Kiwi Property Group has posted a large annual loss after writing down the value of its portfolio because of the Covid-19 pandemic, which is set to eat into the coming year's earnings.
The country's biggest property company reported a loss of $186.7 million against last year's profit of $138.1m, as it cut the value of its holdings by $290m.
"While the company delivered a good operating performance FY20 (financial year 2020), the onset of the Covid-19 pandemic late in the financial year had a significant impact on our property valuations and net profit," chief executive Clive Mackenzie said.
Its revenue was up 2.6 percent to $243.6m, and its funds from operations, which it regards as a key measure of profitability, with all its property types showing growth, led by office space, mixed use of office and commercial, and even retail managed a slight lift on the previous year.
Overall its occupancy rate was 99.5 percent, with an average lease life of just under five years.
Mackenzie said Kiwi Property had worked to reach agreements with tenants to share the financial impact of the pandemic through rent abatements and deferments, in particular for small and medium businesses, and retailers forced to close during the lockdown.
That relief was expected to cost it $20m in the first quarter, which would be partly offset by the reintroduction of depreciation allowances for commercial buildings, which was introduced as part of the initial government relief measures.
The company scrapped its final dividend to conserve its finances because of Covid-inspired uncertainty. It's already extended its bank facilities, cut back spending, with senior executives taking 20 percent pay cuts.
The company is carrying on with expansion of its Sylvia Park retail and office complex, and with the easing of restrictions on public gatherings it's retail outlets were only 8 percent on patronage on a year ago.
Mackenzie said it was also looking to start the development of the Drury town centre, south of Auckland, from 2023.