Source: Radio New Zealand
Fletcher Building says the third quarter ended in March and largely reflected the period before the war in Iran. Fletcher Building
Construction company Fletcher Building says third quarter sales are improving, though the outlook is less certain as conflict in the Middle East sees costs rise and supply chain risks increase.
“As was the case in prior quarters, trading conditions remained competitive, with ongoing margin pressure and compression continuing across business units and most notably in the Distribution division, Firth and the Steel business units,” Fletcher chief executive Andrew Reding said, adding the third quarter ended in March largely reflected the period before the war in Iran.
Since then, he said the plastic and resins Iplex business, as well as its urea-based businesses Laminex and insulation products, were being directly affected by cost increases.
He said fuel remained a material cost driver, with diesel representing the majority of consumption across the group.
“While the price increases to date are significant, the impacts are being partly mitigated through bulk purchasing, hedging and pass-through pricing mechanisms,” the update says.
“The group consumes nearly 36 million litres of fuel annually, with diesel accounting for 94 percent of total usage.
The Heavy Building Materials division accounted for more than half of the total consumption, with Construction division accounting for nearly a third.
It says price increases across divisions ranged from a modest 1- to 5 percent, while Plastics saw significant prices increase of up to 36 percent, which included fuel-linked surcharges.
While pressure from staff had been so far limited, there had been increased feedback from people wanting to work from home, as fuel-driven commuter costs cut more deeply into household budgets.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
