Fulton Hogan more than doubles profit

Construction firm Fulton Hogan has lifted its pre-tax interim profit by 144 per cent. Source: AAP

FULTON Hogan, the New Zealand privately-held construction firm, has more than doubled first-half pre-tax earnings with its five business units all running ahead of budget.

Pre-tax profit climbed 144 per cent to $NZ92.8 million ($A87.72 million) in the six months ended December 31, for a net profit of $NZ64m, the Christchurch-based company said on Monday.

Revenue was $NZ1.64 billion in the half. The forward order book was $NZ2.8b, down from the $NZ3.4b level it gave in October.

The New Zealand business was underpinned by a pick-up in the economy that's driven regional and infrastructure business, while the Australian sector was helped by increased airport work and the completion of six of seven distressed projects that had needed impairment charges in the past.

Managing director Nick Miller told BusinessDesk the slowing of Australian capital investment from the resources sector would flow through into Fulton Hogan's business, and the strong New Zealand dollar was also weighing on trans-Tasman earnings.

Still, a pipeline of large public-private partnerships has opened opportunities for Fulton Hogan in Australia.

"For us, the challenge and the opportunity, is one of scale" and the company would participate as part of a consortia for the projects, Mr Miller said.

"We're positioning Fulton Hogan to play to its strength as a key enabler to access that work."

Fulton Hogan will complete the last two tranches of $NZ117m in a share buyback to allow Shell Group to cash up out of the company.

Once that's completed, Fulton Hogan plans to accelerate a new phase of growth.

"At the completion of that (the Shell share buyback), Fulton Hogan is going to have a lot of available capital for the growth of the business," Mr Miller said.

Fulton Hogan retired $NZ138.9m of debt in the half, and refinanced some $NZ155m of banking facilities using its operational cash flow and the sale of some non-core assets, it said.

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