ING Real Estate Community Living Group has reported a statutory profit of $13.1 million in FY11 compared to a $67.7 million loss in FY10.
However operating income fell substantially from $18.3 million to $6.9 million. The $11.4 million decrease in operating income was largely due to the loss of earnings from the sale of the US Meridian and Canadian Regency Seniors portfolios combined with the loss of income from the capital hedges which were terminated in November 2011.
Operating income per unit of 1.6 cents compared to 4.1 cents in FY10.
CEO Simon Owen said the fund’s liquidity position has strengthened considerably over the past six months following improved operating performance of the fund’s villages and the divestment of noncore assets overseas.
Net asset value per unit has increased slightly to 25.9 cents due to retained earnings for the year and firming valuations offset by appreciation in the AUD against the USD.
Overall look-through gearing for the fund decreased to 69% compared to 73% following the sale of five non-core assets from the Garden Villages portfolio, the proceeds of which were applied to debt reduction.
US Seniors portfolio gearing remained steady at 83%. While the partial sale of the US Seniors portfolio announced in July 2011 will see the Australian gearing improve considerably, the remaining New York portfolio is highly leveraged at 91%. This debt is longterm, non recourse and covenant light creating opportunity from any value uplift while limiting the Fund’s downside exposure.
No distribution is currently forecast for FY12 due to banking covenants.
Australian Property Journal
