NZ’s Fletcher Building (ASX:FBU) experienced its largest intraday percentage drop since October 28th, 1997.

The building materials manufacturing giant on Friday refuted the allegations of faulty pipes, attributing the damages reported in several residences in Western Australia to poor installation methods rather than a defect in the production of the pipes it delivered.

The company’s analysis of the current evidence reveals that the cost for rectifying the malfunctioning Perth homes could oscillate between NZ$50 million and NZ$100 million.

Citi analysts emphasize that key factors investors should turn their attention towards are the labor constraints and prevalent availability of rental housing.

The brokerage conservatively projects outflows not exceeding NZ$50 million annually, for a maximum of five years.

Fletcher Building’s shares plummeted to their lowest level since November 2nd, 2020.

Despite this, FBU’s stock has still realized a gain of 3.4% year-to-date, based on the last closing.

Fletcher Building is a leading construction materials manufacturer in New Zealand.