Fletchers sets aside $165m for possible Convention Centre losses

By earthnews
10 months Ago

Fletchers sets aside $165m for possible Convention Centre losses

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File photo. Fletcher Building chief executive Ross Taylor said the rebuild of the fire-damaged convention centre was significantly complex and challenging.
Photo: RNZ / Cole Eastham-Farrelly

Auckland’s long-awaited International Convention Centre is causing more pain for contractor Fletcher Building, as it sets aside another $165 million for possible losses from the project.

The hit would be included in the company’s half year financial results, scheduled for release next week.

It comes after the company took a $255m hit relating to the project in its 2023 full result.

Fletcher also set aside $15m for possible losses from the Wellington International Airport car park project, as it worked remediate quality issues and to settle claims.

It said the convention centre project remained on track to be finished late this year, with car parks now complete and the Hobson Street hotel scheduled to be handed over to SkyCity this month.

It said steel remediation throughout the convention centre, which was severely damaged in a 2019 fire, was “98 percent complete”.

“Despite this progress, actual and expected costs to complete the project have increased, principally in the areas of steel remediation, internal fit-out, and installation of operating systems,” Fletcher told the share market.

“The increased costs are primarily due to higher levels of subcontractor resource required to deliver the final stage of the project.”

Fletcher said in addition, the company may not be able to recover some of the money from its contract works insurance.

The company continued to claim third party liability insurance of more than $100m.

Chief executive Ross Taylor said the rebuild of the fire-damaged site was a “significantly complex and challenging project”.

“It is disappointing we require further provisions on this project and the [Wellington Airport] car park,” he said.

“We remain on track to complete construction of all legacy projects by the end of calendar 2024, however cost and revenue risk will remain until we have done so. We will vigourously pursue our claims for recoveries on the legacy projects, which are likely to take until FY25-26 to settle.”