Westfield Records US$2.32 Billion Profit as Shoppers Spend More -- Update
24 Febbraio 2016 - 2:06AM
Dow Jones News
By Rebecca Thurlow
SYDNEY--Westfield Corp. (WFD.AU) reported a net profit of
US$2.32 billion in its first full year following the break up of
billionaire Frank Lowy's global shopping mall empire, as the
company bets on glitzy new shopping mall developments to boost
earnings.
Sydney-based Westfield spun off its Australian and New Zealand
malls into a separate company called Scentre Group (SCG.AU) in
2014. The company was left with 40 shopping malls, mainly in the
U.S. Last year it sold six American shopping centers for US$1.3
billion to concentrate on new developments in prime locations such
as the new World Trade Center mall in New York that promise higher
returns for investors.
"We are well on our way in executing our strategy to create and
operate flagship assets in leading markets that deliver great
experiences for retailers and consumers," said Westfield's co-chief
executive officers Peter Lowy and Steven Lowy in a statement.
Westfield has been ramping up its international expansion since
the demerger. In August 2014, it raised its stake in a €1.4 billion
(US$1.5 billion) shopping-mall project in Milan, Italy, to 75% from
50% in a push to expand outside the U.S. and Britain. The project
is expected to start construction between 2017 and 2018.
Westfield has a US$10.5 billion pipeline of current and future
developments, with projects under construction including a US$800
million redevelopment of its Century City mall in Los Angeles, an
expansion of its Westfield UTC mall in San Diego and a 600 million
British pound (US$841 million) extension of Westfield London. New
York's World Trade Center mall is now fully leased and is scheduled
to open in August.
Late last year, it completed construction of a new open-air
shopping village at Topanga, Los Angeles and a new shopping center
in Bradford in the U.K. An expansion at its Valley Fair mall in
Silicon Valley is expected to start this year and construction of a
new shopping center at Croydon in South London is scheduled to kick
off by the end of 2018.
The restructured company, which has a market value of 20 billion
Australian dollars (US$14 billion) expects funds from operations, a
measure of underlying earnings that strips out depreciation,
amortization and gains on asset sales, to fall to between 34.2 US
cents and 34.5 US cents a share this year from 37.7 US cents in
2015, because of lost revenue from the recently divested malls and
lost income as Century City mall is revamped. However, Westfield
said the guidance represents 3-4% growth in pro forma terms.
Distributions to shareholders are forecast to be flat at 25.1 US
cents per security this year.
The latest result included US$632 million of asset revaluation
and was helped by shoppers spending more at its U.S. and U.K.
malls. Specialty store sales--which, unlike department stores focus
on a single product range like clothing or electronics--rose by
6.4% to US$726 million.
Morningstar analyst Tony Sherlock said in a research note ahead
of the result that Westfield's tenants are facing pressure from
online competitors. That's prompting the mall operator to
reposition its portfolio to focus on high-end retail stores less
likely to be affected by online retailing, he said.
-Write to Rebecca Thurlow at rebecca.thurlow@wsj.com
(END) Dow Jones Newswires
February 23, 2016 19:51 ET (00:51 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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