Lend Lease remains confident in its property development prospects despite a 16 per cent slide in its first half profit.
Property and construction giant Lend Lease is upbeat about its outlook, despite a 16 per cent slide in its half year profit.
Weakness in the company’s Australian and European construction businesses dragged the company’s net profit down to $252 million in the six months to December 31, from $301 million in the same period a year earlier.
But chief executive Steve McCann says the company’s increasing focus on its property development arm will help boost profitability.
“We see that as a more profitable focus for our business,” he said.
“We remain very confident of our outlook.”
Lend Lease shares were down 39 cents, or 3.4 per cent, at $11.18 at 1500 AEDT.
Profit from the company’s Australian construction business fell 45 per cent to $52 million during the half, due to $25 million in restructuring costs and bid costs associated with pursuing major projects.
The company’s Australian development business also suffered a more than 30 per cent profit fall to $113 million, but the company remains upbeat about the outlook for its current pipeline of projects, including the Barangaroo South development on Sydney Harbour.
Elsewhere, profit from Lend Lease’s European division was down 86 per cent to $8.2 million amid reduced margins across the UK and Italy, and the sale of its Spanish construction business.
But profit from the company’s Asian division almost tripled to $69 million and profit from its Americas business lifted 85 per cent to $48 million.
Meanwhile, Mr McCann said the company had decided not to go ahead with its bid for the planned multi-billion dollar expansion of the Abbot Point coal terminal in central Queensland.
“It lapsed for a whole series of reasons, (including) commercial drivers – there were a number of different competing projects and potential expansions up there,” he said.