Troubling projects undermine Lendlease bottom line
LENDLEASE chief executive Steve McCann says he is embarrassed by the problems that have forced the construction company to take a $ 350 million post- tax impairment in its first- half results.
Lendlease is launching a review of its engineering and services unit after problems on projects including Sydney’s NorthConnex motorway tunnel forced the provision.
Shares in the global construction and development company plummeted yesterday after it announced the hit to its bottom line.
It said the impairment was mostly related to lower productivity in post- tunnelling phases of NorthConnex, as well as wet weather, access issues and the need to fix defective design on other projects.
“It is more than embarrassing,” Mr McCann said.
“We’ve got to take accountability and I’ve got to take personal accountability as the CEO of this business that we haven’t got this business yet into the shape that it needs to be in.”
The NorthConnex problems are understood to be unrelated to a site accident last month in which a worker’s leg was crushed by a giant saw.
Lendlease is negotiating with third parties to mitigate anticipated losses but said it cannot give guidance on what impact that would have.
“At this stage it is unclear as to the extent to which these negotiations will be successful to mitigate the underperformance,” the company said in a statement.
“Today’s announcement about the engineering and services business is extremely disappointing particularly given the underlying performance across Lendlease’s other businesses.”
The building giant appointed a new head to the engineering and services unit in May.