Australia’s Lendlease reports A$1.5 billion loss amid strategy shift, regulatory delays
AUSTRALIA’S Lendlease Monday (Aug 19) reported a wider annual loss as the real estate developer grappled with the impact of an operational strategy shift and delays in reviewing the sale of community projects.
Lendlease, the country’s largest property developer, builder and real estate investor, is looking to retreat from its overseas construction business, freeing up to A$4.5 billion (S$3.9 billion) in capital in the process.
The firm had in May warned that its annual core earnings would take a hit due to the Australian competition regulator delaying its review on a sale of community projects to peer Stockland by over two months in an A$1.3 billion deal.
The country’s largest property developer reported a full-year loss after tax attributable of A$1.5 billion as compared to a loss of A$232 million a year ago.
“Our results for FY24 reflected challenging business conditions and the early actions from our refreshed strategy,” chief executive Tony Lombardo said, adding that the company has realised further cost savings as a result of a simplified management structure.
Lendlease till the end of the year has sold A$1.9 billion in assets as part of its targeted A$2.8 billion by June 2025.
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As part of the overhaul, Lendlease has already divested its US construction business including winding down the West Coast and Central operations and has agreed over the sale of East Coast operations.
The firm had faced intensifying shareholder pressure to overhaul its operations from major investors such as businessman and Australian Sports Commission chair John Wylie’s Tanarra Capital and David Di Pilla’s HMC Capital.
“The underlying operational business is still challenged,” analysts at UBS flagged while brokerage Citi expected the market to raise questions on Lendlease’s development pipeline, strategy and cost measures.
The firm declared a final dividend of 9.5 Australian cents apiece. Shares fell as much as 2.7 per cent during the day. REUTERS
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