Fletcher Building back in profit

Fletcher Building, New Zealand's largest listed building products company, has returned to profitability after experiencing a significant loss last year, driven by one-off costs and write-downs. In the 12 months ending June, the company reported a net profit of $228 million, a turnaround of $647 million from the previous year's $419 million loss.

Underlying earnings, or EBIT, rose to $414 million, an increase of $85 million compared to last year. Additionally, net debt decreased substantially to $637 million from $999 million, showcasing improved financial health.

The company's strategic reset, initiated last year, has begun to bear fruit. This reset included the sale of its construction division and a focus on building products, manufacturing, and distribution. Fletcher Building's managing director and chief executive, Andrew Reding, expressed that the company has become significantly more resilient than it was 12 months ago.

Reding highlighted that Fletcher Building's core manufacturing divisions performed well despite challenging market conditions. While acknowledging that there is still work to do to achieve targeted returns on capital, Reding noted that the group is now better positioned to benefit as market conditions improve.

In a significant move earlier this year, Fletcher Building's Northland cement plant, Golden Bay Cement, was granted $60 million by the government to continue operations amid global competition, which does not face the same emissions charges.