Valuations weigh on Goodman Group full-year profit

The news: Industrial property investor Goodman Group has reported a sharp drop in full-year profit after booking lower growth in valuations across its portfolio.

The numbers: Statutory profit for the year to 30 June slid to $1.56 billion, a 54% drop from a year earlier. This was mainly on account of lower growth in valuations, which came in at a net $0.8 billion increase. Operating profit, adjusted for the non-cash items, rose 17% to $1.78 billion, ahead of market estimates. The group will pay a final 15 cents dividend per security.

The context: Goodman achieved higher rents at its industrial property portfolio, helping it buck the recent trend of write-downs for listed commercial real estate. It reported occupancy of 99% across its portfolio, indicative of a tight rental market in the segment. The company is forecasting lower operating earnings per share growth of 9% in FY24, but left distribution for the year unchanged at 30 cents per security.

What they said: “Despite the macro uncertainty, structural drivers remain sound, driven by the digital economy, the need for more efficient and sustainable assets and limited supply in our markets,” CEO Greg Goodman said.