Westfield Group has achieved solid earnings for the half year to 30 June, with operational earnings of more than $1 billion.
The shopping centre operator announced its half year results today, with operational EBIT of $1.446 billion, up 18.1 per cent on the prior year or 6.3 per cent on a constant currency basis. Operational earnings were $1.040 billion, up 12.1 per cent on the prior period and 8.3 per cent on a constant currency basis.
The group’s statutory result for the half year, under IFRS, was $708 million and included non-cash mark to market gains on financial instruments of $932 million and asset revaluations of $2.9 billion, the latter principally due to an increase in capitalisation rates.
“The group continued to deliver solid underlying earnings for the half year,” said Westfield Group managing directors, Peter Lowy and Steven Lowy.
“The Australian portfolio is performing above our expectations while conditions are stabilising, albeit at lower levels, in the more challenging environments in the United States, the United Kingdom and New Zealand.”
For the half year, comparable shopping centre net operating income for the portfolio grew by three per cent, with the Australian and New Zealand portfolio growing by 6.2 per cent and in the US and the UK portfolios declining by 0.6 per cent and 4.1 per cent, respectively.
Portfolio occupancy at 30 June 2009 was 96.2 per cent, up 0.2 per cent from the March 2009 quarter. This was driven by a 30 basis point improvement in the US portfolio to 90.4 per cent leased, a 70 basis point improvement in the UK portfolio to 97.3 per cent and a continuation of strong occupancy in the Australian and New Zealand portfolios at in excess of 99.5 per cent leased.
For the six months to 30 June 2009, comparable specialty retail sales for the Group’s centres in Australia grew by 5.1 per cent; in New Zealand down by 0.2 per cent and the US declined by 6.2 per cent. In the UK, industry statistics show retail sales in London grew by 4.8 per cent and were up 0.5 per cent nationally.
There are currently five projects under construction at a forecast investment of $4.2 billion, principally the Sydney City project and Stratford in London. To date $1.9 billion has been spent on these projects with the balance of $2.3 billion to be incurred over the next three years.
“Our development activity remains concentrated in the Sydney CBD and Stratford, the gateway to the London 2012 Olympics. These two projects are of the highest quality and are expected to create significant long-term value,” said Steven Lowy.
“Redevelopment remains a major component of our long term value creation activity and we will continue to invest in the predevelopment of our high quality opportunities in order to be in a position to commence these projects when conditions are appropriate.”