The shopping centre owner wants to protect its balance sheet and liquidity due to Covid-19 fallout.
NEPI Rockcastle has withheld an interim dividend after Covid-19 lockdowns across Central and Eastern Europe (CEE) resulted in a big decline in rent collections at its shopping centres. Instead, it will compensate shareholders with additional shares so it can protect its balance sheet and liquidity.
The property group said the closure of non-essential retailers in all the countries where it operates had an adverse impact on its results for the six months to end-June, resulting in a 32% decline in distributable earnings per share to 19.66 euro cents. However, it said almost all the floor space at its shopping centres was back in operation and sales by its tenants were gradually returning to prior year levels, after reaching 88% in June. In July, footfall at its centre reached 75% of prior year levels.
For the period, net rental and related income fell 20% to €160 million and EPRA (European Public Real Estate Association) earnings per share (EPS) fell 28% to 20.59c. It reported a headline loss of 1.03c, down from headline EPS of 24.56c previously. Its net asset value per share declined by 8.5% to 6.21c. Under the capitalisation, shareholders will get 4.29 new NEPI Rockcastle shares for every 100 ordinary shares currently held.
We appreciate that the Covid-19 context might still impact the economies of our region and we will continue to manage our capital prioritising long-term sustainability, while also returning value to shareholders even through these unprecedented times,” CEO Alex Morar said.
NEPI said it expected a contraction in distributable earnings per share for the full year of about 30% assuming a continuation of recent trading trends and barring any potential further macroeconomic disruptions, such as a new broad lockdown in CEE countries.
Main Image: The Romania Journal
