By David Winning

SYDNEY--Scentre Group returned to a half-year profit, and maintained its annual distribution guidance on the assumption that Covid-19 restrictions substantially ease by the end of October.

Scentre, which owns and operates nearly 40 Westfield branded shopping centers, reported a net profit of 400.4 million Australian dollars (US$285.8 million) in the six months through June. That compared to a A$3.61 billion loss at the same stage of the previous year when Scentre absorbed a steep fall in the valuation of its property portfolio.

Funds from operations--a smoothed measure of operating cash flow that excludes depreciation, amortization and gains on asset sales--rose by 28% to A$463.4 million in the six-month period.

Scentre said it still anticipated paying an annual distribution of 14 Australian cents per security, having recently declared a first-half payout of 7 Australian cents.

Still, it said the payout forecast depended on lockdowns in major cities including Sydney and Melbourne easing within months. The restrictions have forced non-essential retailers again to close their doors and shift to a click-and-collect business model.

"We have delivered strong operating performance even with a number of government restrictions in place," said Chief Executive Peter Allen. "In those locations impacted less by lockdowns, we have seen trading conditions better than those experienced in the first half of 2019."

Investors in Australian retail real-estate investment trusts are starting to factor in the impact of new Covid relief measures on earnings, included rental waivers for tenants.

Scentre said it was able to collect A$1.2 billion of gross rent during the half-year period, illustrating its recovery from the corresponding period a year earlier when the collection rate was 70%.

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

(END) Dow Jones Newswires

08-23-21 1858ET