profit down 35 per cent as property value fall

Westfield main assets are 46Bn worth of shopping malls. Today announced write down in value of assets of 900m this past half-year. This is just the start. Malls in USA and UK will soon have plenty vacant space as retailers fold. WDC loves emphasising its customers are on 'long lease agreements.' But if the shop/chain goes bust, having a long lease is irrelevent.

From today's Aus.
Andrew Harrison, Dow Jones Newswires | August 27, 2008
WESTFIELD Group said first-half net profit fell 35 per cent as property revaluations dropped because of the global credit crunch.

However, the Sydney-based company’s operational earnings in the first half rose 15 per cent to $928 million.

Westfield Group (ASX: WDC) reiterated that it would maintain its distribution to unitholders this year, despite expectations for softer consumer spending in its key markets.

First-half net profit at Westfield fell to $1.29 billion from $1.97 billion a year earlier, as total income, including property revaluations, dropped 32 per cent to $2.02 billion, from A$2.98 billion.

Westfield shares fell 1.8 per cent, losing 30 cents to $16.36, as the benchmark S&P/ASX 200 Index slipped 0.53 per cent.

Westfield has interests in 118 shopping malls worth $62.9 billion in the US, Australia, New Zealand and the UK.

The company's first-half operational earnings, excluding the effect of currency movements, property revaluations and other non-cash items, rose to $928 million from $844 million a year ago.

Westfield increased the value of its properties by $248 million in the half, including equity accounted property revaluations of $97 million, compared with $902 million a year earlier.

The company's global portfolio has high occupancy levels and long-term leases based on minimum contracted rents. The assets generated strong and stable cash flows that were resilient through economic cycles, Westfield said.

Westfield said it was well positioned to deliver sustainable long-term growth, on both a strong financial position and development program.
For the full year, Westfield forecasts operational earnings growth of 5.5 a security, on a constant currency basis, while its distribution forecast was unchanged at $1.065.

In a joint statement, managing directors Peter Lowy and Steven Lowy said that Westfield’s focus on managing, redeveloping and investing in a high-quality global portfolio had reaped expected benefits.
They added: “Capital management and portfolio initiatives transacted over the last few years ensured the group is in a strong position to continue to deliver growth.”
Westfield's net operating income from comparable shopping centres in the first half rose 3.2 per cent - there was 4.8 per cent growth in Australia and New Zealand, 1 per cent expansion in the US and 0.3 per cent growth in the UK.
As at June 30, Westfield had total assets of $51.8 billion. Net debt to net assets gearing rose to 32.9 per cent from 31.7 per cent at December 31, 2007.
Westfield said it had $7.3 billion in available liquidity.