Vicinity Centres (ASX:VCX) - CEO & Managing Director, Grant Kelley
CEO & Managing Director, Grant Kelley
Source: Herald Sun
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  • Shopping mall owner Vicinity Centres (VCX) was significantly impacted by COVID-19, recording a statutory net loss after tax of $394.1 million for H1 FY21
  • This marks a u-turn from its previous statutory net profit of $242.8 million in H1 FY20
  • Net property income totalled $344.4 million, which is down nearly $95 million from H1 FY20
  • During the half, Vicinity had to close the majority of its Melbourne stores for more than half the period
  • Business across its CBD stores was impacted due to office staff working from home and limited tourism arising from border closures
  • Due to the ongoing uncertainty arising from COVID-19, Vicinity cannot provide its full-year earnings for FY21
  • Vicinity has ended the day 1.56 per cent in the red with shares trading at $1.58

Vicinity Centres (VCX) was significantly impacted by COVID-19, recording a statutory net loss after tax of $394.1 million for H1 FY21.

This marks a u-turn for the shopping mall owner, which reported a statutory net profit of $242.8 million in H1 FY20.

The loss was primality driven by a decrease in funds from operations (FFO) of $337 million in H1 FY20 to $267.1 million this half and a net property valuation loss of $572.4 million.

The FFO results were significantly impacted by COVID-19 which caused rental waivers and unpaid rent.

Net property income totalled $344.4 million, which is down nearly $95 million from H1 FY20.

“Although the pandemic led to significant financial and operational challenges, Vicinity is well-positioned to benefit from improving economic conditions, with consumer and business confidence now approximating pre-pandemic levels,” CEO and Managing Director Grant Kelley said.

“While the retail industry is showing continuing signs of recovery, we recognise that uncertainty remains, with the potential for further COVID-19 restrictions, the unwinding of temporary government support measures, and a prolonged recovery in CBDs on the eastern seaboard,” he added.

Operations

During the half, Vicinity had to close the majority of its Melbourne stores for more than half the period.

Business across its CBD stores was impacted due to office staff working from home and limited tourism arising from border closures.

However, outside of these areas and where COVID-19 concerns are low, customers have returned to the centres.

To minimise the spread of COVID-19, Vicinity undertook enhanced cleaning, and promoted social distancing and mask wearing.

Outlook

Due to the ongoing uncertainty arising from COVID-19, Vicinity cannot provide its full-year earnings for FY21.

“2020 was a very challenging year for Australia, but we are cautiously optimistic that a retail recovery is gaining momentum. Localised outbreaks of COVID-19 are being well managed, governments are providing significant encouragement of economic activity, and consumer sentiment is just off a 10-year high,” Grant commented.

“Despite the improvement in trading conditions there remains uncertainty, particularly due to the ongoing effects of the pandemic. As such, Vicinity cannot provide FY21 full year earnings guidance as it would not be reliable,” he concluded.

Vicinity has ended the day 1.56 per cent in the red with shares trading at $1.58 in a $7.306 billion market cap.

VCX by the numbers
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