This article is from the Australian Property Journal archive
BABCOCK & Brown Residential Land Partners has scraped through the first half year with a narrow profit, but the company has had to write down $24.4 million.
BLP reported a net profit after tax of $500,000 for the six months to December 2008, down from $2.9 million in the prior corresponding period.
BLP delivered a statutory net loss after tax of $19.4 million which includes write downs of $24.4 million. The non-cash adjustments reflect a $16.8 million write-down in loans receivable, an $8.3 million provision for the write-down in inventory and a $0.8 million profit on the sale of BLP’s 25% interest in Ascot Chase in August 2008.
The net tangible asset backing was 65 cents per stapled security – the 19 cents decline from the prior corresponding period reflects both asset sales and the write-down in inventory values given the deterioration in residential property markets over the period.
Managing director Michael Balkin said despite extremely difficult residential property market conditions continuing, revenue from the sale of land declined by only $0.5 million on the prior corresponding period to $16.5 million.
During the six months ended 31 December 2008, 333 lots settled with a further 79 lots settled across the portfolio in January 2009.
“While sales across a number of projects remained solid, buyers continue to be highly cautious given concerns over job security. This is despite the improvement in affordability due to interest rate cuts over the period. We anticipate it will take some time for residential property markets in Australia and New Zealand to recover in light of the ongoing pressures on buyer sentiment,” he added.
Balkin yesterday forecast underlying net profit after tax for FY09 to be materially lower than that of the prior corresponding period.
“BLP is not currently in a position to provide meaningful guidance to the market in relation to the extent of the variation for the 2009 financial year and will update the market in due course,” he added.
“We hope to be able to re-commence trading on the ASX shortly once these matters are resolved. While the balance of the 2009 financial year will continue to be extremely difficult, with little expectation of a sector wide recovery in buyer sentiment and residential property market conditions, it remains business as usual for BLP and we continue to focus on executing our core strategy in order to deliver operational performance across our projects,” he concluded.
Australian Property Journal
