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Westfield hits H1 funds from operations target amid 'challenging' retail market

Westfield Corp.'s funds from operations, or FFO, for the six months ended June 30 was recorded at US$343 million, in line with its forecast and up from the US$342.2 million registered in the year-ago period.

On a per-security basis, FFO increased 4.5% on a constant-currency basis to 16.5 cents, while distribution for the reporting period was also in line with its forecast at 12.75 cents per security.

Net operating income growth was 3.5% for the six months, while International Financial Reporting Standards-defined net profit for half-year 2017 was recorded at US$589 million. On the year, the mall landlord recorded increases in property revenue at US$630 million from US$563 million, EBIT at US$410 million from US$393 million and earnings before tax at US$353 million from US$352 million.

As at June 30, Westfield had US$32.2 billion of assets under management, of which 83% were flagship assets, and its portfolio was 93.9% leased.

Shareholders of the company, on record as of Aug. 14, will receive an interim dividend of 12.75 U.S. cents per ordinary share on Aug. 31.

On the development front, the company said Westfield London, which is undergoing a £600 million expansion, will open March 2018, six months ahead of schedule. The company also updated on other projects under its US$9.8 billion development program, noting that both Century City and UTC are expected to open in stages during the second half of 2017.

Looking forward, the developer reaffirmed its FFO forecast for full-year 2017 of between 33.8 cents and 34.0 cents per security, translating to pro forma growth of between 3.0% and 3.5%. The company also sees full-year distribution for 2017 to be at 25.5 cents per security.

"In a challenging retail environment, the performance for the first half was good and we remain confident on executing our strategy to transform our assets into the pre-eminent global shopping centre portfolio," Westfield Co-CEOS Peter and Steven Lowy said in the earnings release.