Scentre Group (SCG) H1 2024 earnings summary

Executive summary

• Funds From Operations (FFO) for H1 2024 rose 2% to AUD 568 million (10.95 cents per security), with distributions up 4.2% to AUD 446 million (8.60 cents per security).

• Net operating income increased 3.5% to AUD 1.006 billion, driven by higher property revenue and occupancy.

• Statutory profit was AUD 404 million, including an unrealized property revaluation decrease of AUD 120 million.

• Portfolio occupancy reached 99.3%, with 1,459 leasing deals and 550 new merchants or 98 new brands added.

• Customer visits rose 1.9% to 320 million, and business partner sales for the 12 months to June 2024 hit a record AUD 28.6 billion, up 2.9% year-over-year and 17.1% above 2019 levels.

Financial highlights

• FFO per security was 10.95 cents, up 2% year-over-year; interim distribution was 8.60 cents per security, up 4.2%.

• Property revenue rose 5.1%, specialty rent escalations 5.5%, and leasing spreads on new leases were +1.1%.

• Gross rent collections totaled AUD 1.37 billion, 100% of billings and AUD 40 million higher than H1 2023.

• EBIT increased 3.6% to AUD 985.3 million; operating profit per security rose 3.5% to 10.90 cents.

• Basic EPS was 7.79 cents, up from 2.88 cents; diluted EPS was 7.75 cents.

Outlook and guidance

• FFO for 2024 expected in the range of 21.75–22.25 cents per security, representing 3%-5.4% growth.

• Distributions for 2024 are forecast to be at least 17.20 cents per security, at least 3.6% growth.

• Guidance includes potential benefit from repricing/reissuing subordinated notes.

• Group remains well positioned for long-term growth, subject to no material change in conditions.