Precinct Properties New Zealand, the listed commercial property investor, lifted profit 10 percent, having cut interest costs after paying off debt by selling assets, though that pushed revenue lower.
Net profit rose to $34.8 million, or 2.87 cents per share, in the six months ended December 31, from $31.6 million, or 2.98 cents, a year earlier, the Auckland-based company said in a statement.
Profit before tax increased to $44.2 million from $35 million, as the interest expense dropped to $6.2 million from $17 million.
Revenue fell 13 percent to $74.9 million, with income from property down 13.5 percent to $53.7 million. Last year, the company engaged in a string of asset sales in Wellington to emphasise its Auckland presence, raising $177 million from the sale of three central-city properties. Having paid off debt, Precinct's gearing fell to 12.8 percent, from 20.1 percent in June.
Precinct is continuing with its $681 million Commercial Bay development in downtown Auckland, including a 39-storey waterfront office tower and retail centre, using funds from a newly-established banking facility. The development will encompass Precinct's four buildings in the surrounding area, which it anticipates will be worth about $1.5 billion on completion and represent 63 percent of the property investor's portfolio.
Chief executive Scott Pritchard said central government's recent commitment to the city rail link was "a further step forward for Commercial Bay," with 52 percent pre-commitment of the office tower from four clients including Chapman Tripp, and negotiations with retailers advancing well.
Some 67 percent of Precinct's portfolio is now in Auckland, from 60 percent in June. Its Auckland portfolio was almost fully occupied in the first half, and the company expects to benefit from rental growth in the city this year as occupiers compete for limited vacant office space.
The company expects full-year operating earnings after tax to be about 6 cents per share, before performance fees, with dividend guidance for the 2016 financial year unchanged at 5.4 cents per share.
The board declared a 1.35 cent second-quarter dividend, with a March 3 record date, payable on March 16.
The shares fell 0.8 percent to $1.22, and have declined 1.6 percent this year. The stock is rated a 'hold' by an average of six analyst recommendations compiled by Reuters, with a median target price of $1.20.