Lendlease Group swung to a loss in the first half of its financial year, reporting a loss after tax attributable of A$318 million for the six months ended December 31. The result contrasts with a profit of A$48 million in the same period a year earlier and followed a series of valuation adjustments and impairments on investment property.
The company recorded A$118 million of non-cash negative revaluations and impairments on its investment property portfolio, with the adjustments principally concentrated in the United States, the United Kingdom and Singapore. Those write-downs were a key driver of the move from profit to loss.
Market reaction was sharp. Lendlease shares tumbled as much as 9.17% to A$4.160, marking the stock’s lowest intraday level since mid-December 1987. The drop represented the company’s largest intraday percentage decline since February 19, 2024, while the broader ASX200 index eased 0.7% over the same trading period.
On an operating basis after tax, the group reported a A$200 million operating loss. That outcome reflected a mix of results across its divisions: the Investments, Development and Construction (IDC) arm contributed A$87 million of operating profit, whereas the Capital Release unit posted a A$287 million operating loss.
Within the IDC segment there were divergent trends. Earnings from Investments and Development were lower compared with the prior year, but Construction returned to profit, delivering an operating profit of A$69 million after having recorded a A$25 million loss a year earlier. The improvement in Construction was attributed to higher revenue and enhanced project performance.
Chief Executive Tony Lombardo described fiscal 2026 as a "transitional year" and said the group expects IDC earnings to improve through the second half and carry into fiscal 2027. Lendlease reaffirmed full-year guidance for the IDC segment of 28-34 Australian cents per share, supported by anticipated transactional gains.
The company declared an interim distribution of 6.2 Australian cents per share, up from 6 cents a year earlier. Currency disclosure in the report noted an exchange rate of $1 = 1.4142 Australian dollars.
Summary
Lendlease posted a first-half loss of A$318 million, driven primarily by A$118 million of non-cash revaluations and impairments across its investment property holdings and a A$287 million operating loss in its Capital Release unit. The result pushed the share price to its weakest level since 1987 and coincided with a fall in the ASX200.
Key points
- Lendlease recorded a loss after tax attributable of A$318 million for the half-year ended December 31, down from a profit of A$48 million a year earlier.
- A$118 million of non-cash negative revaluations and impairments concentrated in the United States, the United Kingdom and Singapore were recorded against investment properties.
- Operating results were mixed: IDC produced A$87 million in operating profit, Construction recovered to a A$69 million operating profit, while the Capital Release unit generated a A$287 million operating loss.
Risks and uncertainties
- Valuation volatility in investment property - the company’s results were directly affected by A$118 million of non-cash revaluations and impairments, indicating sensitivity to property valuations in key markets (real estate sector).
- Capital Release unit losses - a A$287 million operating loss in this unit poses uncertainty over near-term cash flow and recovery prospects for that area of the business (investment/finance sector).
- Market sentiment and share price volatility - the share price fell sharply to its lowest level since 1987 and recorded its steepest intraday decline since February 19, 2024, reflecting investor sensitivity to the reported results (equity markets).