Still in retailing and mall major, Westfield Group posted operational earnings of $1.03 billion in the first-half of 2010, the company told the ASX yesterday.
The group also reaffirmed its dividend forecast for 2010 at 64 cents per security after net profit totalled $961 million for the six months to June 30, compared to a loss of $708 million in the same period last year (driven by impairment write-downs).
It will make an interim distribution of 32c for each security held.
The company yesterday said that the reported earnings this half were affected by the 25% appreciation of the average Australian dollar exchange rate.
"Operational earnings were 2.6% lower than the prior corresponding period and up 1.6% on a currency adjusted basis.
"Operational EBIT was $1.384 billion, 5.4% lower than the prior corresponding period and up 4.8% on a currency adjusted basis.
"Included in the Group’s AIFRS (international accounting standards based) results were upward property revaluations of $400 million reflecting the growth in underlying property earnings and stabilisation in capitalisation rates across the portfolio."
Westfield said it was on track to post operational earnings of 90 cents a security for the full year ending December 31. That’s up 5% from earlier estimates.
Westfield’s securities rose 2.2% or 28c, to $12.58, wiping out the loss for the year so far and leaving them about square with what they were at the end of 2009.
"In the first half of the year we have seen improving performances from our United States, United Kingdom and New Zealand businesses and a continuation of the strong performance from our Australian business," Westfield Group managing directors, Peter Lowy and Steven Lowy said in yesterday’s statement.
Net property investment income in local currency rose 5.8% in Australian and New Zealand for the half year, 3.2% in the US and increased 15.6% in the UK.
Steven Lowy said total retail sales in Australia for the six months were flat on the previous corresponding period with comparable specialty retail sales 0.8% lower.
"Retail sales performance this half was in line with expectations given last year’s first half sales were strongly impacted by the one-off government stimulus payments," Mr Lowy said.
"For the 12 months, comparable specialty retail sales were up 0.5 per cent."
"Growth in the United States included the positive impact of redevelopments completed last year and improvements in occupancy levels.
"The United Kingdom result was driven by the strong performance from Westfield London, Europe’s largest urban shopping centre.
Portfolio occupancy at 30 June 2010 was 97.1%, up 20 basis points (0.20%) from March 2010 and up 90 basis points (0.90%) from June 2009.
"This reflects strong improvement in the United States at 92.9% leased, 250 basis points higher than June last year and now at its highest level since 2007; and a continuation of strong occupancy in Australia and New Zealand at over 99.5% leased and the United Kingdom at 98.8% leased.
"In the United States, specialty retail sales for the six months to June 2010 were up 7.6% with comparable specialty retail sales up 5.2%. This represents the first six consecutive months of sales growth in more than two and a half years," the company said.
"In New Zealand total retail sales for the six months were up 2.7% with comparable specialty sales up 0.4%.
"In the United Kingdom, industry statistics show comparable retail sales for the six months to June in London grew by 9.0% and were up 1.1% nationally. Westfield London, now in its second year of operation, continues to perform exceptionally well with total sales for this six months up 23.7% and up 16.8% on a comparable basis.
Westfield also said yesterday that it had signed a multiple site agreement with US cheap grocery chain, Costco Wholesale Corporation, under which Costco stores would be added at Westfield centres in three US markets.
Westfield said the new stores would be rolled out in Los Angeles, California; Sarasota, Florida and Wheaton, Maryland.
California and Florida are among the toughest retail markets at the moment because of the impact of the housing slump, subprime disaster and unemployment.
