Charter Hall posts $17 million first-half loss

Property funds management and development group, Charter Hall, has posted an after tax statutory loss of $16.6 million for the 2009 first half, down from a profit of $46.5 million in the corresponding 2008 period.

This loss includes gains on sales of investments of $4.6 million, and fair value adjustments of $41.6 million, comprising property investments of $31.8 million and derivatives of $9.8 million.

The fair value adjustments for the group, which includes Charter Hall Funds Management, are a result of write-downs in the value of units in unlisted funds and negative movements in financial instruments.

Underlying earnings for the first half were $20.9 million, down from $26.3 million in the previous corresponding period, due mainly to “decreased performance and transaction fees”, according to David Harrison joint managing director.

The earnings were generated from revenue of $36 million, down from $43 million in the previous corresponding period.

Revenue fell because of reduced exposure to direct property, following the sell-down of the Core Plus Retail Fund (CPRF), and a lower contribution from performance fees, transaction fees and development investment income, Harrison said.

A substantial increase in base fund management, development management and property management fees partly offset the reduction in transactional revenue, he said.

Proceeds from the sell-down of CPRF were utilised to reduce Charter Hall’s debt balance, with interest expense for the period falling substantially to $4.5 million compared to the 2008 first half of $8.8 million.

The sell-down has also reduced the group’s debt facility with NAB to $100 million from $350 million. The facility has been extended to a three-year term until July 2011.

Distributions for the 2009 first half, to be paid on February 27, are 3.96 cents per stapled security, in line with an estimate in December 2008.