Australian developer Multiplex reported a significant financial setback, posting a net after-tax loss of AU$219.5 million ($140 million) for the last calendar year, largely attributed to a AU$192.6 million ($125 million) write-off related to the Queen’s Wharf casino and resort project in Brisbane.
According to The Australian Financial Review, this loss marks a sharp increase from a previous loss of AU$34.6 million ($22 million), despite a 33 percent rise in revenue to AU$4 billion ($2.6 billion).
The financial troubles stem from complications with the Star Entertainment joint venture, which saw project costs balloon from AU$2.6 billion ($1.7 billion) to AU$3.6 billion ($2.3 billion), leaving the owners with AU$1.4 billion ($900 million) in debt. Ongoing disputes between Multiplex and Star led to a legal battle in Queensland’s Supreme Court, which was settled out of court.
A spokesperson for Multiplex cited various challenges, including COVID-19 impacts, inflation, adverse weather, and over 1,000 client-requested design changes, as contributing factors to the losses. Despite the setbacks, the company expressed pride in completing the complex project.
In March, Star Entertainment mitigated its financial issues by selling its 50 percent stake in the Queen’s Wharf project to partners Chow Tai Fook Enterprises and Far East Consortium, along with other assets. In a separate deal, Star recently agreed to transfer majority control of its operations to Bally’s Corporation for AU$300 million ($195 million).
Multiplex, owned by Brookfield Asset Management, highlighted its ability to manage large projects, though it faces challenges from rising costs and a declining construction market.
The company anticipates an improvement in conditions moving forward, supported by a diversified global portfolio. Overall, the construction industry is facing increased financial difficulties, with insolvencies rising 17 percent this year, reflecting broader economic challenges.
