Goodman Upgrades Annual Earnings Guidance After 1st Half Operating Profit Jumps 29%
By David Winning
SYDNEY--Goodman Group upgraded its annual earnings guidance after its first-half operating profit rose by 29%, illustrating how demand for industrial property has stayed robust despite the slowdown in economic activity world-wide.
Goodman, which owns a property portfolio in countries spanning the U.S. to Australia, said it now expects to grow operating earnings per security by 11% in the 12 months through June. That represents an improvement on a prior forecast for 9% growth.
Management stuck with earlier guidance for an annual distribution of 30.0 Australian cents (US$0.19) per security, as it navigates an uncertain economic environment. Goodman has typically been among the most cautious companies with regard to capital, even as it selectively advances new developments and seizes opportunities to expand its land bank.
Goodman's outlook was provided alongside a net loss of A$220.1 million in the six months through June. Its operating profit was A$1.13 billion.
"Revaluations saw a reduction in property values of A$3.4 billion across the group and partnerships," Goodman said. "The sharp increase in long-term government bond yields had an adverse impact on the global cost of capital for all asset classes and was the main factor contributing to the increase in cap rates in our portfolio, partly offset by market rental growth."
Write to David Winning at david.winning@wsj.com
(END) Dow Jones Newswires
February 14, 2024 16:51 ET (21:51 GMT)
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