Building products and construction firm Fletcher Building says it has yet to see a significant recovery in demand.
At its annual meeting in Dunedin on Wednesday, the company told about 200 shareholders it expects to make a profit at the lower end of analysts' range of between $261 million and $340 million.
Fletcher Building chief executive Jonathan Ling says volumes have stabilised, and it expects any recovery to be gradual rather than quick.
Mr Ling says the company is cautious about the outlook, because trading volumes are still at very low levels.
Overall, there has been no significant pickup in business, he says, except for a few exceptions, such as the insulation business in New Zealand and Australia, and certain markets for metal roof tiles.
Mr Ling says the company is more concerned about the slowdown in the commercial building sector than the downturn in new residential housing.
The expected strong earnings from government insulation and infrastructure building programmes on both sides of the Tasman will offset weaker performances from its Laminex and steel units, and subdued activity in both Europe and the US as those regions struggle in the wake of the global financial crisis, he says.
The company says it is unlikely to see any sign of a significant recovery in trading until 2011.
Fletcher Building expects to pay investors a full year dividend of 28 cents a share.
The company's shares were down 9 cents to $7.95 at the close of trading on Wednesday.
