Westfield under-delivers for Unibail-Rodamco
Retail behemoth Unibail-Rodamco, which completed a historic takeover of Sir Frank Lowy’s retail empire last year, has lowered its guidance for 2019 after weaker than expected earnings from its Westfield portfolio.
The group delivered 2019 guidance that was 8 per cent below the 2018 financial year, sending its shares down 10 per cent, the most on record, on the ASX.
Unibail-Rodamco trades on the Paris and Amsterdam exchanges with a secondary listing in Australia. Chief executive Christophe Culliver said he remained committed to the Australian listing as “long as it makes sense”.
The group said it faced a weaker than anticipated contribution from its Westfield malls in Britain and the US, particularly its regional portfolio, amid tougher than expected retail conditions.
It also blamed the new guidance on higher financial expenses and taxes, and delays in projects which had affected the timing of income, saying it would review several development projects.
“In all, this is estimated to have an impact of approximately minus 50 cents on 2019 AREPS [adjusted recurring earnings per stapled share],” the company said.
“However, despite the challenging retail environment, the strong underlying operating income growth for Unibail-Rodamco-Westfield of between 4 and 5 per cent in 2019 is expected to offset this impact.”
“As a result, the 2019 AREPS is expected to be in the range of €11.80-€12.00,” it said.
Mr Culliver said the weaker Westfield earning were not a “disappointment.”
“It's an unexpected, more difficult market,” he said.
The group has had a busy period bedding down the Westfield takeover and was concentrating capital on its flagship malls because they offered the “highest return,” he said.
Over the next two years it will sell almost €4 billion of European assets to reduce its leverage to between 30-40 per cent.