Australand Records Net Tax Loss for Last Year

Australand Property Group (ALZ), a renowned Australia based diversified property group that has operations in Sydney, Perth, Melbourne and south east Queensland posted a $298.2 million worth of net tax loss for the full year to December 31st, 2009 and stated that it is not expecting to see any pick up in earnings before the next year. According to the managing director of the company Bob Johnston, the company will see the operating profits remaining at the same level where it was during the last year. Mr. Johnston also added that a softer outlook on falling affordability in the housing sector and a high cost of debt was to be blamed for the situation.

Although Australand is likely to launch some new projects in the current year, they are not expected to come up with any material contribution to the earning until the next year. However, the asset devaluation which was accounted for $249.4 million net loss for the company was during the previous year was reduced. According to Mr. Johnston, as much as $14 million worth of writedown took place during the second half of the year 2009 in comparison with $235 million during the first half of the year. He said that, the lower development profit which fell to $120 million from $175 million during 2008 contributed to the reduced operating earnings in the previous year.

The company recorded the return on capital from its residential development operation as 7.2 percent where in the year 2008, it was 9.9 percent. Mr. Johnston stated that the objective was to boost the return on capital to 12 percent over a three year period and to redistribute capital in an attempt to raise investment in the industrial and commercial area. According to the managing director, Australand is going to boost its recurring income from the investment assets and will reduce its dependency on development. It is to be mentioned that the company has appointed the ex-Lend Lease executive Rod Fehring as the head of its residential business on Monday.