Lend Lease shares have fallen, despite the construction giant posting a 39 per cent jump in net profit, with investors sceptical about its growth prospects.
The company reported a net profit of $302.3 million for its first half to December 31, up from $217.8 million during the same period in 2011.
Its Australian business delivered the bulk of the profit growth, as early commercial agreements and financing were brokered for Lend Lease's Barangaroo South project on Sydney Harbour.
Lend Lease's local business posted a profit of $304 million, up from $207 million in the previous corresponding period.
But investors were sceptical if the growth would continue, with Lend Lease's share price almost five per cent weaker during the final hour of trade despite the overall local market firming.
Lend Lease Group closed 27 cents, or 2.53 per cent weaker, at $10.42 on Monday.
Chief executive Steve McCann said that the company had been reshaped to generate the majority of its earnings in Australia.
"The Australian economy is facing its challenges but it remains an economy that's strong on a relative basis," he said.
McCann said the company was in a strong position, with a project pipeline worth about $21.4 billion.
Major financial companies have signed office tenant agreements at Barangaroo, where Lend Lease has agreed to develop a six-star, high-rollers casino and hotel for James Packer's Crown group.
Lend Lease expects financial closure on the $6 billion project by late 2013, with Mr McCann forecasting "good visibility of earnings" during that period.
Mr McCann said Lend Lease expected engineering and construction activity to peak during the coming two years "as major project investment continues to slow".
"The commercial construction sector remains challenging with activity levels expected to remain subdued," Mr McCann told a shareholder briefing in Melbourne.
"However, our project management and construction business is well placed, with a strong pipeline of internal development and social infrastructure work."
Major projects in Sydney, Brisbane and London were expected to underpin construction earnings from 2015, with Melbourne's $4.5 billion Docklands project to become financially viable this year.
Morningstar property analyst Tony Sherlock said Lend Lease would be unlikely to continue posting strong construction earnings as space dried up in Australia's big cities for major urban renewal projects.
"They've had an exceptionally good win rate in the last two years but I don't think that win rate is sustainable in the long term," he told AAP.
"There's not another Docklands in Melbourne, there's not another Barangaroo in Sydney."
Lend Lease reported that residential market conditions were still soft because of weak consumer confidence and concerns about job security.
The NSW and West Australian markets were regarded as the strongest, with Queensland starting to show small signs of recovery.
Lend Lease declared an unfranked interim distribution of 22 cents.
It also said it had altered its remuneration structure for Mr McCann to limit the cash component of any short-term incentives to $800,000.