Finally, some good news from Fletcher Building – the ASX and NZX-listed company has turned a previous half-year earnings loss into a $45 million profit.
After reporting a loss of $88m in H125, managing director and CEO Andrew Reding announced the profit for H126. That is the period to December 31, 2025.
The company’s net loss after tax fell from $134m to $11m in the two periods.
Revenue, previously $2.85 billion, rose to $2.86b.
Fletcher reported better volumes from its lucrative Winstone Wallboards and Laminex businesses in Australia.
Funding costs fell due to lower interest rates and lower debt.
Earnings before interest and tax (ebit) from continuing operations before significant items was $145m, with margin pressure in parts of the portfolio partially offset by structural cost reductions and operational improvement.
The group had continued to make progress in difficult trading conditions, Reding said.
“The first half of FY26 was another demanding period for the building industry, with subdued markets across New Zealand and Australia.
“Conditions differed between a particularly weak first quarter and a more stable second quarter. In that environment, our core manufacturing businesses held up well, supported by disciplined cost control and better operational execution.”
On Friday, Forsyth Barr forecast the latest half-year result.
Ebit, excluding construction, would decline 5% on the prior year to $139m, analysts there said.
That would reflect continued volume and margin pressure in the materials and distribution divisions, as well as low new home sales, they wrote on February 13.
“Just as importantly, we continued to make real progress on our strategy around simplifying the group, strengthening the balance sheet, and embedding a decentralised operating model that improves accountability and performance,” Reding said.
The company’s market cap is around $3.7b. It employs more than 12,000 people here, in Australia and the South Pacific.
Last week, the Fletcher-built New Zealand International Convention Centre was opened after a tough 11 years.
“We at Fletcher are extraordinarily proud of the quality of the building. Please, SkyCity, look after it,” Reding said after Prime Minister Christoper Luxon had cut the ribbon.
Last month, Fletcher said it planned to sell its construction division to Vinci for $315m.
Fletcher Construction Holdings and three New Zealand units are being sold. Those are Higgins, Brian Perry Civil and Fletcher Construction Major Projects.
South Pacific operations are excluded and remain under separate review.
Residential builder Fletcher Living is not included in the sale because it is a separate division from construction.
Last month, Reding said the sale reflected the company’s ambition to refocus on its core manufacturing and distribution operations.
“Over the past year we have been clear that Fletcher Building’s future lies in being a focused building products manufacturer and distributor,” he said in January.
Sentiment suggested New Zealand was on the cusp of a cyclical recovery but that was yet to translate into stronger construction activity or Fletcher’s operating performance, the company said.
Fletcher had repeatedly stated it did not expect a meaningful recovery here until 2027.
“Residential consents suggest a pick-up from mid-2026, but non-residential and infrastructure indicators remain weak,” wrote Forsyth Barr’s Rohan Koreman-Smit, Paul Laxton Koraua and Sam Averill.
“While we do not expect any change in management’s view, we look for early signs of an impending pick-up in activity – estimations, quoting, and forward orders.”
They also expect another division, Fletcher Living, to be sold.
That is the house, townhouse, apartment and retirement-building division headed by Steve Evans.
Having sold its construction division, the analysts said they would look for detail on the timing and progress of the residential sale.
Last August, Fletcher announced a June 30, 2025, result of a $419m loss, worse than 2024’s FY loss of $227m.
Reding said 2025 was one of the most demanding years in recent memory for Fletcher and the industries where it operates.
Today, his outlook is for market conditions to remain challenging in the near term.
“In New Zealand, residential and civil demand is likely to remain relatively subdued through FY26, with a more meaningful recovery not anticipated until calendar year 2027. In Australia, early signs of stabilisation are emerging in parts of the portfolio, although conditions remain uneven,” Reding said.
No interim dividend will be paid.
Anne Gibson has been the Herald’s property editor for 26 years, written books and covered property extensively here and overseas.