The Australian construction company Lendlease reported last week that its operating profit had fallen 26% from the same period in 2019, from AU $278 million (U.S. $219 million) to AU$205 million ($162 million.) It also cut its dividend by 50%.
Lendlease has multiple projects in the United States, notably the 1 Java Street project in Manhattan, which will transform a city block into apartments at an estimated value of $718 million. Also of note, Landlease continues construction of an urbanization project in Los Angeles valued at $600 million. The company is engaged in a third significant project, Google’s upcoming massive mixed-use campus in San Jose, which will, after three years of construction, cover 81 acres and turn a downtown area into office space, housing, and green space.
The earnings drop came when Lendlease’s CEO, Steve McCann, decided to step down. However, McCann’s decision to leave likely has nothing to do with the profit decline. COVID-related restrictions on building projects throughout both the United States and Asia negatively impacted Lendlease’s revenues. Lendlease’s new CEO, Tony Lomardo, formerly ran the company’s Asia division.
Despite the earnings drop, work continues in earnest for the massive construction company. On top of current construction projects, Lendlease estimates AU$4.9 billion, up from $3.1 billion in 2020, in new work. Company officials announced that the soft economy allowed Lendlease to secure better deals with attractive terms.
Although Landlease reported a significant drop in operating profit, increased demand for construction, along with ongoing projects, frame a prosperous future for the Australian behemoth.