UPDATE 1-NZ's Fletcher Building sees higher yr earnings

Yahoo! Australia & NZ Finance

Tuesday 9 November 2:01 PM

UPDATE 1-NZ's Fletcher Building sees higher yr earnings

(Recasts, adds detail, estimates)

WELLINGTON, Nov 9 (Reuters) - New Zealand's Fletcher Building Ltd. FBU.NZ on Tuesday forecast core annual earnings would rise up to nine percent, despite an expected slowdown in the housing sector in the second half of the year.

Fletcher Building, which has benefited from building booms in New Zealand and Australia on the back of strong economic growth and historically low interest rates, said in August that it expected to match last year's record profit result in 2005.

Chairman Roderick Deane said in speech notes for the top-10 company's annual meeting that trading in the first four months of the fiscal year to June 2005 was comfortably ahead of last year.

"Even after assuming there will be a second half slowing, directors now expect the full year earnings before interest and taxation to be in the range of NZ$475 million ($328 million) to NZ$500 million compared to NZ$460 million last year," he said.

Analysts had forecast EBIT of NZ$471.9 million for the year, according to Reuters Estimates.

Shares in Fletcher Building, which has a market capitalisation of NZ$2.5 billion, rose 2.1 percent to NZ$5.78 compared with a record high of NZ$5.99 touched on Sept. 30.

The shares have gained 36 percent so far this year, outpacing an 18-percent gain by the benchmark NZSX-50 share index .NZ50 and 31-percent gain by Australian rival Boral Ltd. BLD.AX.

Fletcher Building is a building materials maker and distributor with operations in concrete, steel, plasterboard, panel products, aluminium extrusion, and residential and commercial construction.

Further slowing in immigration in New Zealand, and in property sales and prices in both New Zealand and Australia, supported the view that the residential construction market would slow during 2005, Deane said.

"While the slowing has not yet been evident in trading, we expect it will be by the second half of this financial year."

The number of building consents authorised in New Zealand fell slightly in September to a seasonally adjusted 2,115, the third consecutive monthly decline, according to official data.

However, Fletcher Building's reliance on the residential sector was much reduced and it continued to expect strong non-residential and infrastructure demand, Deane added.

($1=NZ$1.45)

Earlier Story:

NZ's Fletcher Building sees higher year EBIT (Reuters)