Sonae Sierra net profit slumps 70% in first nine months

Portuguese shopping centre specialist Sonae Sierra recorded a net profit of €5.1 mln in the first nine months of 2013, down 70% on the year-earlier period.

The net result was hit by devaluations of €38.4 mln, which were far higher than the €26.3 mln booked in the first nine months of 2012.

The direct profit fell 7% to €42.7 mln from €46.1 mln in the year-earlier period, while EBITDA dropped 3% to €83.7 mln.

Sonae Sierra said the results reflected the impact of the sales in 2012 of the Munster Arkaden shopping centre in Germany and Pátio Brasil, Penha Shopping and Tivoli Shopping in Brazil, in line with the company’s capital recycling strategy.

Tenant sales in the European portfolio managed by Sonae Sierra fell 2.8% compared to the same period of 2012, reflecting the austerity climate in Portugal and Spain in particular.

Commenting on the results, Sonae Sierra’s CEO Fernando Guedes de Oliveira said: ‘We continue to develop our strategy in a sustainable way, continuously improving our operational efficiency, limiting risks and directing our business expansion to new emerging markets.’

He added: ‘It’s important to highlight how, together with our tenants, we have consistently achieved better results than the retail sales index in the European countries where we operate, maintaining stable occupancy rates in the assets we manage. Furthermore, we continue to expand our business through the opening of new shopping centres, and to increase our service provision activity.’

In Portugal, Sonae Sierra acquired 50% of CascaiShopping, the company's first shopping centre built from scratch.

In October, Sonae Sierra inaugurated two new shopping centres - Hofgarten Solingen, in Germany, and Passeio das Águas, in Brazil - and announced the entry into Turkey with the creation of Sierra Reval, a service provider for the shopping centre sector.

Also in October, the Sierra Fund and CBRE Iberian Value Added Fund sold Parque Principado shopping centre in Spain for €141.5 mln to Intu Properties of the UK and Canadian pension fund CPPIB.