Redefine Properties Decrease in first half results
South African group Redefine Properties on Monday announced a 62.7% drop in total half-year profits, due to asset sales and further rent relief to financially troubled tenants, and said it could pay a dividend.
The owner of retail, office and industrial properties said net earnings per share, the main measure of profit in South Africa, fell to 8.45 cents in the six months ended February 28, down from 22.63 cents a year earlier.
During the period, the total relief granted to its tenants was 107.3 million rand ($ 7.58 million), made up of lease discounts of 81.5 million rand and payments. in deferred rents of R25.8 million, Redefine said.
The group’s retail tenants, especially travel agents and cinemas, have been hit the hardest, with hairdressers and beauty salons still struggling to recover, he said.
Redefining assets sold for R4 billion and deconsolidating its European Logistics Investment BV (ELI), which also contributed to the 30.8% drop in total revenue to R3.3 billion.
Asset sales, however, have helped the Diversified Real Estate Investment Trust (REIT) reduce its debt level or loan-to-value ratio (LTV), which measures the ratio of a company’s debt to its assets, from 3.6% to 44.3%, well in restrictive covenants.
The main goal of Redefine and other REITs has been to preserve liquidity and lower LTV ratios. Redefine wants to reduce it further to less than 40%.
Lower income reduced distributable earnings per share, which reflects the share of income paid to shareholders, by 21.8%.
Redefine said that subject to the liquidity and solvency test at the time of the dividend declaration, it is anticipated that it should be able to pay a dividend for fiscal 2021.
On Friday, he postponed a decision on an interim payment until the annual results were released in November.