Construction and property group Lendlease expects to declare a full-year statutory loss of $230 million to $340 million, compared to a $467m profit last year.
Lendlease said exiting its engineering business will cost it about $550m, the high end of previous estimates, while COVID-19 has reduced the value of its $4 billion investment portfolio by about $130m to $160m.
The company said its full-year core profit after tax, not including the engineering impacts, would be $50m to $150m.
It said that Lendlease Corporation wouldn’t declare a final dividend this year, though the trust that owns its property portfolio should pay a small distribution.
“Obviously it’s been a tough year, and clearly COVID’s had a significant impact,” chief executive Steve McCann told analysts on a conference call.
Lendlease is currently involved in WA’s Waterbank, Curtin University and Forrest Chase redevelopment projects.
Lendlease said that COVID-19 has delayed a number of its urbanisation projects including the Melbourne Quarter, Barangaroo and International Quarter London, as well as a number of construction projects overseas.
The company said it had agreed to sell a 25 per cent stake of One Sydney Harbour, its under-construction 72-storey residential tower in Barangaroo, to Mitsubishi Estate.
Lendlease didn’t disclose the purchase price but said the sale would contribute to about $100m profit after tax in FY21.
Lendlease said the sale of its engineering business to Spanish conglomerate Acciona for $180m should complete early in fiscal 2021.
The company said it enters FY21 with gearing expected to be below 10 per cent and total liquidity of more $5b, representing cash on hand and undrawn debt facilities.
“We’ve done everything we can to progress transactions despite the external environment, and to put us in a position where we go into FY21 with a lot more clarity on where we’re headed,” Mr McCann said.
“We are in a position now with very strong liquidity, and going forward into FY21 and beyond, we believe there will be significant opportunity to invest our capital in attractive returns.”