The Dexus Property Group (ASX: DXS) share price is dipping today following the release of mixed first-half results for FY21.
At the time of writing, shares in the leading Australian real estate group are swapping hands for $8.50, down 2.75%.
How did Dexus perform?
For the period ending 31 December 2020, Dexus reported net profit after tax (NPAT) of $442.9 million. The result was a 55.5% decrease from the prior corresponding period due to net revaluation gains of investment properties. External auditors independently valued a total of 111 of 122 of Dexus’ office and industrial properties.
Adjusted funds from operations (AFFO) and distribution stood at 28.8 cents per security. This represented an increase of 7.1% and 6.7%, respectively, over the same time last year. The lift in AFFO and distribution was attributed to increased trading profits of $47.1 million.
Dexus experienced relatively strong rent collection with 96% of its entire portfolio paying on time. It noted that during the period, management focused on cash collection while ensuring the stability of its small-to-medium-sized business customers.
The company advised it has a healthy balance sheet of $1.7 billion in cash and undrawn debt facilities.
What did management say?
Dexus CEO Darren Steinberg commented on the company’s results:
Despite the widespread impact of the pandemic, the first half of FY21 has been characterised by increased leasing activity, relatively strong rent collections, initiatives to grow our funds management business and the selective recycling of assets.
Our high-quality portfolio, the strength of investment demand for quality assets, and our platform capabilities will enable us to drive performance in this next stage of the real estate cycle.
Outlook
Looking ahead, the company will seek to expand revenue streams as COVID-19 may continue to linger for some time. While working from home has impacted revenues, Dexus believes that the office sector is needed for running business operations.
The company expects its full-year distribution per security to remain in line with the previous year of 50.3 cents. However, it stated that the forecast could change depending on renewed lockdowns or unforeseen circumstances.
About the Dexus share price
During March 2020, the Dexus share price was hit hard when government restrictions enforced widespread lockdowns. The company’s shares fell from a 52-week high of $13.51 to a multi-year low of $8.03 in August – the time when the Victoria government introduced stage 4 restrictions.
Based on the current share price, Dexus commands a market capitalisation of roughly $9.3 billion.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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