PFI net profit up 16.7% before non-cash tax charge
Property for Industry reported a large bottom-line loss due to government tax changes but its distributable net profit rose 16.7% for the six months ended June 30.
The property trust had previously warned about the $35.5 million charge against profit resulting from it no longer being able to claim depreciation and that led to a $29 million bottom-line loss.
Excluding that non-cash charge, PFI posted a $9.2 million net profit, reflecting a 3.4% rise in rents collected from its nearly fully tenanted portfolio of buildings – occupancy at June 30 was 99.9% – and tax benefits.
PFI says on a normalised basis its result was up about 2.5%.
PFI, which is managed by AMP Capital Investors and is the only listed vehicle specialising in industrial property, says it has re-leased or extended leases on almost all space with leases expiring in 2010 and is making substantial progress on re-letting lease expiries in 2011 and beyond.
It has three development projects underway worth about $9 million and sold one property in North Harbour in the six months for $4.8 million, above its book value. Following that sale, the portfolio of 54 properties is valued at $360.9 million.
The first-half result compares with a $15.7 million loss in the same six months a year earlier which reflected a $20.9 million devaluation of PFI's portfolio. There was no change in valuation recorded in the latest result.
PFI units last traded at $1.14, unchanged from Friday, putting PFI's market capitalisation at $245.9 million. The tax charge meant the units' net tangible asset backing fell to 93 cents each from $1.10 at December 31, 2009.
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