This article is from the Australian Property Journal archive
GPT has delivered a $3.25 billion loss for the 12 months to December 31 2008 after the group wrote down around $1.75 billion from the value of its non core properties.
The AIFRS loss also included a loss of $393.5 million in the value of GPT’s Australian core assets and $839 million mark to market of derivative positions.
The reduction in GPT’s total assets to $13 billion at December 2008 resulted in net tangible assets per stapled security fell to $1.43.
GPT announced an operating income of $468.8 million down 23% from $468.8 million in the previous year. GPT will pay a cash distribution of 17.7 cents per security for the year.
Acting chief executive Michael O’Brien said 2008 was a challenging year throughout and the group made a number of difficult decisions which he added, over time, will return GPT to a position of strength and stability.
In October 2008 GPT raised $1.6 billion which were used to reduce debt, resulting in net debt of $4.1 billion at December 2008 and gearing of 33.7%. Look-through gearing also fell to 46.6% which is well below the group’s 55% covenant.
O’Brien said the group is continuing focus on non core asset sales. Investments outside the core business represent approximately 20% of the group’s real estate investments and contributed 21% of realised operating income in the period.
“While GPT intends to exit the majority of these investments in the short to medium term, market transaction levels remain extremely low.
“GPT is realistic about values and remains committed to the sale of the Hotel/Tourism Portfolio and a number of non core retail assets, recognising however that this process will take longer in today’s environment than in normal market circumstances,” he continued.
O’Brien added that the current focus for the Joint Venture with Babcock & Brown is completing the transition of the asset management function to GPT, and ensuring the assets are managed through to an appropriate medium term exit.
GPT has not included income from the Joint Venture in its 2009 guidance and wrote down the value of its investment in the Joint Venture to $1.16 billion at December 2008, as a result of reduced asset values.
Since July 2008 significant cost efficiencies were achieved with a reduction in employees for the GPT Halverton business of approximately 35%. In aggregate, GPT reduced its employee numbers by 15%.
Looking ahead, O’Brien forecast a distribution of 7.2 cps.
Australian Property Journal
