News – AU – Lendlease cuts dividend as profits fall on results hit by the pandemic

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Global developer Lendlease cut its dividend in half after a slump in earnings as the pandemic slowed the development of its projects around the world

The construction and development giant has around 20 major projects in the works, many in key European, Asian and American cities hit by the pandemic, including its $ 22 billion campus for Google in San Francisco. p>

Lendlease’s bottom line was negatively impacted by the residual effects of COVID-19, which had an impact on development profits, poor cash flow and lower investment income generated

The Group’s core profit after tax of 205 million USD was below consensus expectations of 213 million $ 196 million legal profit declined 37 percent in the six months to December 2020 as the global pandemic and city lockdown ceased work on its office, retail and residential projects

Lendlease has halved its interim dividend to 15 ¢ March will be paid out The group did not issue a profit forecast

CEO Steve McCann, who pondered his legacy after retiring in late May, pointed out the linchpin of the company in building major urban projects in cities around the world

“We have expanded our development pipeline significantly in a decade and now we have projects valued at over $ 110 billion”The other shift was in fund management, where we’ve grown 14 percent a year for several years in a row

“From my perspective, this is an industry where real estate is a long-term game. Of course, you can control the short-term, cyclical effects as much as you like, but I’ve always made decisions that are based on long-term value creation, and hopefully will that change over time, ”he said

During the six months, Lendlease’s investment division increased funds under management to $ 379 billion, up $ 17 billion from the previous period

The $ 82 billion companies listed on the ASX invest, build and develop international mixed-use projects valued at around 113 billion US dollars. Parts are sold to investment partners to finance projects

“Expect fiscal 2021 to be a tough one and focus on fiscal years 2022 through 2023,” said Sholto Maconochie, an analyst at investment bank Jefferies

“Lendlease claims production will accelerate to over $ 8 billion a year and about $ 20 billion of the existing pipeline will be turned into ongoing projects by the end of 2023,” Maconochie said

Stuart McLean, an analyst at Macquarie Securities, said Lendlease’s development business remains a key concern as the near-term outlook for commercial developments is difficult

Mr McCann said the group’s profit bounced back from the worst of the COVID-19 impact, although activity is still below pre-pandemic levels

Lendlease announced that it will market the second residential tower in Barangaroo, Sydney after 85 percent of the apartments in its first tower in One Sydney Harbor were pre-sold. Lendlease will sell its interest in the two towers over time.

In the six months, Lendlease sold its telecommunications and solar farm businesses and resolved its cost overruns and scoping issues with the Melbourne Metro’s $ 11 billion project.Since then, the company has sold an additional 25 percent of its retirement business and the sales process of its services business restarted

Lendlease, Steve McCann, Construction, Dividend

News – AU – Lendlease cuts dividend as pandemic affects profits

Source: https://www.smh.com.au/business/companies/lendlease-cuts-dividend-as-earnings-tumble-in-pandemic-hit-results-20210222-p574l5.html