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UPDATE 1-Unibail-Rodamco keeps targets as malls defy slump
July 24, 2013 / 5:08 PM / 4 years ago

UPDATE 1-Unibail-Rodamco keeps targets as malls defy slump

* H1 recurring earnings per share up 5.5 pct

* Prime malls defy consumer belt-tightening -CEO

* Potential pick-up in European economy later this yr

* No comment on long-term 2017 outlook target (Adds CEO comments)

PARIS, July 24 (Reuters) - Unibail-Rodamco, Europe’s biggest property group, kept its full-year profit targets after its shopping malls resisted recession and helped deliver a 5.5 percent first-half rise in recurring earnings per share.

Paris-based Unibail’s portfolio of malls is heavily exposed to the recession-plagued euro zone but has defied the slump thanks to its focus on large sites with high footfall and well-known tenant brands like Apple, Samsung Electronics and Primark.

With the company also getting an added fillip from a drop in its cost of funding and with hopes for a pick-up in the European economy before the end of the year, Unibail’s chief executive said he was confident the company would hit its 2013 target of at least 5 percent growth in recurring earnings per share.

“Sales have actually picked up (in the first half)...Even in Spain, large malls have really outperformed the market,” Unibail Chief Executive Christophe Cuvillier said on a call with reporters.

Unibail’s CEO declined to comment on its more long-term target to hit 14 euros in recurring profits per share by 2017. First-half recurring profits per share rose to 5.21 euros.

Smaller rival Klepierre, whose top shareholders are Simon Property and BNP Paribas, recently upgraded its 2013 targets on the back of growth in Europe.

Unibail’s net rental income rose 1.4 percent in the first half of 2013, to 657 million euros ($868.45 million), with shopping-centre growth offsetting declines at the group’s smaller office portfolio and exhibitions business.

Although consumer belt-tightening and rough weather meant tenants’ revenues failed to grow, Unibail’s strategy of renewals and re-lettings - as well as existing contracts - meant that on a like-for-like basis mall rental income was up 4.7 percent.

Unibail is also trying to eke out more growth by opening new sites and refurbishing existing ones. It is set to complete an extension of a mall in Stockholm and to open a new shopping centre at Paris’ Charles de Gaulle airport later this year.

Shares of Unibail are up 13 percent since June lows, giving the company a market capitalisation of 18.06 billion euros. ($1 = 0.7565 euros) (Reporting by Lionel Laurent and Alexandre Boksenbaum-Granier; Editing by James Regan and Christian Plumb)

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