Developer Australand Property Group (ALZ) has reaffirmed its earnings guidance for calendar 2008, despite challenging conditions in the property sector and volatile credit markets.
Australand has forecast growth in operating earnings per stapled security of between 2% to 3% per year.
In the group’s annual general meeting held today, Australand managing director and chief executive officer Robert Johnston addressed the market conditions and the company’s strategy to capital management.
“The recent credit crunch and reduced liquidity in the market has heightened the level of focus on debt from investors and analysts, and in particular look through gearing,”
“The availability of credit has heightened and associated costs have increased significantly as risk is re-priced.
“While Australand has no direct exposure to the US sub-prime mortgage crisis, there is no doubt that the operating environment has become more challenging with increased financing costs and weaker business and consumer sentiment,” he added.
Johnston said the company had no major debt facilities that needed to be renewed in 2008 and had undrawn facilities of $170 million at the end of 2007.
The group reported an operating profit after tax of $163.2 million, an increase of 5% on the prior year.
The Commercial and Industrial business delivered an outstanding result with an operating profit before tax of $70.1 million, up 75% on the 2006 result.
The Investment Property business also performed strongly, achieving a profit after tax of $106.7 million, representing an 11% increase on the prior year.
Earnings per stapled security increased 2% from 17.3 cents to 17.6 cents.
The group said it plans to expand into the Asian market as one of its growth strategies as well as growing its funds under management.
Shares in AZL gained 5 cents to $1.64.
