- Statutory profit was down 37% to $196 million
- A weaker market environment was seen as the main cause
- New major projects in the US, Europe and Australia are in the pipeline
A “weaker market environment” has been cited as the main reason for ASX-listed Lendlease’s slide in earnings (ASX: LLC).
Its half-yearly results, announced to the market on Monday, showed that the multinational construction, property and infrastructure company’s core operating profit after tax had dropped 26% to $205 million.
COVID-19 “continued to impact the performance” of the Group, said their statement.
Statutory profit was down 37% to $196 million.
“To align more closely to the strategic priorities of the Group, refinements were made to the financial strategy and Portfolio Management Framework during the period,” said Acting Group Chief Financial Officer, Frank Krile.
“We remain focused on providing the financial capacity to deliver our $110 billion development pipeline, while continuing to pursue attractive investment opportunities.”
Group Chief Executive Officer and Managing Director, Steve McCann, said the company believed it had come “through the worst” of the pandemic’s challenging environment, and profit was already recovering.
“The Group has displayed resilience through a very testing period with a recovery in operating conditions gathering momentum towards pre-COVID-19 levels.
“Core operating EBITDA was $405 million, a significant improvement from the second half of FY20, although lower than the $525 million in HY20,” Mr McCann said.
The weaker market environment also provided an opportunity to secure new urbanisation projects alongside investment partners on attractive terms, the company said in a statement.
In New York, a city block will be transformed into apartments for rent with an estimated end value of $1 billion. The group has also secured an urbanisation project in Los Angeles, with an $800 million end valuation.
The group is also making investments into the ever-expanding retirement sector.
“Our core business is at a pivotal point, with a development pipeline of $110 billion and a growing number of major urbanisation projects in our international gateway cities, across US and European cities in particular,” Mr McCann said.
Lendlease shares are $12.75 at the time of publication, signifying a market capitalisation of $8.1 billion. A year ago, pre-pandemic, shares were trading at more than $19 per share.
As reported earlier, Mr McCann will step down as CEO in May this year and will be replaced by Tony Lombardo.