Lending Association

Red ink in the property sector: Charter Hall reports losses

The red ink continues in the property trust sector, with Charter Hall Group (ASX:CHC) joining in with a very weak, loss-studded financial report for the December half-year on Wednesday. The company revealed a $416 million turnaround and plunge into losses.

The Group reported a statutory loss after tax attributable to stapled securityholders for the December 31 half of $190.0 million compared to a profit of $226.5 million for the December 2022 half-year.

Revenue fell 34% to $311.4 million for the latest half, from $473.1 million in the same period last year.

Operating earnings fell 18.7% to $195.1 million for the half-year to 31 December 2023, compared to $239.9 million for the half-year ended 31 December 2022.

But the company took a drop of $282 million ($39 million a year ago) in the fair value of property and investments.

The group reported a diluted loss per security of 39.3 cents, a long way from the 47 cents a share diluted earnings in the year-ago period. Charter Hall CEO, David Harrison, said in Wednesday’s ASX statement that the group has “continued the ongoing curation of the portfolios we manage, developing new assets and modernizing prime-located assets that meet the needs of today’s tenants while selectively divesting older, non-core assets which enhances returns.

“The commencement of construction for the $1.8 billion Chifley South Tower to create Australia’s premier $3.8 billion precinct, follows $3bn of development completions across office and industrial over the past 12 months, all demonstrating the active asset management of our Platform.”

Despite the red ink, Charter Hall lifted its returns slightly – interim dividend was set at 12.15 cents (up from 11.46 cents) and the interim distribution was set at 9.94 cents from 9.98 cents.

That made a total of 22.1 cents for the half, up from 21.84 cents.