Bosses at Fletcher Building have revealed tough trading conditions and disclosed staff redundancies.
But shareholders at yesterday's annual meeting in Auckland still backed a $500,000 director fee increase, raising few objections to the pay rise.
Shareholders in New Zealand's second-largest company behind Telecom heard how it was on target to make $359 million net earnings this year - but with many qualifications.
Chairman Ralph Waters and chief executive Jonathan Ling issued grim summaries of a combination of bad events which hurt Fletcher including low new-housing starts, floods in Thailand, Christchurch earthquakes, the ruptured gas pipeline in Taranaki which hurt production, a flat commercial building sector and European turmoil undermining business and consumer confidence internationally.
Ling referred to a disappointing start to the June year and said staff numbers had fallen at Fletcher businesses. About 220 jobs had gone at PlaceMakers, many through natural attrition and the reduced use of casual labour.
"Right throughout the group we're trimming," Ling said, also singling out Laminex and Stramit in Australia where jobs had been lost and telling how the 5.5 magnitude Christchurch earthquake on October 9 had further delayed building work there.
The Rugby World Cup hurt Fletcher because people stopped buying its goods and services.
Fletcher employs more than 20,000 people in a number of countries.
The second half-year profit for 2012 would be 10 per cent lower than the $166 million net earnings for the previous corresponding period, Waters said, based on the assessment of market conditions and unaudited internal forecasts.
Waters called for a resolution of Christchurch's insurance impasse and warned that the $359 million full-year result was based on several assumptions including a pickup in new-house starts here, Crane's second-half year being boosted by two big gas coal seam pipeline contracts, a seasonal upswing at Formica and restructuring at Laminex where volumes are down.
"I would stress that our forecast for the full year is dependent upon these assumptions and no further deterioration in our key markets. Should construction volumes fall further, then this guidance may require to be further revised," Waters warned.
Yet shareholders agreed to a directorship fee rise from $1.5 million to $2 million. Philip King, investor relations manager, said much less than the top figure would be drawn.
"They won't get anywhere near the $2 million. That's the upper band which will cover them for several years. The last one lasted five years. The $2 million is the total pool available to them," King said.
The AGM at SkyCity drew hundreds of shareholders who lauded the board and told directors they were the best in their field.
Before the meeting, the company had 371 million votes supporting that fee rise, 13 million against and 29 million abstaining. Waters told how he had taken a $60,000 pay cut, voluntarily reducing his chairman's fee from three times his base fee to 2.5 times.
One shareholder mentioned how April's $9.52 share price had dropped 25c to $6.15 yesterday. Des Hunt of the Shareholders Association asked Waters when the price might pick up. Waters said any rise depended on a recovery.
$1.3m was paid to Fletcher directors in June, 2011 year including:
Ralph Waters $332,000
Hugh Fletcher $171,500
Gene Tilbrook $171,500
John Judge $171,000
Alan Jackson $160,750
Tony Carter $129,500
Jonathan Ling's pay rose from $2,713,494 in the June 2010 year to $2,821,317 in the June 2011 year.
Source: Fletcher Building annual report 2011. Sir Dryden Spring and Kerrin Vautier retired. Their fees were included in the $1.3 million.