NEPI ROCKCASTLE EARNINGS LIKELY TO DROP BY 32%

NEPI ROCKCASTLE, leading owner of shopping centres in central and eastern Europe, said distributable earnings would likely fall 32 percent or by about €0.094 (R1.93) for the six months to end June on the impact of the Covid-19 pandemic on its operations. Listed shopping centre landlords the world over have seen profits fall this year as they struggled to receive rents from tenants that were forced to close as part of government Covid-19 lockdown measures. Nepi Rockcastle’s share price fell 2.15 percent to R88.21 on the JSE yesterday, broadly in line with the SA Listed Property Index which was down 0.66 percent at the same time. In the 2019 first half, the group reported distributable earnings of €0.292 per share, and distributed 100 percent of its dividend, derived from centres in countries such as Poland, Slovakia, Serbia, Czech Republic, Hungary, Romania and Lithuania. However, a decision on the current interim dividend would only be taken at the board meeting scheduled for Thursday, given the ongoing uncertainty about the pandemic, a trading statement said. The earnings guidance for the full 2020 financial year was already withdrawn earlier this year. Nepi Rockastle said government restrictrictions had since been eased in the countries where it operates, and most tenants were operational as of yesterday, with only 4 percent of gross lettable area still subject to temporary closure restrictions. “Footfall and tenants’ sales are gradually recovering,” the directors said. The decline in distributable earnings reflected the effects on the group of government concessions during the lock-down that was imposed by Polish authorities, and concessions with tenants, based on negotiations, granted as a partial forgiveness of contractual receivables. Nepi Rockcastle’s interim results are expected to be published on Friday. The group also announced earlier this month that the sale of its Romanian office portfolio for €290 million (R5.95 billion) cash to AFI Europe would go ahead, following arbitration proceedings about a possible breach of the sale agreement. The transaction with AFI Europe was announced in December, and the sale price remained unchanged after the arbitration. As of March 31, group liquidity was strong, with €590m available in cash and undrawn credit facilities. The gearing ratio was also low at 32 percent, below the 35 percent target. |