Merlin Properties’ net profit drops 30%

Merlin Properties’ net profit drops 30%

Art Building, Lisbon

The REIT’s consolidated net profit had an even higher y-o-y fall – 73% - registering 70.94 million euro. But, according to Merlin Properties’ presentation of its results, this number cannot be compared to the previous year’s number, due to atypical factors such as the assets sold and the lower asset revaluation when compared to last year. Its EBITDA also dropped 12.5%, is set at 184.1 million euro in June.

As it had already announced, Merlin Properties was already expecting an impact on its rentals’ revenues, since it decided to extend until the end of the year the discounts on the rents of retail spaces affected by the crisis. During the first semester, the rents revenues reached 259.4 million euro, 2.2% lower than last year. According to the document, this measure had an impact of 27.8 million euro up until June.

The Spanish REIT’s portfolio, on the other hand, seems to have resisted the crisis, since its gross asset value remained at 12.755 million euro – actually it’s 0.2% higher than last year. By segments, the office and logistics valuations continued growing with increased rents, net leases remained stable and shopping centres dropped around 4.7%. The assets’ net value reached 7.365 million euro (15.68 euro per share), a 3.8% increase during the last year.

The occupancy levels also remained in line with those registered before the pandemic at 93.9%, with the office segment at 90.9%, the logistics segment at 96.8% and shopping centres at 94.1%.

Merlin Properties quantified the impact Covid-19 had on its cashflow at a maximum of 60 million euro, indicating to the market that the operating profit for the whole year will reach 250 million euro. The company is planning the rest of the year and 2021 with «caution and prudence» but it will face the mid and long-term with a «very solid» situation.

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