(Reuters) - Australian construction firm LendLease Group reported on Monday a 96.3 percent drop in first-half profit, hurt by the underperformance of its local engineering and services businesses.
Net profit after tax for the six months ended Dec. 31 came in at A$15.7 million, down from A$425.6 million in the previous year, the company said in a statement.
The company, which has operations spanning from Australia to the United States, approved an interim dividend of 12 cents per share, down from 34 cents per share last year.
Revenue fell 10.7 percent during the period to A$7.76 billion.
The Engineering and Services business will be reported as
non-core in the FY19 results and beyond following a strategic review, LendLease said in a statement.
LendLease in November flagged a charge of A$350 million to its interim results, citing lower productivity in its local engineering and services businesses, and had initiated a review of the two businesses.
The company expects its earnings from Development segment to be skewed to the second half of the financial year.
The construction group faces headwinds from a drop in building approvals owing to a steep decline in the domestic real estate market. Fears of an oversupply brought infrastructure projects in Australia to a five-year low in December, prompting profit downgrades from a number of LendLease’s rivals.
Australia’s largest buildings material supplier, Boral Ltd, said earlier this month it no longer expected earnings growth in Australia for 2019, owing to major setbacks at big projects, while cement maker James Hardie Industries Plc reported a 10 percent drop in half-yearly operating profit.
(Reporting by Shanima A and Anushka Trivedi in Bengaluru; Editing by Daniel Wallis and Peter Cooney)
