“Lendlease experienced a disappointing financial result in financial year 2020, as the group brought to account costs for the exit of the engineering business, while the core business was impacted by COVID-19 in the second half,” Mr McCann said.
“The group responded swiftly to the onset of COVID-19 with the health and safety of our people and customers paramount, along with measures to strengthen our financial position.”
Lendlease invests, builds and develops mixed-use projects, worth about $112 billion, across European and Asian cities. To help fund projects, it sells down its stake in the sites to investment partners.
To stem the losses, the group undertook a range of measures from raising new equity to significant cost reductions and a review of project spending.
The core business was the hardest hit with delays in converting development opportunities across what the group calls its “urbanisation” sites, while the mixed-used residential and communities business experienced weak trading conditions.
“In construction, the impact was greater in our international regions, particularly in cities where
mandated shutdowns were implemented,” Mr McCann said.
This included lower productivity, projects being put on hold and delays in the the start or securing of new projects. Fuelling the declines were losses in value in its investment portfolio of $188 million.
The sale of the engineering business is anticipated to complete shortly, subject to the satisfaction
of the final conditions. The sale price is $160 million, payable in instalments in 2021 including
Mr McCann said the Cross Yarra Partnership consortium for the Melbourne Metro Tunnel Project is
continuing to work with the Victorian Government on a confidential basis to resolve issues in
relation to the scope and costs on the project.
He said the sale of the services business within the engineering operation has been paused. The full year distribution was 33.3¢.