Fletcher Building tumbles on fresh earnings hit
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More news: Shares in Fletcher Building dropped 5% to $2.86 after the troubled building products supplier said its FY25 earnings would be lower by up to NZ$30 million ($27 million) because a third-party ship used by its Golden Bay cement business for distribution in New Zealand's North Island has developed a mechanical issue.
Fletcher shares have already lost a third of their value so far this year after it cut its FY24 earnings guidance in a slowing market several top managers departed in recent months.
Fletcher Building flags earnings hit on cement supply disruption
The news: Embattled building products supplier Fletcher Building has flagged an earnings hit due to disruptions in transporting cement from its Portland plant in New Zealand.
The numbers: Fletcher said it expects FY25 earnings to be impacted between NZD10 million ($9 million) and NZD30 million ($27 million) because a third-party ship used by its Golden Bay cement business for distribution in the North Island has developed a mechanical issue.
The context: Fletcher said the vessel is currently docked at Northport while inspections and repairs are made by the owner with no known timeframe on the necessary repairs and sourcing of replacement parts.
It said the Golden Bay business is engaging with customers and has enacted contingency plans, including the immediate use of alternative transport options. The likely earnings hit will be driven by the anticipated increased costs of supply from the range of mitigating actions.
The announcement comes just months after Fletcher cut its FY24 earnings guidance in a slowing market, prompting a downgrade of its credit rating by Moody’s as well lower earnings estimates by analysts.
The NZX- and ASX-listed company has seen several top management departures in recent months, as it faces shareholder discontent over weak share price performance and a half-year loss. Fletcher has also racked up further provisions against troubled construction projects in Auckland and Wellington.
The source: ASX
