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IDC Segment EBITDA: $204 million, down from $341 million. Statutory Loss: $318 million, including $118 million of non-cash negative investment property revaluation and impairment. Operating Loss After Tax: $200 million, with a positive $87 million contribution from IDC and a loss of $287 million from CRU. Reported Statutory Gearing: 25.8%. Funds Under Management: Stable at $48.7 billion. Co-Investment Yield: Gross yield of 4.4%. Development Completions: $1.3 billion, including Victoria Cross in North Sydney. Gross Apartment Pre-Sales: Increased to $3.3 billion. Construction Revenue Growth: Up 22%. Construction EBITDA Margin: 3.7%. New Work Secured in Construction: $4 billion. Net Debt: $3.3 billion. Available Liquidity: $3.3 billion. Group Corporate Cost: Decreased 4% to $55 million. Net Finance Costs: Decreased to $85 million. CRU Capital Recycling Initiatives: $2.8 billion completed or announced. CRU EBITDA Loss: $284 million. Cost Savings Achievements: Net overheads reduced $58 million to $197 million.

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Release Date: February 22, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Lendlease Group (LLESF) has made significant progress in its capital recycling initiatives, completing or announcing $2.8 billion of CRU capital recycling initiatives. The company maintains a strong financial position with $3.3 billion of liquidity, providing flexibility for capital recycling. The Construction segment showed strong revenue growth of 22%, driven by new project commitments and commencements. Lendlease Group (LLESF) has secured more than $4.7 billion in new Australian Development projects in the first half, positioning it well to achieve its $10 billion target for the financial year. The company's investments platform continues to grow, with more than 80 investors and $2.8 billion of capital available for deployment across existing mandates.

Negative Points

Lendlease Group (LLESF) reported a statutory loss of $318 million for the half year, including significant non-cash negative investment property revaluation and impairment. The IDC segment EBITDA decreased significantly from $341 million to $204 million due to limited completions in development and lower transaction earnings in investments. The Capital Release Unit (CRU) reported an EBITDA loss of $284 million, reflecting non-cash write-downs and provisions. The group's statutory gearing remains high at 25.8%, with an underlying gearing of 32.9%, above the target of 15%. The company faces ongoing risks and provisions related to international construction projects and community land parcels, impacting financial performance.

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Q & A Highlights

Q: Can you explain the guidance range for IDC earnings of $0.028 to $0.034 per security and the factors influencing this range? A: Simon Dixon, Group CFO, explained that the first half IDC delivered $0.046 per security. To achieve the guidance range, the second half must deliver $15.4 to $21.4 per security. The outcome depends on continued operational delivery across Investments, Development, and Construction, as well as the completion timing of TRX and The Crown Estate joint venture. The bottom of the range assumes more conservative settlement timing, while the top assumes major completions occur in FY26.

Q: Regarding the provisions and write-downs announced, how much is non-cash, and what is the status of discussions with the community land parcel owner? A: Simon Dixon stated that $180 million is non-cash, with $136 million for the community's parcel and $44 million in provisions for international construction. Discussions with the landowner are ongoing, and the write-down of the community's parcels is non-cash, affecting the existing balance.

Q: Can you break down the $3 billion in asset sales for the second half into categories of certainty? A: Simon Dixon clarified that joint ventures with Crown Estates and TRX are contracted, totaling around $640 million. Three exclusive transactions, including Keyton, UK Build to Rent, and APPF recapitalization, will deliver over $1 billion. The remainder involves capital recycling from Victoria Cross and other investments, all currently underway.

Q: What was the P&L impact of the hybrid interest expense benefit, and what was the $47 million reversal of a prior-period impairment? A: Anthony Lombardo noted the hybrid benefit in the first half was $9 million, booked as a dividend. The $47 million reversal relates to provisions adjusted as development projects progress, impacting NPAT positively.

Q: Can you clarify the $44 million construction provision and the status of APPF Retail's liquidity situation? A: Simon Dixon explained the $44 million is a new provision for a long-standing project liability. Regarding APPF Retail, they are in exclusivity to recapitalize the fund and intend to reduce their stake as part of the process, with completion anticipated in the next few months.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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