Redefine Properties H1 earnings fall

South Africa’s Redefine Properties reported a 62.7% decline in half-year headline earnings on Monday, due to asset sales and further rental relief to financially distressed tenants and said that it may pay a dividend.

The owner of retail, office and industrial properties said headline earnings per share, the main profit measure in South Africa, fell to 8.45 cents in the six-months that ended February 28, from 22.63 cents a year earlier.

During the period, total relief granted to its tenants amounted to R107.3 million ($7.58 million), made up of rental discounts of R81.5 million and deferred rental payments of R25.8 million, Redefine said.

The group’s retail tenants, particularly travel agents and cinemas were the most impacted, with hairdressers and beauty salons still battling to recover, it said.

Redefine sold assets for R4 billion and deconsolidated its European Logistics Investment B.V. (ELI), which also contributed to the 30.8% decline in total revenue to R3.3 billion.

The asset sales, however, helped the diversified Real Estate Investment Trust (REIT) reduce its debt levels or loan-to-value ratio (LTV), which measures the ratio of a company’s debt and its assets, by 3.6% to 44.3%, well within debt covenants.

The major focus for Redefine and other REITs has been on preserving liquidity and lowering LTV ratios. Redefine wants to further reduce it to below 40%.

The lower revenue reduced distributable income per share, which reflects the portion of income paid to shareholders, by 21.8%.

Redefine said that subject to the liquidity and solvency test at the time of the declaration of the dividend, it is anticipated that it should be in a position to pay a dividend for the 2021 financial year.

On Friday it deferred a decision on an interim payout until the release of annual results in November.