Hyprop H1’25 HEPS up 24.1%

Property group Hyprop has reported a strong operational performance in the six months to December, with a notable increase in its dividend payout ratio and the declaration of an interim dividend. The company's first half distributable income per share surged by 14.4% to 201.4 cents, showcasing impressive growth. Hyprop, which owns malls in South Africa and Poland, remains optimistic about meeting the upper end of its earnings guidance for the full financial year, despite potential economic headwinds. CNBC Africa spoke with CEO Morne Wilken to delve into the details of the company's performance and outlook. Wilken highlighted the exceptional operational performance of Hyprop's portfolio, particularly in Europe and South Africa. He emphasized the benefits of restructuring long-term debt, which has reduced interest costs for the company. The absence of significant load shedding in the last six months also played a favorable role in Hyprop's performance. However, Wilken acknowledged some challenges, citing lingering impacts from the African market. He noted that while divesting from Africa was a strategic move to escape in-country debt, there are lingering effects on the balance sheet until the process is completed. One of the key highlights from Hyprop's recent results is the uptick in the dividend payout ratio. Wilken attributed this increase to the successful balancing of the company's sheet and a reduction in consolidated loan-to-value ratio. The CEO highlighted efforts to enhance portfolio performance, including improvements in tenant trading and a decrease in the effort ratio. Hyprop is confident in sustaining the current payout ratio, with potential for further increases in the future. In South Africa, the company witnessed positive tenant turnover, trading densities, and rental reversions. Despite challenges like ongoing load shedding and reduced expectations for interest rate cuts, Wilken expressed confidence in the outlook for the South African portfolio. The company's forecasts aligned with market trends, and Hyprop remains optimistic about the growth potential in the region. Conversely, in Eastern Europe, Hyprop's turnover growth surpassed that of South Africa, with minimal vacancies at 0.2%. Expected rate cuts in the region bode well for the company's performance. Wilken underscored the positive momentum in Europe and projected strong performance ahead. Despite adverse impacts from strengthened rents, the overall outlook for Europe remains positive. Addressing economic uncertainties, Wilken acknowledged concerns about interest rates and inflation, particularly in the context of global trade tensions and potential geopolitical issues. While there are apprehensions regarding inflation and trade wars, Hyprop remains upbeat about its South African portfolio's performance. The company continues to focus on market share growth and believes its malls are trading well amidst the challenging economic landscape. Looking ahead, Hyprop is committed to achieving the upper end of its distributable income range. The company's strategy involves monitoring economic uncertainties closely and adjusting to external factors that may impact its operations. Wilken emphasized the importance of remaining agile in response to market dynamics, while maintaining a positive outlook on the company's growth prospects. With a solid foundation in place and a proactive stance on navigating economic challenges, Hyprop is poised to continue its growth trajectory and deliver value to shareholders amid a complex global climate.