NZ's Fletcher Building warns on first-half earnings, swings to annual profit (updated)
UPDATE 2-NZ's Fletcher Building warns on first-half earnings, swings to annual profit Recasts, adds details on results and background
Aug 19 (Reuters) - New Zealand's Fletcher Building FBU.NZ on Wednesday warned that a volatile environment would weigh on first-half fiscal 2027 earnings, even as it returned to an annual profit, helped by the sale of its Construction division and non-core assets.
Shares of the Auckland-based construction materials maker rose as much as 6.4% to NZ$3.98 by 0107 GMT, their highest level in more than two years.
Ongoing economic, political and geopolitical uncertainty would likely weigh on first-half fiscal 2027 performance, the builder said, adding that a meaningful recovery in underlying volumes is not expected until calendar 2027.
In January, Fletcher agreed to sell its flagship construction division to a unit of France's VINCI SGEF.PA for NZ$315.6 million, as weak construction activity and tough economic conditions weighed on New Zealand and Australia.
Asset sales, including the divestment of non-core operating units, helped the firm post an annual group net profit of NZ$228 million ($133.86 million), a turnaround from a loss of NZ$419 million in the prior year.
Gross revenue from the company's materials and distribution segment rose nearly 10% to NZ$5.92 billion for the year ended June 30.
"Our core manufacturing divisions performed well in a difficult trading environment, and a sustained focus on operational and capital discipline saw us materially improve net cash from operating activities for the year," Managing Director and CEO Andrew Reding said.
While Fletcher did not declare a dividend for the third year in a row, the company expects to reset its dividend policy once it starts generating positive free cash flow and is in the lower half of the net debt target range.
($1 = 1.7033 New Zealand dollars)
(Reporting by Aamir Shaik Khalid in Bengaluru; Editing by Diti Pujara and Sherry Jacob-Phillips)
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NZ's Fletcher Building warns on first-half earnings, swings to annual profit (updated)