In its full-year results released to the market on Monday, Charter Hall Group reported an 18.7 per cent fall in operating earnings post-tax for the 2023 financial year to $441.2 million.
The group delivered operating earnings per security (OEPS) post-tax of 93.3 cents, down from 115.6 cents in the previous financial year. Furthermore, Charter Hall flagged a further fall in OEPS to approximately 75 cents in its guidance for the 2024 financial year.
In FY23, statutory profit after tax fell by 78.5 per cent versus FY22 to $196.1 million. Distributions totalled 42.5 cents per security, an increase of 6 per cent over FY22, with Charter Hall also providing guidance of 6 per cent distribution growth for FY24.
Meanwhile, the group’s funds under management (FUM) rose by 9.4 per cent or $7.5 billion during FY23 to a total of $87.4 billion as of 30 June.
“Despite challenging conditions, FY23 maintained group FUM despite downward valuations driven by rising interest rates,” commented Charter Hall managing director and group CEO, David Harrison.
“Property FUM grew $6.2 billion to $71.9 billion and our operating earnings ex-transaction and performance fees grew strongly, reflecting growth in FUM, the benefits of scale and our diligent focus on costs.”
The 9.5 per cent growth in Charter Hall’s property FUM included $4.8 billion of net acquisitions, devaluations of $1.6 billion and capex spend of $3 billion.
Of the $2.8 billion of gross equity inflows allotted by the group during FY23, $817 million was in wholesale pooled funds, $1.4 billion in wholesale partnerships, $9 million in listed funds and $542 million in the direct business.
“We delivered $3.1 billion of new developments for our funds, successfully completing four new office buildings and 17 logistics facilities,” said Mr Harrison.
“We remain well-placed to deploy capital into opportunities as they emerge, with $6 billion in available liquidity, which has risen to $7 billion post balance date with the $1.2 billion CPIF Asian Term Loan facility closing in August, whilst the committed and uncommitted $13.9 billion development pipeline provides further organic growth potential.”
Charter Hall’s property investment portfolio saw divestments and deployment being offset by valuation declines, which resulted in a net value increase of $33 million to $3 billion.
The group also declared a change in property investment valuation of -$220.7 million for FY23, a fall of 162 per cent compared to the $355.9 million positive change recorded in FY22.
$7.4 billion in new and refinanced debt facilities were completed across Charter Hall’s platform during the financial year. Platform facility limits were reported to have exceeded $30 billion, with approximately $7 billion of available liquidity.
Regarding the outlook, the group pledged to continue with its strategy of executing “a capital light, partnership model where the fully integrated platform can identify and exploit opportunities and trends before they become mainstream”.
“We have done this with an early entry and rapid growth in logistics to now being one of the largest logistics platforms in Australia,” Charter Hall said.
Additionally, due to its position as one of the largest owners of real estate in Australia, Charter Hall suggested it was “well aware of sub-market liquidity, market pricing and customer trends”.
“We will continue to curate our portfolios and continue both selective acquisitions and what has now been eight years of repeated divestments exceeding $1 billion annually, as pruning portfolios is a key ingredient of active asset management,” the firm added.
