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Kiwi Income 1H pretax earnings fall 16% on drop in rents
Kiwi Income first-half pretax earnings fall 16% on drop in rental income
Nov. 14 (BusinessDesk) - Kiwi Income Property Trust, owner of Auckland’s Sylvia Park Shopping Centre, reported a 16 percent decline in pretax operating earnings in the first half as rental income fell, interest costs rose and it paid a performance fee to its manager.
Operating earnings fell to $34.7 million in the six months ended Sept. 30, from $41.2 million a year earlier. Net rental income declined to $68 million from $72 million. Net profit in the period was $26.6 million from $1.5 million a year earlier, when it took charges for property revaluations and impairments.
Kiwi Income is managed by Kiwi Income Properties, a unit of Australia’s Colonial First State Property. In the first half the manager reaped a $1.4 million “total return performance fee” because the trust’s performance exceeded a 10 percent hurdle. At the same time, the net interest expense rose by $1.3 million.
Units of Kiwi Income fell 0.9 percent to $1.165 on the NZX today and have gained 18 percent this year. It is rated a ‘hold’ based on the consensus of six recommendations compiled by Reuters.
During the period the trust sold Beca House in Auckland for $55 million and received insurance proceeds for the quake damaged PricewaterhouseCoopers Centre in Christchurch, using the proceeds of both to repay some $100 million of bank debt and reducing its bank debt gearing ratio to 32.3 percent.
“Whilst positive from a balance sheet perspective, the absence of rental income from Beca House and the PwC Centre has contributed to a lower operating result,” the trust said.
Mark Ford, chairman of the management company, said the outlook “is governed by the current moderate pace of economic recovery in New Zealand and we continue to see the need to remain cautious.”
Subject to a continuation of reasonable economic conditions, the projected year-end distribution to unit holders was affirmed at 6.6 cents a unit.
(BusinessDesk)
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