Fletcher Building has reported a 27% fall in half-year profit as it faces more exposure to the economic crisis and property markets slow down around the world.
The construction and building products company said on Thursday its profit had fallen to $172 million in the six months to the end of December, compared with $235 million in the same period the previous year.
The company has again warned its full-year profit is likely to fall by 40% because of the economic downturn.
It says it is gradually scaling back costs and production to meet weaker demand for its building products.
Fletcher Building says demand has fallen away, particularly in New Zealand, the United States, Spain and the United Kingdom, at the same time as higher production costs have restricted earnings.
As a result, Fletcher Building's operating earnings fell 23% to $303 million.
However, the company's steel division helped prop up the group's sales, which rose 6% in the half year.
Fletcher Building says there is strong demand for its steel products which are attracting higher prices.
The company also says it has a solid construction backlog in New Zealand worth nearly $1.2 billion as infrastructure projects ramp up.
Shareholders will be paid an unchanged dividend of 24 cents per share.