Some misleading reports on the half year profit performance of Singapore -controlled property group, Australand, as some stories failed to look at the interim accounts as accurately as they should have.
On one measure, some report said Australand posted half-year net profit up 127%, which it did.
But that included a property revaluation of nearly $11.8 million in the June half, against losses from property write-downs and impairments of a gross $328 million (net $268.8 million) in the first half of 2009 as the company recovered from the credit crunch.
But operating profit after tax edged up a mere $450,000, to $60.430 million from $59.980 million in the first half of 2009.
Revenue of $281.507 million was down 10% on the first half of 2009, which was probably as good a guide as any to the company’s fortunes in the June half of this year.
Australand’s stapled securities rose 2c to $2.60.
The company declared a half year distribution of 10 cents per security, unfranked, and foreshadowed another 10.5c payout with its full year results.
"The fundamentals for the residential, commercial and industrial sectors remain positive, and the Group is well positioned to achieve its 2010 earnings guidance and deliver growth in 2011," Australand said in a statement.
It said it expects group operating profit in 2010 to be similar to that achieved in 2009.
"We remain optimistic that development activity in the commercial and industrial division will strengthen during the second half of 2010, leading to growth in 2011," the company said in the statement.
The residential division full year earnings before interest and tax (EBIT) contribution was expected to be in line with 2009.
Valuations for quality assets have stabilised and investment property earnings are expected to grow steadily, underpinned by embedded rental growth and the delivery of new assets from the group’s internal development pipeline.
"The progressive reduction in impaired and low margin inventory and the commencement of several large new projects will underpin earnings growth and momentum in 2011," the company said.
The investment property division posted an EBIT of $82.6 million, excluding revaluation gains, comparable rental growth of approximately 3.4 per cent and occupancy of more than 99 per cent with a weighted average lease expiry of 5.4 years.
"Our portfolio metrics remain strong, with high occupancy, long leases and fixed rental growth supporting the predictable nature of the division’s earnings," the company said.
"We are pleased to see values for high quality assets stabilising with a small revaluation gain recorded in the half."
The commercial and industrial division EBIT was $10.9 million, with residential EBIT of $23.7 million.
Mr Johnston said the residential division delivered an improved operating result over the prior corresponding period, with the majority of activity in the Melbourne and Sydney markets.
"Our development activities are responding to improving economic conditions," he said.
"The commercial and industrial divisions forward workload has increased substantially since the end of 2009, and enquiry levels are continuing to improve."
Australand says it is on track to reach its strategic objectives outlined in early 2010 of between 60 and 70 per cent of group EBIT from recurrent earnings.
Recurrent earnings comprised 79% of group EBIT in the June half, with a similar outcome for the full year.
