Fletcher Building made an after-tax loss of $11 million for the first half of the 2026 financial year; no update given on the pending sale of the company's residential business

Building industry giant Fletcher Building [FBU] is reporting another after-tax loss - this one of $11 million - for the first half of the 2026 financial year.

The latest result compares with a loss of $134 million in the first half of 2025 and a $419 million full-year loss last year.

Fletcher Building managing director and CEO Andrew Reding said the first half of the 2026 financial year "was another demanding period for the building industry, with subdued markets across New Zealand and Australia".

He said the first quarter of the year was "particularly weak", while the second quarter was "more stable".

"In that environment, our core manufacturing businesses held up well, supported by disciplined cost control and better operational execution. Just as importantly, we continued to make real progress on our strategy around simplifying the Group, strengthening the balance sheet, and embedding a decentralised operating model that improves accountability and performance," he said.

The company once again didn't pay a dividend and has said it won't resume dividends till it gets its net debt into the lower half of a $400 million to $900 million range. As at the end of the half-year (December 31)the company had net debt of $1,164 million, which Reding said was "below internal expectations".

Last month Fletcher Building announced the sale of its problematic construction division to French company VINCI Construction, part of the VINCI Group, for $315.6 million.

Towards the end of last year it was reported that Fletcher was seeking initial offers for its residential business before Christmas 2025.

There's no update on that pending sale with the latest results announcement. The company doesn't say too much at all about the residential division in the announcement, which does suggest a sale might not be far away.

In  the appendix to the company's results presentation, Fletcher Building says 223 units were "taken to profit" in the latest half, which is some 81 units (-27%) lower than for the first half of 2025.

The operational (EBIT) profit for the division in the latest half was $12 million, which is $2 million lower than for the same period a year ago. The company has just under $1 billion worth of invested capital with the residential business, which is up about 9% on the same period a year ago.

In terms of the outlook for Fletcher Building, Reding said New Zealand market volumes were largely flat in the second quarter of the year and overall remain subdued "with meaningful improvements not expected until calendar year 2027".

Volumes in Australian businesses are mixed with Laminex and Fletcher Insulation starting to show a positive volume trend which, if continued, should support earnings

"Margin compression remains a challenge across a number of Business units, but cost out initiatives in Business Units, Divisions and Corporate have helped support profitability and operating leverage should provide upside as volumes recover," Reding said.

"Our best estimate for Construction [sale] completion remains Q1 FY27 and Residential and Development strategic review remains underway; any potential cashflow and cost out benefits should be seen from FY2.

"Looking ahead, we expect the benefits of actions already taken on costs, portfolio simplification, and capital discipline to progressively support performance as market conditions improve."