Fletcher Building has reported a near flat first-half net profit, reflecting losses associated with site closures in its Rocla Products and insulation business.
New Zealand's largest construction company's net profit rose 2 percent to $176 million in the six months ended December, over the year earlier, which included losses of $11m.
Revenue rose 4 percent to $4.6 billion, reflecting sales growth in New Zealand and contributions from the recently acquired Higgins contracting business.
However, the brokerage firm Forsyth Barr said in an analyst note that when the contribution from Higgins was excluded, the construction business's underlying earnings were $5m, compared with $36m the year earlier.
"Construction is inherently opaque and can be impacted by project timing, but we suspect "losses incurred on a major construction project" have had a material impact on earnings," it said.
But Fletcher Building chief executive Mark Adamson said the distribution and international businesses reported increases in operating earnings in excess of 30 percent, driving up the group's underlying earnings by 12 percent to $310m.
"The strength of the macroeconomic environment in New Zealand has helped the performance of the distribution businesses but it has also managed the mixed economic conditions in Australia to report operating earnings of $84m versus $64m last year," he said.
The company said it was on track to meet the full year underlying profit forecast of between $720m and $760m.
It will pay an interim dividend of 20c.