Fulton Hogan has lifted annual profit by 9.7 per cent, with activity in Auckland and Christchurch underpinning the construction company’s performance, offsetting slower Australian activity.
Net profit rose to $151.6 million in the six months ended June 30, from $138.2m a year earlier, the Christchurch-based company said in a statement.
Revenue fell 11 per cent to $2.9 billion, with a slowing resources sector across the Tasman, particularly in Western Australia and Queensland, weighing on sales.
Fulton Hogan now gets 53 per cent of annual revenue from Australia.
“Our New Zealand regional businesses were really solid this year, particularly in Christchurch and Auckland – Auckland on the back of strong population growth and Christchurch still on the back of the earthquake rebuild,” managing director Nick Miller told BusinessDesk.
He said Western Australia and Queensland faced considerable economic uncertainty as the mining sector slowed down, and the divide between the resources and non-resources reliant states was becoming more evident.
By contrast, New South Wales “has been very strong on the back of a very strong pipeline of infrastructure procurement by the state government”.
The company anticipates a “steady year” in 2016 as residential building work in Auckland stays strong, though “beyond the backend of 2016 we see softening in the NZ infrastructure market and may see that accelerate in regional sectors on back of economic downturn in dairy pricing”.
In Australia, Fulton Hogan has won contracts on the National Broadband Network, which Mr Miller said could deliver $140m a year for the next five years, while roading work in NSW and the prospect of Queensland winning the Commonwealth Games provided more opportunities.