Dive Brief:

• Citing the effects of the coronavirus on operations around the world, Australian contractor and developer Lendlease has declared a full-year loss of AUD 230 million to AUD 340 million (U.S. $159 million to $236 million) after tax, compared to a $467 million profit last year.
• The company's profit after tax and before pandemic-related costs will be between $50 million and $150 million, according to a release, a sharp decline from the $497 million recorded for the same time last year.
• The sale of its engineering business to Spanish firm Acciona will cost about $550 million, the company said, and is on track to be complete early next year.

Dive Insight:

Since the coronavirus outbreak began, Lendlease has faced delays and shutdowns at key project sites, weaker apartment sales and settlements and reduced productivity in construction activity, according to an analysis by Moody’s Investors Service provided to Construction Dive. Site shutdowns mandated by government orders have impacted projects in New York City, Boston, London, Singapore and Milan.

The outbreak has also led to lower productivity, projects being put on hold and delays in starting or securing of new projects. 

In late April, Lendlease executives took steps to strengthen the company’s balance sheet. The firm asked investors for $1.15 billion via a fully underwritten institutional placement of $950 million and a non-underwritten security purchase plan to eligible security holders of up to $200 million. 

The funds increased the firm’s available liquidity to just under $4 billion, support its $112 billion global development pipeline and provide flexibility for further investments, said CEO Steve McCann in a statement.

The company also announced at that time that senior staff and non-executive board members would take salary and fee cuts of up to 20%.

While most of the company’s construction projects are now back online, McCann said in an earnings call yesterday that revised social distancing protocols and additional health and safety standards are affecting productivity on some projects. The company announced it won't declare a final dividend this year.

“Obviously it’s been a tough year, and clearly COVID’s had a significant impact,” he said.

However, McCann noted the company is moving forward with many new projects including some in San Francisco such as the 30 Van Ness condo tower and its plan with Google to deliver mixed-used neighborhoods in the Bay area.