Troubled New Zealand contractor Fletcher Building lost a fifth of its value this week following an announcement on Monday that profit for the first half of 2019 would be in the range of US$430m to $460m, 10% lower than in the previous year.
The resulting sell-off wiped $660m off its market capitalisation, and brought its share price to its lowest level since 2004.
The company added that its latest estimate was compiled before "significant items" were taken into consideration, meaning the final result could be lower than the forecast.
Among the causes the company gave for the slowdown were a power failure at its Golden Bay Cement plant in Portland, a slowdown in the Australian residential market and a reduction in land development earnings.
The announcement follows a difficult year for New Zealand’s largest construction group, which in August posted a loss of $130m.
David Price, a broker at investment bank Forsyth Barr, told the New Zealand Herald that Fletcher had failed to make the most of the country’s long running construction boom, and now faced slowing demand in its home market, and also in Australia. He said: "What people are concerned about is that this is just the start of the downturn."
Image: Render of the NZ$700m New Zealand International Convention Centre, one of Fletcher’s troubled projects (Fletcher)