Not sure what happened to the original FBU thread but in that I commented several times on the likelihood of losses extending far beyond the scope of those identified in the original write-down and suggested there were systemic problems in the construction division.
I was discussing this with an investor the other day and my comment was really its truly remarkable that a company that over many decades has operated in the large project construction business and is supposed to have really huge amounts of expertise in that area could get things so badly wrong with its current projects.
Its quite an "accomplishment" for example to tender for the Sky City Convention center project at just over $400m and then go on to lose over $200m on that project isn't it !
As I commented before, where there's smoke there's fire. If they are so incredibly incompetent in that project there will be systemic incompetency's throughout that division in a wide range of other projects.
How could things go so incredibly wrong for a company with many decades experience on a vast array of large construction projects ? Is it time to shut that division down completely ? Time for more heads to roll at a board and management level ? There was widespread derision towards FBU at last February's Auckland ST meeting which seems with hindsight to have been very well founded.
I am not sure why so many analysts love this stock and have been so forgiving of their systemic underperformance ?
I suggested many months ago that I could see no reason why this stock should trade above $5. Mark my words, whatever problems they identify in the current review will not be the end of the problems within that division.
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