Trou­bling projects un­der­mine Lendlease bot­tom line

Townsville Bulletin - - NEWS - JAMES HALL

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.

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