MAS Real Estate, the retail property investor in Central and Eastern Europe (CEE), has resumed dividends despite the ongoing Covid-19 pandemic and declared a dividend of 5.93 euro cents (R102) per share for the year to June 30.
The group had declined to pay an interim due to Covid-19, and the pandemic was not yet over, and vaccination rates in the group’s markets were low compared to Western European averages.
However, the group said yesterday that the business had returned to “significant profitability” – it had managed to deal with the Covid-19 fallout in its markets and the group was benefiting from good liquidity.
On the JSE, the share price increased 1.68 percent to R18.76 around midday yesterday.
Moreover, in its main market, Romania, gross domestic product per capita was higher than pre-pandemic levels and consumption had largely recovered.
Tenants’ turnovers at MAS’s Romanian commercial assets in the six months to June 30 were higher than 2019 levels, cash collection rates were improving and satisfactory, and sales related to the new residential developments were strong.
In addition, further Covid-19 disruptions were not expected to lead to negative operating cash flows in the short-term or to negatively impact longer-term earnings targets.
Therefore, the board agreed to resume dividend payments and intended to maintain this over the next five financial years, in the absence of unforeseen circumstances.
MAS remained well positioned to benefit from strong like-for-like net rental income growth through increasing tenants’ sales and asset management initiatives, a statement said.
The group performed satisfactorily in the second part of the year to June 30, 2021 with adjusted earnings of €47.4 million, compared to €57m in the previous six months, and adjusted earnings of €104.4m for the full financial year.
Tangible net asset value was 1.24 euro cents per share on June 30, up 6.9 percent from December 31, 2020 and 15.9 percent from the end of the 2020 financial year.
Retail properties in CEE had traded satisfactorily in the second half, especially Romanian open-air malls, and following high rental and service charge collections; the successful opening of Sepsi Value Centre in Romania in March and subsequent satisfactory trading of commercial developments. CEE asset valuations had also improved, as had the value of the listed securities.
The positives were partially offset by variances in earnings, from initiatives to optimise future returns, due to the ongoing Western European asset sales, and the issue of a €300m Eurobond.
The CEE portfolio occupancy was at 93.2percent (93.3 percent on December, 31, 2020). It was not improved mainly due to new developments opening with lower occupancy, as well as the refurbishment of Atrium Mall.
On June 30, MAS had €424.7m in cash, listed securities, expected sales proceeds and undrawn credit facilities. The loan-to-value ratio was a low 12.6 percent.