One Sydney Harbour
Artist’s impression of One Sydney Harbour – on Gadigal Country. Photo – Lendlease.
  • 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.




You May Also Like

Growing market: childcare facilities investment developing

Recent changes to Child Care Package subsidies, as well as govt support of childcare as an essential service, will be another growth driver.

West Perth’s CBD leading the move towards growing employment nodes

Markets which were not hampered with the same level of lockdown, such as Brisbane and Perth CBDs, have improved their occupancy.

WA Government to boost development with $80M fund and DAP delay cap

Premier McGowan announced 120-day state govt DAP caps and opt-ins for local govt, $80M in infrastructure funding, and green light for smaller multi-dwelling developments of $2M.

Experts Corner by The Property Tribune

Ko & NPA partner to launch several co-owned luxury properties at Mermaid Beach, Gold Coast

Ko's partnership with NPA Projects provides more opportunities to co-own off-the-plan holiday residences, including exclusive Gold Coast properties

Continue reading

Top Articles

Expert tips on how to be a successful property investor

Property expert and buyer's agent, Lloyd Edge, shares his insights.

Australian commercial property update: Industrial and tourism assets lead the pack in trying times

Commercial assets have faced volatility recently, driven by financing changes and demand fluctuations from institutions and funds.

WA has emerged as a property investment hub, and why that's a good thing

Eastern investors chase Perth's affordability, doubling the distance between home and investment in 2023, reveals MCG research.