New Zealand's Fletcher Building flags fuel-linked impacts from Iran war (updated)

Fletcher Building

15/04/2026 22:42

Flags fuel-linked price increases across divisions

Partially mitigates impacts on fuel costs via hedging, other measures

Fletcher cannot currently gauge full financial impact of conflict

Adds forecast details, shares in paragraphs 3, 10-13

April 16 (Reuters) - New Zealand's Fletcher Building FBU.NZ said on Thursday that fuel costs, particularly diesel, remain a major concern as the conflict in the Middle East has jolted energy markets, resulting in fuel-linked price increases across its divisions.

The Auckland-based construction materials maker said it is partially mitigating volatility in fuel prices - a material cost driver - through bulk purchasing, hedging and pass-through pricing mechanisms.

A 10 New Zealand cent increase in diesel prices will result in an incremental cost of about NZ$3.4 million per annum at a group level when diesel prices are unhedged, the company said.

Oil prices have climbed over $100 a barrel and have been volatile as the Middle East conflict has raised supply concerns, disrupted shipping routes and elevated prices of fuel, freight and raw materials.

The group consumes nearly 36 million litres of fuel annually, with diesel accounting for 94% of total usage, it said.

Its heavy building materials division represents over half of total consumption, and the construction division accounts for nearly a third.

"Price increases across divisions range from modest to more significant in plastics and include fuel-linked surcharges, reflecting input cost pressures."

Fletcher, which has no direct operations in Iran, said the most immediate exposure is in plastics with the Australia and New Zealand operation of its unit Iplex being most impacted.

Urea used in its Laminex businesses in Australia and New Zealand and Fletcher Insulation products are also exposed, the company added.

Fletcher said it cannot currently ascertain the overall impact of the Middle East conflict on the group's financials.

Shares of the company fell as much as 1% to NZ$2.95 in early trade.

Meanwhile, direct impact on its workforce has been limited for now, with "anecdotal feedback" pointing to increased commuting costs and requests for more work-from-home flexibility, it said.

Impact on workforce may increase if conditions escalate, it added.

The company also said its March quarter volumes continued to show early signs of improvement across the portfolio, with results data largely predating the Middle East conflict.

 (Reporting by Sherin Sunny in Bengaluru; Editing by Maju Samuel)

 ((Sherin.Sunny@thomsonreuters.com;))