Fletcher will miss full-year guidance after quake

Fletcher will miss full-year guidance after quake, sees pickup as repairs get underway

By Jason Krupp

March 4 (BusinessDesk) - Fletcher Building Ltd., New Zealand's biggest construction company, will miss its guidance for full-year profit as a result of the Christchurch earthquake, which will disrupt existing repair work as the city assesses the damage.

The quake will strip $14 million to $24 million off earnings in the year ending June 30, which Fletcher last month forecast at about $354 million. Its revised forecast means profit will be $330 million to $340 million, or as much as a 25% gain from a year earlier.

The Auckland-based company said in a statement today that its estimates include a $5 million support allowance that the company expects to provide to assist with the recovery programme in the city. Initial cost estimates from the latest 6.3 magnitude earthquake which has claimed 163 lives so far have ranged as high as $15 billion, three times that of the Sept. 4 earthquake.

The shares rose 1.4% to $8.83, the highest since April 2008 and adding to yesterday’s 2% gain amid speculation the construction firm stands to gain once repair work begins in earnest. Fletcher had previously been appointed to oversee repairs to more than 50,000 buildings damaged in the first quake.

The company said it has not quantified what impact the rebuild will have on its financial results in future years.

(BusinessDesk)

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