Goodman Property Says Full-Year Operating Profit Will Drop on Finance Cost

Goodman Property Trust, New Zealand’s second-largest publicly traded real estate investor, said earnings will decline next year on higher finance costs and slower-than-expected economic growth.

Operating earnings will fall to between 8.6 cents and 8.8 cents a unit in the year ending March 31, 2011, from 9.1 cents in the year earlier, the Auckland-based company said in a statement. The company sold NZ$150 million ($108 million) of bonds in December which has increased finance costs.

Profit could be further affected by any changes made to the taxation of property investments and depreciation rules that may be introduced by Finance Minister Bill English in his May 20 budget, the company said. Operational earnings could fall as much as a further 7 percent, dependent on the scope of any budget changes, it said.

The company today said operating profit, which excludes revaluation of property and financial instruments, fell 7.5 percent to NZ$77.5 million in the year to March 31. After revaluations there was a NZ$7 million loss.

Goodman will clarify its 2011 dividend expectations after the budget, it said. Company policy is to distribute 90 percent of operating profit, it said. It paid out 93.4 percent in the latest year.

The shares were unchanged at 99 New Zealand cents at 1:50 p.m. in Wellington trading.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.

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