Global construction and infrastructure giant Lend Lease has halved its interim distribution to 15 cents a security after reporting a 37% slide in statutory earnings for the six months to December.
The company told the ASX on Monday that it earned $196 million for the half (down from $313 million) and blamed the global pandemic which it said had impacted operations across office, retail and residential sectors (a very familiar story for many companies, large and small).
The company’s investment arm was the heaviest impacted during the period, with the segment down 46% compared to last year. This was due to a sharp slide in fees from asset management.
Group CEO, Steve McCann, who retires from the group at the end of May, said Lendlease has responded well to a challenging operating environment with profit recovering from the worst of the COVID-19 impacts, although activity is still below pre-pandemic levels.
“The Group has displayed resilience through a very testing period with a recovery in operating conditions gathering momentum towards pre COVID-19 levels,” he said in Monday’s earnings statement.
“Core operating EBITDA was $405 million, a significant improvement from the second half of the 2019-20 financial year though lower than the $525 million in the overall half”, Mr McCann said.
He said the challenging operating conditions continued to affect each segment. The weaker market environment provided an opportunity to secure new urbanisation projects alongside investment partners on attractive terms.
Lend Lease says it will now focus on the $14 billion pipeline of projects overseas, such as the vast Google site in San Francisco and the build-to-rent sector in Australia.
The company did not issue earnings guidance.
LLC shares eased 1.3% to $11.73.