Attacq, the South African retail, office and industrial REIT (real estate investment trust), yesterday reported a 27.3% rise in interim distributable income, boosted by higher rental income, as it reinstated a dividend to its shareholders.
In its half-year results for the six months ended December 31, 2022, the group, which has Mall of Africa and Waterfall City in its portfolio, said distributable income increased by 27.3% to R253.2 million, or 35.9 cents per year, from 28.2 cents a year earlier.
The board approved the declaration of an interim gross cash dividend of 29 cents a share. Last year the company withheld its dividend.
Attacq said its distributable income was also boosted by mobile operator Cell C settling its arrears in cash after its recapitalisation.
In September, Cell C announced the finalisation of its R7.3-billion debt recapitalisation, with lenders agreeing on an offer of 20c for every R1 of debt.
Attacq said its full-year distributable income per share guidance of between 8% and 10% growth, and a pay-out ratio of 80%, remained unchanged.
The group said its performance was particularly resilient against the backdrop of South Africa's low growth environment, characterised by record unemployment, poor business confidence levels and a general weakening economy exacerbated by the country’s energy crisis.
Total income declined 2.9% to R257.3m, and profit for the year decreased by 71.8% to R198.7m. Cash flow, the cash generated from operations, declined by 4.2% to R351.2m.
Attacq CEO Jackie van Niekerk said: “Our results indicate that we are on track in delivering on our purposeful strategy focused on creating smart, safe and sustainable community spaces, while enhancing the experience of our clients and shoppers within our office, retail and industrial hubs."
Attacq CFO Raj Nana said: “For the interim period, amidst tough economic conditions we delivered a strong performance from our key strategic node, Waterfall City, which grew 49.9%. The balance sheet remains healthy with a gearing ratio of 38%, and available liquidity of R1.4bn.”
Waterfall City generated 58.5% of distributable income, and its distributable income rose 50% to R148m.
"Attacq’s burgeoning, mixed-use Waterfall precinct continues to see development activity, which, in the period under review, totalled 53 697m2 of gross lettable area, with a total cost at completion of R915.4m," it said.
Attacq said it embarked on initiatives to curb the continuous use of generators as a result of increased load shedding.
"The company’s response has been to reduce energy consumption and reliance on generators through a number of initiatives, including retrofitting lights, installing generator management systems to shut down generators after hours for specific buildings, and adding ±2.3MWp rooftop photovoltaic (PV) systems, with a further ±4.7MWp rooftop PV systems in planning, as well as battery back-ups for buildings and precincts," it said.
Attacq said another significant milestone was the recently announced transaction in terms of which a R2.8bn strategic investment into Waterfall City by the Government Employees Pension Fund (GEPF) has been proposed.
The GEPF will acquire a 30% stake in the ordinary shares and shareholder loans held in Attacq Waterfall Investment Company (AWIC), a wholly-owned subsidiary of Attacq, and the owner of Waterfall City, for about R2.5bn, plus R300m into AWIC as a shareholder loan.
"Once implemented, Attacq will see its gearing reduce significantly, providing the balance-sheet capacity to develop out Waterfall City. Attacq’s capital structure will also be optimised resulting in a reduced cost of capital, thereby enhancing returns for Attacq’s shareholders," it said.
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