth, Australia. The company anticipates a further decline in earnings before interest and tax (EBIT) to around $450 million in FY25 due to a 10-15% decrease in volumes.
Significant losses stemmed from legacy construction projects, including the New Zealand International Convention Centre, where steel replacement added to the cost. Plumbing issues in Perth, attributed by some to Fletcher's Iplex (though the company maintains it was due to poor installation), resulted in a $15 million provision for remediation. A class-action lawsuit regarding these issues is underway.
Fletcher Building is exploring strategic options for its Fletcher Living housing division, including potential capital partnerships. The company achieved full completion on the PÅ«hoi to Warkworth motorway, and other major projects are on track for completion in 2025. No dividend will be paid for the full year.
Acting CEO Nick Traber stated that uncertainties are gradually dissipating. Acting chair Barbara Chapman highlighted the negative impact of legacy construction cost provisions and ongoing plumbing issues in Western Australia on the company's reputation and financial performance.