Shares in Lendlease fell hard after announcing a provision of about $350 million after tax in its underperforming Engineering and Services business.
At the close, the shares were down more than 18% to $14.25.
The construction, property and infrastructure company says the problems includes lower productivity post tunnelling at NorthConnex, and excessive wet weather, access issues and remedial work from defective design on other projects.
The company says it is negotiating with third parties in an attempt to mitigate anticipated losses.
“Today’s announcement about the Engineering and Services Business is extremely disappointing particularly given the underlying performance across Lendlease’s other businesses,” says CEO Steve McCann.
“Our international pipeline of landmark urbanisation projects, especially those in Europe, has materially grown in the last 12 months giving us earnings visibility well into the future.”
The company in August announced a full year profit of $792.8 million, up 4.5%.
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