The slump in property development and not the sluggish home building sector took its toll on the Singapore-controlled developer Australand yesterday which revealed a 15% slide in 2011 earnings.
The company yesterday reported a net profit of $140.6 million for the year to December 31, down from $165.8 million in 2010.
Revenue was also down, off 8% at $692.8 million.
The company said earnings were hit by the costs of revaluing seven development projects in Queensland, and a $24.2 million loss on interest rate derivatives.
The company said that while it was hoping to lift earnings in 2012 that depended on improvements in business and consumer confidence.
It described the domestic economy as soft, with the exception of the resources sector, and said conditions would remain challenging for at least the first half of 2012.
"Despite the near-term challenges, the group remains cautiously optimistic and is budgeting for an increase in operating earnings per security for 2012," Australand said in a statement yesterday.
The company said it planned to update investors on its profit outlook when it reports its first-half earnings results, in early August, when it would have more details on sales transactions and general trading conditions.
It said the investment property division was providing reliable earnings which would underpin an expected 2012 unfranked distribution of 21.5c per stapled security, in line with 2011.
Australand declared a final dividend distribution of 11c per stapled security for the second half of the year, bringing the total for 2011 to 21.5c.
CEO Bob Johnston said residential sales volumes rose 15% in 2011 compared to 2010, with the value of contracts on hand by the end of the year up by a similar amount.
The property market had been challenging in 2011 because of global and domestic uncertainty, leading to a lack of business and consumer confidence, he added.
"Despite some near-term challenges, we expect the strength of the resources sector will, in time, have a positive impact on the broader economy and sentiment, supporting solid employment, continued population growth and renewed demand," he said.
The group’s investment property division lifted earnings before interest and tax (EBIT) to $165.5 million, from $161.4 million, while the commercial and industrial division’s earnings eased to $29.1 million, from $31.7 million.
Residential EBIT rose to $76.1 million, from $67.6 million.
Australand’s securities rose 4c higher at $2.67.
The much larger rival property group, Stockland, is due to release its interim earnings later today.
Gloves and condoms maker Ansell is another company hoping for better times in 2012. After reporting a very modest 1.1% rise in interim net profit, the company maintained guidance and said it expects to make up lost ground in the rest of the June half year.
Ansell said net profit was $64.9 million in the six months to December 31, 2011, up from $64.2 million in the previous corresponding period.
Ansell said the economic outlook was mixed with a recovering US economy and strong Asia Pacific expected to offset a weaker European economy and euro.
"The benefit of lower input costs should also flow through in the second half," the company said in a statement yesterday.
Ansell said it expected to continue to recover lost ground in relation to the implementation of its enterprise resource plan (ERP) during the second half and to continue its global rollout in fiscal 2013.
The small rise in first half earnings followed a near 4% drop in revenue for the December 2011 half year to $597.7 million, from $621.8 million previously.
Backing its optimism Ansell increased its interim, unfranked, dividend by one cent to 15c.
Ansell chairman Peter Barnes said he was pleased with the continued strong growth in emerging markets and the company’s sexual wellness business.
"This was, however, partly offset by a difficult first phase of Ansell’s global ERP implementation in the Americas and by a deteriorating economic situation in parts of Europe, testing Ansell’s management team in the first half of fiscal 2012," he said.
"The results however, have been solid," he said in the statement.
And in contrast to the weak results from Ansell and Australand, online travel booking service Webjet had a very solid first half performance, thanks to the continuing rise in people taking advantage of the strong Australian dollar and travelling offshore.
The company yesterday revealed a 17% rise in half-year profit to $5.9 million, compared with $5 million a year earlier.
Revenue rose 35% to $29 million in the six months.
Shares in Webjet were unchanged at $2.58, just below a two-year hit peak last week.
The company said the main reasons for the sales and profit rise a 29% increase in total transaction value – the price at which travel products and services are sold – to $369 million and a slight improvement in profit margins- up 0.3% to 7.9%.
Webjet has also stuck to earlier guidance of at least a 10% rise in profits for the full year. Last financial year it posted a net profit of $11 million.
The company will pay a fully franked dividend of 6c a share on April 12.
