This article is from the Australian Property Journal archive
CENTRO Retail Trust has returned to profit thanks to a slowdown in property devaluations and favourable foreign exchange movements.
CER yesterday notched up a net profit after of $197 million for the first half year ended December 2009 compared to the $2 billion loss posted in the previous period.
The result included a $242 million write down in property values (compared $760 million in the previous corresponding period); a $273 million gain in foreign exchange movements (loss of $1.12 billion in the pcp; and no impairments relating to any joint venture vehicles (loss of $230 million in the pcp).
However, the underlying profit fell to $81 million from $89 million, inline with revenue which decreased from $311 million to $244 million.
Outgoing CEO Glenn Rufrano said the fall in underlying profit was due to the ongoing difficult US economic conditions and the impact of the stronger Australian dollar against the greenback.
CER’s net assets attributable now total $809 million, up from $685 million at June 2009. Accordingly, this has also increased the reported NTA to 35 cents per security as at December 31 2009, an increase of 5 cents from June 30 2009.
But NTA is 50% below December 2008 which was 72 cents.
CER’s Australian real estate portfolio was revalued $1.6 billion down from $1.7 billion and retail sales growth decreased from 5.5% to 3.5%. However comparable NOI growth was strong at 2.6% from 1.7%. Occupancy rates remained stable at 99.7%.
The US portfolio was less resilient, the comparable portfolio value fell from $5.7 billion to $4.5 billion and NOI growth worsened, previously -3.1% to -5.8%. Vacancy rates also increased, pushing occupancy rates lower at 90.3% compared to 92.6%.
Centro US CEO Michael Carroll said recovery in the US is anticipated to be bumpy and slow.
“But we are seeing modest improvements particularly compared to the operating environment of 12 months ago where we witnessed an unprecedented number of retailer liquidations in bankruptcy.
“Retail conditions are still difficult but are showing early signs of stabilising. As sales trends improve and as retailers gain more confidence in the future, they are shifting their focus from survival to longer-term growth. And while it is expected to take time before retailers meaningfully grow square footage, we are starting to see a change in demand from certain retailers,” he concluded.
Australian Property Journal
