at ease, page-2

February 21, 2009

GOODMAN Group has warned the market to expect a drop in operating profit and almost $1.1billion worth of asset write-downs in its interim profit report next week.

Goodman shares lost 62 cents this week to close at 45.5c, and it may have decided to provide more certainty to the market in a bid to halt the decline.

Goodman said it expected to report after-tax operating income of about $215 million, down from $290.3 million in the corresponding December 2007 first half.

However, operating results were expected to be in line with guidance, and the trust expected earnings per security of 11.1c.

Goodman confirmed that distribution would be 9.65 per cent for the first six months. The company said it would take a 7percent write-down on its portfolio of industrial buildings and business parks. The book loss would be "approximately $500 million".

Mark-to-market foreign exchange and derivative losses would total $419 million.

Group gearing was around 41.5percent, "well within" its debt covenant limits.

The trust's earnings remained at about 3.3 times above debt covenants.

Under new funds management initiatives introduced last December, Goodman successfully raised $764 million for its Goodman UK Fund, Arlington Business Park Partnership, and refinanced $450 million worth of debts in its Goodman Australia Industrial Fund, in which Goodman is a cornerstone investor, along with a number of superannuation funds, offshore pension funds and sovereign wealth funds. The Australia Industrial Fund owns 100 properties, valued at $4.8 billion.