SYDNEY - Property giant Mirvac Group has forecast an improvement in operating earnings this year, after property devaluations savaged its bottom line in 2008/09.
The property developer and funds manager's statutory result for the year to June 30 was a A$1.08 billion ($1.32 billion) loss, compared to a A$171.8 million net profit in the previous year.
It was affected by A$756.4 million in losses in fair value on investment properties and financial instruments, and A$522.5 million in impairments.
Net operating profit, which excludes non-cash and significant items, was also lower, by 43 per cent to A$200.8 million.
However, Mirvac forecast operating profit to be around A$253 million in 2009/10 - a 26 per cent rise. Managing director Nick Collishaw said there was good reason to be optimistic about Australia's economic position, and Mirvac was well placed for the future.
"In our business, we have seen increased inquiry from second and third-home buyers as well as investors as the potential for capital gain turns to reality," Collishaw told analysts.
He predicted less or no asset revaluations in the current financial year.
"I find it hard not to see the pace of devaluation slowing, or indeed ceasing, later this financial year," Collishaw said.
The group's investment division, comprising Mirvac Property Trust and Mirvac Asset Management, is forecast to provide 80 per cent of the group's earnings in 2009/10.
Mirvac reduced its gearing from 34.2 per cent to 18.7 per cent as a result of A$1.6 billion in capital raisings in 2008/09.
Mirvac declared a final distribution of A0.2c, down from A8.23c in the prior year, bringing full year distribution to A8c, down from A32.9c.
- AAP
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