Lendlease set for up to $340m FY loss

Construction and property group Lendlease expects to declare a full-year statutory loss of $230 million to $340 million, compared to a $467 million profit last year.

Lendlease said exiting its engineering business will cost it around $550 million, the high end of previous estimates, while COVID-19 has reduced the value of its $4 billion investment portfolio by around $130 million to $160 million.

The company said its full-year core profit after tax, not including the engineering impacts, would be $50 million to $150 million.

It said that Lendlease Corporation wouldn’t declare a final dividend this year, although the trust that owns its property portfolio should pay a small distribution.

“COVID-19 has had a material effect on the Group for FY20,” the company said. 

“Our priorities have been to keep our people safe and protect our balance sheet.”

Lendlease said that COVID-19 has delayed a number of its urbanisation projects including the Melbourne Quarter, Barangaroo and International Quarter London, as well as a number of construction projects overseas.

The company said it had agreed to sell a 25 per cent stake of One Sydney Harbour, its under-construction 72-storey residential tower in Barangaroo, to Mitsubishi Estate.

Lendlease didn’t disclose the purchase price but said the sale would contribute to about $100 million profit after tax in FY21.

Lendlease said the sale of its engineering business to Spanish conglomerate Acciona for $180 million should complete early in fiscal 2021.

At 1100 AEST, Lendlease shares were down 2.6 per cent to $12.05.

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