Strong dollar creates challenges for Centro
Author: CAROLYN CUMMINS
Date: 13/11/2009
Words: 221
Source: AGE
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Publication: The Age
Section: Business
Page: 2
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CENTRO Properties, reeling from class actions and regulatory investigations, yesterday warned of more hurdles ahead for underlying profits, thanks to the strong Australian dollar and rising interest rates.In its sales update for the three months to September 30, the group said underlying profit for the year ending next June 30 was expected to reduce by about 45 per cent compared with underlying profit for the year ending June 30, 2009, of $229 million, after one-off charges.In terms of sales, the group's overall result was a rise of 4.5 per cent, boosted by specialty stores. Centro's shopping centres are primarily supermarkets and food stores.Centro's outgoing chief executive, Glenn Rufrano, said the September-quarter portfolio results reflected the overall performance of the Australian and US economies."Centro's operations during the financial year ending June 30, 2010, continue to be impacted by economic factors, including the significant appreciation of the Australian dollar and movements in interest rates," he said."The Australian managed portfolio has maintained occupancy and rental growth. As expected, comparable net operating income growth in the US declined during the quarter due to the realisation of the full impact of retailer bankruptcies that occurred during late 2008/early 2009."Overall operating metrics continue to be impacted by the US economy, including retail sales trends."Centro expects net cash flow for the six months ending December 31 to be about $25 million.
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