Fletcher Building chief executive Jonathan Ling expects the recovery in the Australian building market to lag that of New Zealand, even as the Christchurch rebuild gets pushed back.
The country's largest listed company, made $144 million in the six months to December, compared with $166 million in the same period the previous year.
The result was also $6 million lower than forecasts issued in November, when the company surprised the market with a warning a construction slowdown had eaten into earnings.
Mr Ling says the company has been hurt by weak construction activity in New Zealand, with approvals for new homes in 2011 at the lowest level in 46 years.
And he says the next six months looks very tough too, but beyond that there's hope it will improve.
He says New Zealand residential consents are starting to come up.
Mr Ling says the construction backlog of $1.2 billion is very healthy, it's just that most of it, such as the Waterview project, doesn't get underway until the first half of the 2013 financial year.
He says the outlook from 2013 and beyond is still pretty good.
Fletcher Building on Wednesday pared back its full-year profit guidance, from about $359 million to between $310 and $340 million.
But Mr Ling says he expects the New Zealand market to pick up sooner than Australia.
He says New Zealand felt lower than Australia because of the recession in 2009 and fewer subsidy programmes, but it now seems to be starting to turn.
Mr Ling says government programmes and the resources sector meant that Australia stayed more buoyant, but he says the government programmes are now coming to an end and there is low consumer confidence.