Argosy Property Trust, the former ING Property Trust, has reported an interim profit of $10.2 million, excluding a massive $103.2 million deferred tax item.Many companies have reported deferred tax expenses resulting from the accounting treatment of the G
Argosy Property Trust, the former ING Property Trust, has reported an interim profit of $10.2 million, excluding a massive $103.2 million deferred tax item.
Many companies have reported deferred tax expenses resulting from the accounting treatment of the Government's decision to remove tax deductions on buildings.
Companies are now advising that the charge is an unintended consequence of the International Accounting Standard 12 and an exposure draft has been released by the International Accounting Standard Board to address this issue. If approved, the liabilities are expected to reverse.
Argosy's core property portfolio generated $35.6 million of net property income, down from $40.9 million last year and produced earnings before finance costs and tax of $31.4 million, down from $34.4 million last year. The reduced income is a result of asset sales during the last year.
Including the deferred tax liability the property trust made an after-tax loss of $93m for the six months to September 30, which compares to a loss of $5.6m last year.
The trust declared a cash distribution of 1.75 cents per unit for the September quarter and did not change an indication of an annual distribution of seven cents a share. The quarterly distribution is payable on December 21.
It said that activity levels in the property market since balance date provided some grounds for greater optimism but a focus on the risks and structure of the trust's portfolio was appropriate.
The deferred tax liability is a non-cash adjustment and will not form part of the calculation of the net distributable income available to unitholders under the terms of the trust deed.
The trust owns 81 properties in the retail, commercial and industrial sectors worth $946m. It did not get a revaluation for the interim result.
