Westfield posts healthy profit but vagueness on plans disappoints

Westfield Group, one of the world's largest shopping mall operators, delivered 2010 earnings in line with expectations amid improving global retail markets, but said it was too early to ramp up existing plans for new development investment of up to A$1 billion ($1.3 billion) a year.

Westfield, which had been expected to announce some asset sales, said it would sell unproductive assets over time but did not specify plans.

"The market was expecting some positive news in terms of some additional development going forward and that didn't happen," said Winston Sammut, managing director for Maxim Asset Management.

"Also the market was expecting some news on sales of some of the assets so that they can recycle funds and that hasn't happened either."

Shares of Westfield slipped 10c to A$9.82 by close of trade.

Westfield has identified about A$10 billion of future development in the pipeline and has said it would commence between A$500 million and A$1 billion of projects every year.

For 2011, it said it planned to start A$750 million to A$1 billion of projects.

"We are starting in the US, we are looking at the UK again and we are doing work in Australia. We really need to see a firmer footing to be able to get somewhere before we start ramping up,"Westfield managing director Peter Lowy said.

Westfield last year sold some of its stakes in existing malls including Stratford City development in London.

A lot of capital, especially pension funds, was targeting retail assets because of their steady and long-term income stream, Lowy said.

Asked about potential sales of assets, Lowy said: "What we have said is that we are looking to do more joint venture work in the United States for our portfolio, and globally on our portfolio, for less productive assets, we will be looking to sell over time. We'll be doing the combination of both."

Westfield reported operational earnings of A$2.063 billion, in line with analyst estimates, and posted a net profit of A$2.3 billion for the year, thanks partly to A$1.14 billion property revaluations and excluding abnormal items.

Westfield stuck to its forecast to pay out 48.4c a share in 2011.

The company spun off Australian and New Zealand assets to create Westfield Retail Trust in December, positioning itself as a growth firm to seek opportunities in overseas markets while keeping the new trust as an income producing vehicle in the mature domestic market.

- NZPA