(Adds details, CEO comments)
PARIS, July 21 French shopping mall operator
Klepierre slightly raised its cash flow forecast for
the year on Monday on expectations it will benefit from
refocusing its portfolio on prime properties in its key markets
and lower interest rates.
The company, 28.9 percent owned by Simon Property Group
and 21.3 percent by BNP Paribas, said it
expected net current cash flow of 2.03-2.05 euros per share this
year. Previously it had expected at least 2 euros.
Net rental income at its shopping centres rose 3 percent in
the first half of the year on a like-for-like basis, with
consumer spending broadly stabilising in Europe.
"What's interesting in this performance is (it's) well
spread all over Europe," Chief Executive Laurent Morel told
journalists on a conference call.
Despite slowly recovering economies, rents were up 2 percent
in France and Italy, up 3 percent in Spain and Portugal, and up
4 percent in Scandinavia, Morel added.
A 9.6 percent fall in payroll expenses and a lower cost of
debt helped boost net current cash flow, which reached 1.05
euros per share in the first half, up 2.8 percent from the same
period in 2013.
Total first-half revenue fell to 477.7 million euros ($646
million) from 513.7 million a year earlier with net rental
income hit by disposals, Klepierre said.
The company has disposed of 2.4 billion euros in assets so
far this year as part of a drive to focus its portfolio on its
main markets in France and Scandinavia.
Klepierre said its net asset value per share stood at 28.7
euros at the end of the first half, down from 29.3 euros a year
Disposals allowed the company to reduce its debt burden,
bringing its loan-to-value ratio, a common measure of leverage
at property companies, down to 39.9 percent by the end of the
first half. It has since fallen further to 38.4 percent thanks
to the sale of several Swedish malls at the start of this month.
($1 = 0.7395 Euros)
(Reporting by Leigh Thomas; Editing by James Regan)