Fletcher Building Expects More Losses From Construction Division
By Ben Collins
WELLINGTON--New Zealand construction company Fletcher Building Ltd. (FBU.NZ) entered a trading halt Thursday after telling the market it expected more losses from its buildings and interiors division.
The "material losses" could put Fletcher Building in breach of covenants in one or more of its financing arrangements with banks, the company said.
Last year, the company took a $125 million New Zealand dollar (US$90 million) provision against losses in two major projects--a convention centre in the commercial capital, Auckland and the Justice Precinct in Christchurch--and said the buildings and interiors division would lose NZ$160 million in its current fiscal year.
"Although the project reviews are not yet complete, the current expectation of the board is that there will be further material losses in the B+I business beyond what was provided for in October 2017," the company said in a regulatory filing.
In 2017, the division reported a NZ$292 million loss after issues including "inadequate project management" and capacity pressures in New Zealand, where there are skills shortages in some industries.
Fletcher said it would remain in a trading halt until Monday, and by then it will have made the review of the key projects public.
Shares in the company last traded at NZ$7.77.
Write to Ben Collins at firstname.lastname@example.org
(END) Dow Jones Newswires
February 07, 2018 16:03 ET (21:03 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.