After boosting earnings 28% in the year to December 2012, Australand Property Group (ALZ) found the going much tougher in the six months ending June 30.
That was due to the sluggish trading conditions in the company’s residential business, a problem that has already been reported by competitors, Mirvac and Stockland.
In fact the Singapore-controlled property group yesterday reported a dip of 1.4% in statutory net profit for the first half of its 2013 financial year.
The company’s net profit fell to $88.4 million in the six months to June, down 1.4% from $89.7 million earned for first half of the 2012 year.
Operating profit after tax was also lower, down 8.5% to $62.4 million from $68.2 million. (The company’s operating profit for all of 2012 jumped 28% to $180 million.)
Managing director Bob Johnston said a weaker contribution from the residential division caused the drop in profits during the six months to June, but the group was confident of a turnaround in the second half of calendar 2013 as projects were completed.
‘‘Despite business and consumer confidence continuing to be fragile, residential sales activity strengthened during the first half, with contracts on hand up 36 per cent,’’ he said in a statement yesterday.
Australand said the group is expecting market conditions ‘‘to remain challenging’’ for the rest of the year, but still sees 3% to 4% growth in operating earnings as residential contracts are signed in the second half of 2013, the investment property porfolio delivers fixed rental income increases and third-party projects are completed in the commercial and industrial division.
The company has already revealed an unchanged interim distribution of 10.5c a unit (from earnings per security of 10.8c) and plans to pay a steady final final of 11c per unit, making an unchanged 21.5c for 2013.
The units eased 3c to $3.47 yesterday.
ALZ YTD – Profits dip by 1.4%
