Kiwi Income posts first-half loss on property revaluation

The net loss was NZ$31.3 million ion the six months ended September 30, from a profit of $43.6 million a year earlier, the trust said in a statement today. Excluding the revaluation, which amounted to a 2.5% decline in the value of its properties, earnings were little changed at $28.8 million.

Given the volatility in global financial markets, it has opted to retain the $8.3 million gain it made on its investment in Capital Properties New Zealand and reduced the forecast full-year cash distribution to 8 cents a unit, less than previously forecast. The trust's units dropped 5.7% to $1, bringing their slide in the past 12 months to 23%.

"The underlying operating earnings from the property portfolio remain robust," said Sean Wareing, chairman of the trust's manager. The decline in the value of its portfolio is "testimony to the trust's defensive qualities."

Sales rose 6.8% to $89.3 million and rental income gained about 7% to $65 million, it said.

The trust plans to revalue its portfolio again as at March 31. "We do anticipate a continuation of the current softening trend in property values," Wareing said.

By Jonathan Underhill

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