* Fletcher expects 2013 earnings of NZ$560mln-$610 mln
* Sees NZ housing market improving, Australia still a risk
* Anticipates stronger earnings in H2 vs H1
(Adds quotes, detail)
WELLINGTON, Nov 20 New Zealand's Fletcher
Building Ltd said it expects its full-year earnings to
rise at least 12 percent despite a slowdown in the Australian
market, pushing its shares to a 13-month high.
Australasia's biggest building products company said
earnings were being driven by its strong New Zealand business,
while demand in the United States and Asia has improved although
Europe remained difficult.
It forecast adjusted operating earnings before interest and
tax of NZ$560 million to NZ$610 million ($459 million-$500
million) for the year to end-June 2013, up from NZ$502 million
"The board believes that this is achievable on the basis of
the momentum seen in New Zealand recently, which is expected to
continue for the whole of the year," Chairman Ralph Waters told
the annual meeting.
Fletcher's shares rose 4 percent to NZ$7.68, their highest
since October 2011. Its shares have climbed around 25 percent so
far this year, slightly outperforming the benchmark NZX-50 index
Waters warned that the outlook was vulnerable to a downgrade
if the Australian building market continues to slow, or if it
sees further weakness in its Formica division, which has been
hurt by a fall in demand in Europe.
Fletcher Building, which manufactures concrete,
plasterboard, laminates and steel building products, earns 47
percent of its earnings in Australia, 37 percent in New Zealand
and the remainder in the United States, Europe and Asia.
The company has been stung by weakness in the Australian
building market, and reported a 35 percent fall in net profit in
2011/12 to NZ$185 million. It did not give a net profit forecast
It said it would now account for all restructuring costs
within normal earnings rather than as one-off items, leading it
to restate its 2012 earnings at NZ$502 million from the
previously stated at NZ$556 million.
Waters said earnings were expected to be stronger in the
second half. An improvement in residential home building in New
Zealand was continuing, while rebuilding activity picked up in
Christchurch, which was devastated by an earthquake last year.
The Australian construction market remained challenging, and
a series of interest rate cuts would not be enough on its own to
lift consumer confidence and kick-start the building industry in
the short term, he said.
Asian markets continued to grow, but signs of slowing growth
in China were a concern. The company exports mainly Formica and
roofing tiles to Asia and has been eyeing growth opportunities
in the region.
(Reporting by Naomi Tajitsu; Editing by Richard Pullin)