Shopping giant Westfield has confirmed a slump in annual profit, but revealed its Australian arm has proved “highly resilient” amid tough trading conditions.
The group reported a net profit of $1.6 billion in 2013, down from $1.76 billion in 2012.
Annual revenue grew by seven per cent to $2.39 billion.
The figures translate to a dip of seven per cent in annual profit, which the company attributed to its sale of several US malls and the buyback of its own securities.
However, Westfield Group co-CEOs Peter Lowy and Steven Lowy said they are “pleased with the results for the year”.
Commenting on the full year outcome, they said the results reflect the solid performance of the portfolio with each market showing high productivity with growth in specialty sales and comparable net operating income.
The Australian component of the business fared particularly well, according to the group's CEOs.
WDC’s Australian portfolio achieved specialty sales productivity of $9,901 per square metre. Comparable specialty retail sales for the year were up 5.7 per cent in the United States, up 3.2 per cent in the United Kingdom, up 0.4 per cent in New Zealand and up 1.4 per cent in Australia.
“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. It is pleasing to note the improvement in retail sales growth with comparable specialty sales up thee per cent in the December quarter and up 4 per cent in January 2014,” Steven Lowy said.
In December 2013, WDC announced a restructure proposal to split the Group’s Australia/NZ business from its international business thereby creating two pre-eminent, separate and fully integrated retail property groups. As part of that proposal, WDC’s Australia/NZ business will merge with Westfield Retail Trust (WRT) to form Scentre Group. WDC’s international business will become Westfield Corporation. The proposal is subject to the approval of both WDC and WRT securityholders.
“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,” Peter Lowy said.
Westfield reported that the Australia/NZ business has also continued to make good progress on the $4.9 billion (Group share: $1.3billion) of current and future projects.
The $1.9 billion of current projects (Group share: $300m) includes Miranda in Sydney and Mt Gravatt in Brisbane. In early 2014, works commenced at Pacific Fair in Queensland, on behalf of AMP Capital.