Macquarie Office Posts Net Loss, Warns Drop in EPS

Submitted by Jim Thesiger on 21 August, 2009 - 06:46

A $1.37 billion worth of net loss was recorded by Macquarie Office Trust (MOF) for the year that ended at June 30. The trust also warned that the earning per share for 2009-10 is assumed to be lower than the past year figures. Core earning for the trust for 2008-09 was $185.8 million. However, the chief executive Mr. Adrian Taylor claimed that the trust have passed through the worst scenario and has stabilised the balance sheet. Mr. Taylor also added that the performance of the trust was impressive in the difficult economic environment with renewing 104 leases which represents 11 percent of the trust portfolio. According to the chief executive, the trust had a retention rate of 84 percent due to the fact that tenants chosen to stay put and not "rock the boat" in vague economic scenario.

MOF went for putting its offices in Frankfurt, Japan and Milan on the market might have a larger portion of its Australian assets in the medium term. Selling assets in US or Europe would decrease the offshore weighting to close to 50 percent which would be pretty much close to the objective of the company, Mr. Tayloe mentioned. He also added that a debt worth of $950 million was repaid by the trust. More than 60 percent of the total exposure was repaid by the trust in the year till 30th June.

Macquarie Office Trust comprised a gearing ratio of 36.9 percent which was higher than a lot of A-REITS, however, Mr. Taylor mentioned that he was not worried about that. Macquarie Trust was one of those few trusts which after raising $508 million in December last, didn’t go for another raise. According to the JPMorgan Property analyst Michael Scott, difficult times are coming but the most important thing is that the trust has updated itself and is expected to survive the hit.