By David Winning


SYDNEY--Scentre said its annual profit fell by 42% on a steep drop in the value of its property portfolio, but it is anticipating another year of earnings growth despite elevated interest rates casting a pall over the Australian consumer and pushing up its debt costs.

Scentre, which owns and operates nearly 40 Westfield branded shopping centers, reported a net profit of 174.9 million Australian dollars (US$114.3 million) for the 12 months through December, down from A$300.6 million in the prior fiscal year. The result reflected a property valuation decline of A$1.02 billion.

Funds from operations--a smoothed measure of operating cash flow that excludes depreciation, amortization and gains on asset sales--rose by 5.2% to A$1.09 billion across the year. On a per security basis, Scentre's funds from operations were 21.11 cents. Some analysts had expected Scentre to report funds from operations at the top end of guidance of 20.75-21.25 cents after the mall owner's final dividend beat expectations.

Scentre said it expects funds from operations to be between 21.75 Australian cents and 22.25 cents per security in 2024. If achieved, that would represent growth of between 3.0% and 5.4% on the result for 2023.

Management also forecast an annual distribution of a minimum 17.2 Australian cents per security in 2024, which would be at least 3.6% higher than the 16.60 cent payout in 2023.


Write to David Winning at david.winning@wsj.com


(END) Dow Jones Newswires

02-20-24 1702ET