18 Feb 2015

Fletcher Building profit down

1:32 pm on 18 February 2015

One-off costs have knocked Fletcher Building's half-year profit.

The building and construction company made a net profit of $114 million in the six months to December, a decrease of 25 percent compared with the same period a year earlier, due to a $66 million write-down of goodwill and site closure costs.

Excluding these items, the company's underlying net profit rose 11 percent to $171 million.

Fletcher Building chief executive, Mark Adamson, said the result has been driven by strong activity in New Zealand, with a buoyant construction industry driving strong demand for its building products.

Underlying operating profit rose 20 percent in New Zealand, with forward orders stood at $2 billion dollars.

But despite New Zealand's strong performance, total revenue rose a modest 1 percent to $4.327 billion, as other markets delivered mixed results.

Mr Adamson said Australia's residential market performed strongly, but weakness in the mining sector and reduced government spending on infrastructure projects, has had a negative impact on the first half results.

Further afield, he said there's been growth in the Formica business in North America.

But increased competition in China offset the strength of other markets in Asia, while Europe continues to be challenging.

Despite the mixed results, the company hasn't revised its guidance for a full year underlying profit of between $650 and $690 million.

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