Fletcher Building’s share price has plunged by 10.63% today.
Fletcher Building is one of New Zealand’s largest listed companies and the parent of Fletcher Construction. Its share price currently sits at $4.96, and the company has a market capitalisation of $4.23 billion.
Why is Fletcher Building’s Share Price Dropping?
This morning it was announced by major outlets that the company’s half-year profit forecast was down 10%.
The new 2019 full-year profit is expected to be between $630m and $680m.
The drop is being blamed on an outage at Golden Bay Cement in Auckland, as well as conditions in the Australian market.
This is not the full extent of the issues faced by the company. In August, Fletcher posted a full-year loss of $190m. Following this, it cancelled dividend payouts to shareholders. In February, the company reported an expected loss of $660m from its Building & Interiors division.
There is more to come as the company’s annual meeting is currently being held.
What’s next for [NZX:FBU] stocks?
This isn’t the first dip Fletcher has taken this year, or even this month. We previously published an update on a decline as a result of selling off its Roofing Products manufacturer.
At the time of that update, the 52-week price drop was 11.27%, and we predicted that the downward trend would continue. Today that drop is at 17.18%. Fletcher’s share price hasn’t been this low since the housing crisis.
Fletcher’s trouble speaks for itself, and New Zealand may be ready for a new construction company to step up.
We anticipate Fletcher shares will remain volatile for the immediate future.
Editor, Money Morning New Zealand