Dexus Property ups full-year earnings guidance
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Dexus Property Group (ASX: DXS) has announced a 10.4 per cent rise in underlying funds from operations (FFO)--a preferred measure of underlying performance among real estate investment trusts--to $287.7 million for the first half of fiscal 2017, while also upgrading earnings guidance for the full year.
Australia's biggest office landlord said it expects growth in underlying FFO per security of around 4 per cent in fiscal 2017, up from 3.0-3.5 per cent previously.
Full-year distributions will be paid in line with free cash flow, delivering distribution per security growth of 3.5-4.5 per cent for the 12 months ending 30 June 2017, Dexus said in a statement to the ASX on Wednesday.
For first half of fiscal 2017, Dexus said statutory net profit after tax stood at $716.0 million, down 10 per cent, a result of lower revaluations and lower trading profits.
The company said it increased net tangible assets (NTA) per security by 6.9 per cent or 52 cents from 30 June 2016 to $8.05 at 31 December 2016.
The management expense ratio--Dexus' management costs divided by funds under management--improved in the half, falling 4 basis points from the previous corresponding period to 36 basis points.
Dexus declared a distribution per security of 21.71 cents for the six months ended 31 December 2016, down 5.8 per cent on the previous corresponding period.
The distribution will be paid to security holders on Tuesday, 28 February 2017.
Commenting on the results, Dexus CEO Darren Steinberg said income growth from leasing activity and development completions during fiscal 2016 helped to offset the impact of recent asset sales, which helped drive a "solid underlying result".
"While geopolitical uncertainty is expected to continue to influence business confidence in domestic and international markets throughout the year, Dexus is well positioned to deliver strong results for the 2017 financial year," he said.
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Nicholas Grove is a Morningstar journalist.
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