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Westfield Profits Slump 6.7%

Westfield Profits Slump 6.7%

Westfield Group (WDC) today announced full year declining profits of $1.6bn to 31 December 2013.

The figure was 6.7% below FY 2012 but revenues rose 7.4% to $2.3bn for FY13.  

Funds from Operations (FFO) rose to $1.44bn. FFO per security was 66.5 cents, up 2.3% on the prior year and included the impact of asset divestments. 

Westfield shopping centres which houses major retailers including JB HiFi and Dick Smith said its Australian portfolio achieved specialty sales of $9,901 per square metre.

Comparable specialty retail sales for the year rose 1.4% in Australia and 0.4% in New Zealand, although rose far higher internationally – up 5.7% in the US centres and 3.2% in the UK. 

Westfield’s Australian business has proved resilient, with improvement in retail sales growth with comparable specialty sales up 3% in the December quarter and up 4% in January 2014, said Co-Ceo Steven Lowy. 

“Our Australian business and platform has proved highly resilient, due to the high quality of the portfolio with excellent sales productivity, almost full occupancy and continued growth in average rents and net property income. 

“We see the key trends of the expansion of luxury and high street brands, together with the integration of food, fashion and entertainment experiences, combined with the greater use of digital technology will be brought together in our existing centres and future redevelopments,” he said.
Comparable property net operating income rose 2% in Australia (+4.7% US, +4.3% UK).

Westfield Co-CEOs, Peter Lowy and Steven Lowy AM said: “We are pleased with the results for the year which reflect the solid performance of the portfolio with each market showing high productivity with growth in specialty sales and comparable net operating income. 

“During the year we successfully continued the strategic repositioning of the Group by divesting non-core assets, introducing further joint ventures, investing in our development activity and announcing the acquisition of the remaining 50% interest in the Westfield World Trade Center in New York. 

“Our business is in a strong position in each of the markets we operate.”
In December, WDC announced a split with the Group’s Australia/NZ business from its international business creating two retail property groups. 

“WDC’s international business and its Australian/NZ business have both grown in scale and quality to the stage where they can now stand on their own. We believe that the restructure positions the new entities for better growth and thereby provides security holders of both WDC and WRT with better long term returns,” Peter Lowy said.

Westfield’s total net property income for the year was $2bn, consistent with the prior year. Adjusting for the asset divestments, net property income increased 8%.

Management fee income for the 12 months increased by 9% to $140m.

Management predict FY14 operating income to rise 2%-2.5% in Australia.