Klépierre lifts EPS despite goodwill impairment on Corio acquisition

French mall operator Klépierre announced this week that earnings per share in 2015 came in just ahead of its target thanks to an increase in rents driven by stronger sales at its shopping centres.

Shopping centre net rental income amounted to just over €1 bn, up (+46.4%) on a current basis compared to 2014, thanks mainly to €360.6 mln of additional net rental income from former Corio assets consolidated since January 1, 2015 and from the contribution of the Plenilunio mall in Madrid which it acquired in March 2015.

Nevertheless, the Paris-listed company posted a net loss of €444.6 mln over the year due to a €704.5 mln goodwill impairment charge related to the Corio acquisition.

All regions, except Germany and the Netherlands, posted growth rates above 3%. In the top-performing countries, growth was also driven by an improvement in rent collection, an overall decrease in vacancy, and higher variable rents, the company said.

For 2016, the company is expecting like-for-like rental income to continue to grow while additional synergies will also be delivered. Net divestments in 2015 would only hit 2016 results slightly, the company said. In 2015, the company shed some €850 mln worth of assets.

The company currently has €22 bn of assets under development and a €3.6 bn development pipeline. Its loan-to-value ratio was stable at end-2015 at 39.2%. Three major projects that are scheduled for delivery in 2017 include the Val d’Europe extension and first phases of Prado in France and the redevelopment of Hoog Catharijne in the Netherlands.

‘For the years to come, I am confident in our ability to unlock further value through our platform of leading shopping centres in continental Europe, which offers a clear competitive edge for international retailers wanting to expand in the right location and with the right format,’ CEO Laurent Morel said.

In terms of retailer sales, Turkey generated the strongest performance with an increase of 15.3%. Germany also turned in a good performance of 14.8%, fuelled by higher sales Centrum Galerie in Dresden following the opening of Primark and in Boulevard Berlin by the introduction of a new supermarket operator.

Hungary and Czech Republic followed with increases of respectively 11.5% and 7.6%. In Scandinavia, retailer sales were up by an average 3%, driven by Sweden (+7.9%), with Emporia in Malmö posting the highest increase, and Denmark (+3.7%), where Field’s strengthened its position as the largest shopping mall in the Copenhagen region. Norway recorded a slight contraction in sales of -0.8%.

Poland likewise bucked the trend in CEE with a decline of 1.9%.

In Southern Europe Klépierre malls benefitted from the strong economic recovery and posted a 7% increase in Spain and Portugal. Italy also performed well with growth of 5.8%. Meanwhile France-Belgium booked an increase of 2%.

Klépierre is part-owned by Simon Property Group and APG, a Netherlands-based pension fund.