Lendlease Reports $531M Loss, Accelerates Asset Sales to Stabilize Balance Sheet
Lendlease Group posted a A$749 million ($531 million) loss for the fiscal year ending June, a sharp decline from last year's A$225 million profit. The company attributes the loss to non-cash impairments, provisions, and reduced asset sales revenue. Despite challenges, Lendlease remains committed to its asset disposal strategy, with A$3.4 billion in sales completed and A$2.5 billion more in assets earmarked for divestment. While construction remains profitable, corporate costs and high debt level
Lendlease Group reported a fiscal year loss of A$749 million ($531 million), reversing a A$225 million profit from the previous year. The company’s stock has plummeted over 75% in recent years, and shares fell another 11% following the earnings announcement. The loss was driven by non-cash impairments of A$340 million, provisions of A$92 million, and lower income from asset sales compared to the prior year.
## Asset Sales and Financial Challenges
Lendlease’s Capital Release Unit (CRU), tasked with selling non-core assets, reported a A$500 million loss before interest, tax, depreciation, and amortisation, down from a A$379 million profit the year before. The company has sold A$3.4 billion in assets under its disposal campaign, including A$1.2 billion in fiscal 2026 alone. An additional A$2.5 billion in invested capital remains tied to assets marked for sale.
Recent transactions include the A$90 million sale of overseas sites and inventory and the A$400 million divestment of The Exchange TRX retail and office complex in Kuala Lumpur. The company also agreed to sell its 50% stake in Sydney’s O’Connell property precinct to Charter Hall and its remaining shares in Keyton, Australia’s largest retirement village operator, to Aware Super for A$525 million.
## Construction Segment Remains Strong
Despite broader financial struggles, Lendlease’s construction division reported EBITDA of A$167 million, up from A$33 million the previous year, with revenue rising 29% to A$3.9 billion. The unit secured A$6.4 billion in new work, up from A$5 billion the year before, with a focus on defence, transport, and data centre projects. An additional A$13 billion in bids is currently underway.
The company’s Investments, Development, and Construction (IDC) unit posted an operating profit after tax of A$233 million, down from A$346 million due to fewer development completions. However, Lendlease expects growth in construction and pre-sold apartment revenues to boost IDC earnings in fiscal 2027, with guidance raised to 37-41 Australian cents per security.
## Rising Costs and Debt Concerns
Operating costs for retained businesses and assets in the CRU division exceeded revenue by A$196 million. Corporate expenses surged 74% to A$221 million, including a A$114 million restructuring charge tied to winding down international operations. Net finance costs declined 23% to A$194 million but fell short of targets.
Lendlease’s net debt rose to A$3.7 billion, up from A$3.4 billion the previous year, while statutory gearing increased to 30.3% from 26.6%. The company maintains A$4 billion in available liquidity, including A$3.2 billion in undrawn debt, and aims to reduce gearing to 15%.
CFO Andrew Nieland acknowledged that while gearing remains above target, asset sales and reduced capital expenditure provide a path to debt reduction. The company continues to prioritize balance sheet strengthening and disciplined capital management to deliver long-term shareholder value.
