(Updates throughout, adds chairman comments)
New Zealand's Fletcher Building Ltd (FBU) said chief executive Mark Adamson would step down, and the company also cut its earnings guidance for the second time in four months due to bigger than expected losses at its building division.
Fletcher Building said it expected operating earnings to be approximately NZ$525 million, down from previous guidance of NZ$610-$650 million. It follows an earnings downgrade in March, and the same cost overruns are the cause, Fletcher said in a statement.
Fletcher Building Chairman Sir Ralph Norris said it was "very disappointing" to see further losses in the building and interiors business and that "the Board believes it is the right time for Mark to leave ... to allow a new CEO to lead Fletcher Building through this period and into the next phase of its strategy."
Construction costs have risen by half in under three years, as New Zealand's economic boom faces capacity constraints and labour shortages.
"I am disappointed to finish my tenure on the back of a challenging result in the Construction Division, however I am proud of what has been achieved over the last five years," Adamson said in the statement.
Francisco Irazusta will take over as interim CEO, effective from July 24, and the company will start a process to appoint a new CEO, it said. Irazusta joined the company in March 2015 and is currently the chief executive of the international division.
