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Unibail-Rodamco-Westfieldâs shares dipped 1.65% after the company announced its forecast of approximately 90 cents decline in 2019 AREPS due to its â¬2 billion of disposals in 2018 and those planned for 2019. The downgraded guidance doesnât stop here! The company estimated a further 50 cents decline on the 2019 AREPS driven by the project delays and the expenses in excess of benefits from Westfield transaction.
The announcement came out this morning when the developer and operator of flagship shopping centres, Unibail-Rodamco-Westfield (ASX:URW), unveiled its full-year results for the 12 months ended 31 December 2018. It outlined weaker than anticipated contribution in 2019 as Unibail-Rodamco-Westfield now expects its 2019 Adjusted Recurring Earnings per Stapled Share (AREPS) to be in the range of â¬11.80-â¬12.00.
But coming to 2018 results, it can be seen that the Group has achieved better than expected earnings. It is because URW announced its 2018 AREPS to â¬12.92, above than its guidance of â¬12.75 â â¬12.90. This also represents a growth of 7.2% on 2017âs AREPS of â¬12.05.
The Groupâs tenant sales through November outperformed national sales indices with an increase of 3.0% for the Group and 3.8% for Flagship centres. This included France demonstrating 3.4% growth, outperforming the IFLS index by +380 bps and the CNCC index by +520 bps, and Central Europe showing 8.2% growth, outperforming the weighted average regional sales indices by +544 bps.
The Minimum Guaranteed Rent (MGR) of the Group uplifted by 11.7% while it signed 1,319 leases during the period. Its like-for-like growth for Net Rental Income (NRI) in shopping centres was +3.4% in the UK, +4.0% in Continental Europe, +260 basis points above indexation. Moreover, going concern NAV per stapled share of URW grew to â¬233.90 as at 31 December 2018, up 6.7% or +â¬14.70 compared to the previous corresponding period.
As at 31 December 2018, the Gross Market Value of the Groupâs assets stood at â¬65.2 billion on a proportionate basis, representing a growth of 49.9% compared to the previous corresponding year, primarily driven by the acquisition of Westfield. Following the takeover of Westfield portfolio, the Groupâs proportionate GMV, i.e.33% of the total, increased by â¬21.5 billion.
The Group has proposed a 2018 cash dividend of â¬10.80 per stapled share, represents a payout ratio of 94% of the Groupâs adjusted net recurring result. It includes an interim dividend of â¬5.40, payable on 29 March 2019.
On the balance sheet front, the Group confirmed its average cost of debt at a lower level to 1.6% with interest coverage ratio of 6.1x and a decline of 37.0% in Loan-to-Value (LTV) ratio. During 2018, the Group disposed of â¬2.0 billion of assets as planned with a premium of 8.9% to the 30 June 2018âs book values. With these transaction and ongoing processes, the Group confirms to remain ahead of schedule to reach its target of â¬3 Billion of disposals over several years.
URWâs shares are trading at $11.350, down 1.65%, on 25 February 2019 (12:52 PM AEST).
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