Lendlease Group (ASX: LLC) has reported a statutory loss after tax of $318 million for the half year ended 31st December 2025, a sharp reversal from the $48 million profit it posted in the same period a year earlier. The result came in well below analyst expectations, with consensus forecasts sitting around a $26 million statutory profit.
The property and infrastructure giant blamed the result on $118 million in negative investment property revaluations and impairments, primarily tied to assets in Singapore, alongside timing issues in its development business and the ongoing drag from its Capital Release Unit.
What Happened: The Numbers Behind the Miss
The headline loss masks a more complex picture underneath. Here’s a breakdown of the key financial metrics from the Lendlease H1 FY2026 result:
- Statutory loss after tax: $318 million (vs $48 million profit in H1 FY2025)
- Operating profit after tax (OPAT): Loss of $200 million (vs gain of $122 million)
- IDC segment EBITDA: $204 million (down from $341 million)
- CRU segment EBITDA: Negative $284 million, reflecting write-downs and transaction timing
- Construction segment revenue: Up 22% year-on-year
- Total operating EBITDA: Swung to a loss of $135 million from a gain of $318 million
- Interim distribution:2 cents per security (up from 6 cents a year ago)
The Investments, Development and Construction (IDC) arm contributed $87 million to operating profit. But the Capital Release Unit (CRU), the vehicle Lendlease is using to exit non-core assets, delivered a $287 million drag that overwhelmed the positive contributions from elsewhere.
Lendlease’s Barangaroo South development in Sydney, one of Australia’s flagship urban renewal projects.
Construction Was the Bright Spot
Not everything was grim. The construction segment delivered a standout performance, with revenue growing 22% during the period. Lendlease secured $4.7 billion in new development projects, signalling continued demand for its Australian pipeline work in defence, social infrastructure, and life sciences.
The company now has $3.0 billion in announced or in-progress transactions, giving management some confidence about earnings visibility heading into FY27 and FY28, when major project completions are expected to flow through.
Outgoing CEO Tony Lombardo said H1 was always going to be the weaker half.
The CRU Drag and What It Means
The Capital Release Unit continues to be the source of significant volatility in Lendlease’s reported numbers. Since May 2024, the company has announced or completed $2.8 billion worth of asset sales as part of its broader strategic simplification.
That process is not without pain. Write-downs on assets being sold at discounted values, combined with the costs of exiting legacy international construction positions, have weighed heavily on near-term results.
The company previously flagged $95 million in after-tax losses related to land parcels, along with a further $14 million tied to tail risks from its exited international construction businesses. Both figures materialised in the H1 result as expected.
This is not a new story. Lendlease’s FY25 full-year result also carried significant charges from the same simplification push, though management at the time pointed to improving underlying metrics.
FY26 Guidance Maintained
Despite the heavy first-half loss, management held firm on its FY26 guidance. The IDC segment is still expected to deliver earnings per security of 28 to 34 cents for the full year, with the second half anticipated to be materially stronger.
No earnings guidance has been provided for the CRU segment, which will remain unpredictable as asset sales and settlements play out over the coming months.
The company also confirmed its balance sheet priorities remain unchanged:
- Reducing net debt
- Completing capital recycling
- Growing the Australian investment platform
- Restocking the domestic development pipeline
How the Market Reacted
The result sent Lendlease shares down 3.17% on the day, closing at $4.58. The stock is now trading close to its 52-week low of $4.31 and has fallen roughly 27% over the past 12 months, a stark contrast to the broader ASX 200, which is up around 9% over the same period.
 
Key share price data (as of 23rd February 2026)
Investor confidence has been hard to rebuild. Even with construction performing well and guidance maintained, the market appears to need more evidence that the worst of the write-downs is behind the company before it re-rates the stock meaningfully higher.
Also Read: She Built an Empire From the Sidelines. Now the World Mourns Anna Murdoch Mann
What’s Next for Lendlease
The second half of FY2026 will be critical. Management has guided for higher transactional profits and stronger IDC earnings in H2, driven by project completions and additional capital recycling proceeds.
Longer term, Lendlease is betting that a simplified, Australia-centric business model will generate more consistent and predictable returns. The exit from international construction, though costly, removes a significant source of earnings volatility that plagued the company for years.
With the new strategic structure taking shape, the real test will come in FY27 when management expects the development pipeline to start delivering at scale.
