Fletcher Building has downgraded its earnings forecast for the first half of 2019 by 10 per cent but says it still plans to recommence dividend payments this financial year.

The country's largest company, which is holding its annual meeting in Auckland today, said in a statement the lower forecast is due to challenging Australian trading conditions and the timing of house sales in its residential division.

Fletcher is now forecasting 2019 half-year earnings before interest, tax and significant items to be in the range of $630 million to $680m. There is no change to the Building + Interiors provisions announced in February 2018.

While the company is still targeting the top end of this range, it is also highlighting an outage at its Golden Bay cement plant as an impact on first-half earnings.

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Fletcher said return to dividend payments would be subject to satisfactory trading
conditions and group cashflows.

"The dividend policy of paying dividends in the range of 50-75 per cent of net earnings before significant items, with consideration of available cash flow in the same period remains unchanged."

Fletcher cancelled its dividend payout in August when it posted a full-year loss of $190m compared to a $94m profit the previous year.

In February, former chairman Ralph Norris announced the company had recorded losses of nearly $1b from its disastrous Buildings + Interiors division, telling of a combination of factors resulting in $292m losses for the June 30, 2017 year and $660m for the June 30, 2018 year.

The company said trading in New Zealand is in line with the market, which is flat to slightly down on the year ended June with the volume of house sales being lower and taking longer to settle than expected.

In Australia, the company is implementing its turn-around strategy but faces challenging trading conditions for most of its businesses there as the residential sector cools.

The businesses exposed to infrastructure are doing better although input cost increases continue to put pressure on margins.

The Formica business, which was earmarked for sale within 18 months back in April, is trading to plan and performing strongly, particularly in Asia, Fletcher said, adding that the weaker New Zealand dollar is helping the translation of earnings.

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Fletcher's guidance may disappoint investors relative to market expectations, said Harbour Asset Management director Shane Solly.

"Management is still working through business repositioning while now observing challenging Aussie trading conditions and softer NZ activity."

Fletcher shares closed yesterday at $5.50, giving the company a market capitalisation of $4.74 billion.