Rising dollar and interest rates heap more pressure on Centro
Author: Carolyn Cummins
Date: 13/11/2009
Words: 263
Source: SMH
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Publication: Sydney Morning Herald
Section: Business
Page: 3
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REELING from class actions and regulatory investigations, Centro Properties warned yesterday of more hurdles for its underlying profits as a consequence of the strong dollar and rising interest rates.In a sales update for the three months to September 30, it said underlying profit for the 12 months to the end of next June is expected to fall about 45 per cent compared with the previous 12 months' figure of $229 million, after one-off charges. Distributions are also tipped to drop.Sales over the quarter rose by 4.5 per cent.Centro's outgoing chief executive, Glenn Rufrano, said the September quarter results reflected the general state of the Australian and US economies. "Centro's operations during the financial year ending 30 June 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 portfolio has maintained occupancy and rental growth. As expected, comparable income growth in the US declined due to [the] impact of the retailer bankruptcies that occurred during late 2008-early '09."The group's US operations continue to be affected by the weak economy, including retail sales trends.Centro was saved this year from the brink of receivership after its bankers agreed to deadline extensions over the repayment of its $6 billion-plus debt. But the company is also fighting off class actions and an Australian Securities and Investment Commission inquiry into eight past and two current directors over disclosures in its 2006-07 annual report.Mr Rufrano said yesterday that before any paying of debt, Centro expects net cash flow for the six months ending December 31 to be about $25 million.
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