Listed property investor NPT has returned to profit in the first half, reflecting an increase in the value of its rejuvenated Eastgate Shopping Centre in Christchurch after the value of property tumbled in the year earlier period.
Profit in the six months ended September 30 was $8.77 million, or 5.42 cents a share, from a loss of $9.83 million, or 6.07 cents a year earlier, the Wellington-based company says in a statement. Net rental income fell to $5.6 million from $9.1 million.
Profit a year ago was wiped out by a $22 million drop in the value of property and a net loss of $4.77 million from the Canterbury earthquakes. Eastgate has since received CERA certification and risen in value by $5.3 million to $40.8 million.
Its Natcoll House retains it valuation of $12 million, though NPT is still in talks with insurers about its quake damage claim.
"This year's first-half result brings the company's operating profit figure back in line with current trading conditions. Rental income has softened but on the upside there have also been a reduction in operating costs and interest payments," chief executive Kerry Hitchcock says.
At Eastgate, "foot traffic has increased and brisk Christmas trade is expected".
NPT shares last traded at 62 cents and have gained 25% this year. The company will pay a second-quarter dividend of 0.575 cents per share.
Interest expenses fell to $1.6 million from $2.6 million after the company bought out two long-date interest rate swaps.
The total value of NPT's property portfolio rose to $126.3 million as at September 30 from $118 million a year earlier. Its weighted average lease term increased to 6.2 years from 3.4 years after strong leasing activity, it says.