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AMP NZ Office beats forecast earnings

AMP NZ Office beats forecast earnings, reiterates dour outlook for 2012

By Paul McBeth

Aug. 11 (BusinessDesk) – AMP NZ Office Ltd., the property investor that shed its trust structure last year, beat expected earnings and reiterated its downbeat outlook for the upcoming year.

The Wellington-based company made an operating profit of $61.1 million, or 6.13 cents a share, in the 12 months ended June 30, compared to a profit of $60.7 million, or 6.08 cents a share, a year earlier, it said in a statement. That was slightly ahead of Forsyth Barr’s forecast profit of $59.7 million.

AMP NZ Office reaffirmed its forecast earnings of between 5.1 cents a share and 5.4 cents a share for the 2012 financial year after losing two major bank tenants. It cut the 2012 guidance in March, taking the opportunity to blame the government’s decision to remove the ability to claim depreciation as a tax break on buildings and rising debt costs on the downgrade.

“While global economic conditions remain uncertain, ANZO’s balance sheet and recent portfolio improvements ensure it is well-positioned,” chief executive Scott Pritchard said. “The earnings outlook for ANZO highlights how property lags the general economy. That said, we are confidence that stability in earnings will return with the potential for growth form 2012-13 onwards.”

AMP NZ Office made a net profit of $10.4 million, turning around a loss of $49.6 million in 2010. Property investment entities typically shy away from the bottom line, which includes unrealised movements in the value of their portfolios. Revenue was flat at $137 million compared to $137.9 million in 2010.

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The value of the company’s portfolio fell to $1.25 billion as at June 30 from $1.28 billion a year earlier.

The shares were unchanged at 82 cents in trading today, and have gained 3.9% this year.

AMP NZ Office’s management achieved two performance fees of $956,475 and $1,010,895 after outperforming its listed peers in the final two quarters of the year. With the fee rebate of $741,756 from the corporatisation, that’s about $700,000 less than what the external manager was paid under the previous trust structure, the company said.


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