Another article in the Australian about GMG.Goodman Group on...

Another article in the Australian about GMG.

Goodman Group on track to meet full-year guidance despite weak H1 result

ONE of the world's top three developers and owners of industrial property, Goodman Group, delivered a lower-than-expected first-half operating profit today.
Goodman Group's operating profit for the six months ended December 31 was $138.5 million -- $77.6m lower than the corresponding half of $216.1m.

The latest operating result missed expectations of leading analysts, including Goldman Sachs & JBWere which forecast $154.7m.

At the bottom line Goodman Groups net loss widened to $500.3m, from $466m in the corresponding half in 2008.

However, analysts said the company's second-half result would be stronger and it would be able to meet its guidance to the market.

The markets initial reaction to the half-year results was to push down its securities by 1.7 per cent, but by mid-afternoon it had clawed back the loss to be steady at 59.5 cents per security.

Goodman Group chief executive Greg Goodman reaffirmed the full-year earnings guidance of $310m, or 5.67c per security, and distribution of 3.4c.

Mr Goodman said profit would come from development margins and fees from funds under management.

Burdened with debt, Goodman Group was forced to put off the commencement of new development during the global credit crisis last year.

After a $1.8bn equity injection and extension of some $4.1bn of debt last August, Goodman Group rapidly ramped up its development from December.

Mr Goodman said it had some $1.2bn of projects under development, all of which were funded with third party investment without having to utilise its balance sheet.

He said the group had some $10bn worth of projects -- $6bn in Europe and $4bn in Asia Pacific, including in Australia -- under planning. But these projects would be started only after it had matched them with third-party capital.

Funds under management dropped 6 per cent in the first half to $12.6bn, but the company said it was talking to potential investors in its funds.

Last year, the group brought in strategic investors in China's sovereign wealth fund, China Investment Corporation, and Canadian Pension Plan Investment Board.

Mr Goodman said the group's gearing had fallen to 25 per cent and it had liquidity of $1.4bn. The group is able to meet all its debt maturities from now until the first half of 2012-13.

http://www.theaustralian.com.au/business/property/goodman-group-on-track-to-meet-full-year-guidance-despite-weak-h1-result/story-e6frg9gx-1225833902542