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• Funds From Operations (FFO): $251 million, down 5.6%.

• FFO per Security: $0.105, down 5.6%.

• Investment Management FFO: $298 million, down 7%.

• Development Segment FFO: $36 million.

• Gearing: Within 20% to 30% target range.

• Weighted Average Cost of Debt: 5.3% for the half, expected to average 5.4% for the full year.

• Operating Cash Flow: Negative $187 million for the first half.

• Logistics Portfolio FFO Growth: 8.7% with positive leasing spreads of 33.2%.

• Occupancy Rate: Logistics at 97.3%, Town Centres over 99%.

• Comparable FFO Growth: 3.5% for Investment Management.

• Masterplanned Communities Settlements: Just under 2,000 in the first half, targeting 6,200 to 6,700 for the full year.

• Land Lease Settlements: Expected around 600 for the full year.

• Distribution per Security Guidance: Around 75% of post-tax FFO.

• Warning! GuruFocus has detected 10 Warning Signs with STKAF.

Release Date: February 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Stockland Corp Ltd (STKAF) reported a solid financial result with pre- and post-tax funds from operations (FFO) of $251 million, reflecting strong operational performance.

• The company successfully completed the acquisition of 12 actively trading Masterplanned Communities, integrating them into their platform and launching two additional communities.

• Stockland Corp Ltd (STKAF) expanded its capital partnerships in the Logistics sector, forming new partnerships with M&G Real Estate and KKR, with a combined initial portfolio value of approximately $800 million.

• The Logistics portfolio delivered strong performance with comparable FFO growth of 8.7% and positive leasing spreads of 33.2%, benefiting from strong market rental growth.

• The company maintained a strong balance sheet with gearing within the 20% to 30% target range and a weighted average cost of debt of 5.3% for the half year.

Negative Points

• FFO per security was down 5.6% compared to the previous period, reflecting a material second half skew in residential development.

• The Investment Management portfolio's FFO decreased by 7% due to asset disposals in FY24, impacting overall earnings.

• Operating cash flow for the first half of FY25 was negative $187 million, primarily due to increased development spend and second half weighting of settlement cash inflows.

• The Development segment's FFO was impacted by a material second half skew in Masterplanned Communities settlement volumes and no contribution from third-party Commercial Development activities.

• The company faced high cancellation and default rates in the Victorian market, although there was some improvement in settlement performance in the second quarter.