Shares in Fletcher Building fell hard after New Zealand’s largest construction company issued a warning that full year profit could be as much as $NZ150 million ($AU136 million) less than expected.
A short time ago, they were down almost 10% to $7.53.
The company now expects operating EBIT (earnings before interest, tax and significant items) to be between $NZ610 million ($AU555 million) and $NZ650 million ($AU592 million) for the full year, down from previous guidance of $NZ720 million ($AU656 million) to $NZ760 million ($AU692 million).
The fall is due to weaker than expected returns from the buildings and interiors business unit of the construction division.
The company gave its original guidance last month but since then management identified an increase in the estimated loss on a major construction project. Fletcher Building didn’t name the project.
Trading for Fletcher Building’s other divisions remains in line with expectations.