NZ's Fletcher raises annual operating earnings outlook, shares hit 4-month high (updated)

Fletcher Building

08/07/2026 22:11

Recasts paragraph 1, updates with shares and context throughout
FY26 EBIT forecast raised by nearly 6.5%
Input cost uncertainties could weigh on recovery 
Shares reach highest level since March

    July 9 (Reuters) - New Zealand's Fletcher Building FBU.NZ on Thursday raised its operating earnings outlook for fiscal 2026, betting on resilient performance in its key manufacturing and distribution divisions, sending its shares to their highest level in four months.
The construction materials maker's shares rose 2.3% to NZ$3.5 in early trading, while the broader NZX 50 index .NZ50 was little changed.
Fletcher has been grappling with tepid demand in its materials and distribution division, which sells construction and plumbing as well as cement and concrete products, significantly impacting its earnings last year.

     More recently, 
    volatility in fuel prices
     brought on by the conflict in the Middle East has been a material cost driver. 
  
An improvement in volumes across its core manufacturing and distribution divisions supported the outlook upgrade, the company said. It expects surplus property sales to deliver around NZ$52 million in earnings during the fiscal year, excluding significant items of about NZ$9 million.

    However, the company warned that input cost uncertainty, if sustained, could adversely impact recovery in the first half of fiscal 2027, even as existing construction activity continues to support demand.
"Macro uncertainty and broader cost inflation are leading to delays in, and in some instances cancellations of, new projects, particularly in the commercial sector," Fletcher said.
The Reserve Bank of New Zealand lifted its key cash rate for the first time in over three years on Wednesday, underscoring concerns that inflation pressures will remain elevated, and signaled further tightening as economic momentum rebuilds.
Fletcher said it now expects earnings before interest and taxes (EBIT) of NZ$400 million to NZ$403 million ($228.04 million to $229.75 million) for the financial year 2026, compared with its earlier forecast of NZ$375 million to NZ$380 million.
     
($1 = 1.7541 New Zealand dollars)

(Reporting by Nikita Maria Jino in Bengaluru; Editing by Jonathan Ananda)
((Nikita.Jino@thomsonreuters.com;))