Australia's Mirvac Group gains most in 3 years as HY earnings trounce estimate

Mirvac

08/02/2024 04:09

Feb 8 (Reuters) - Shares of Mirvac Group  MGR.AX  jumped
the most in more than three years on Thursday, as the Australian
property investment firm reaffirmed its full-year forecast after
its half-year operating profit beat market expectations.
    The Sydney-based firm posted operating profit after tax of
A$252 million ($164.48 million) for the first half, lower than
A$305 million in the year-ago period, but higher than consensus
estimate of A$248.9 million, according to UBS.
    The results came in even as the Australian commercial real
estate sector was reeling under headwinds including demand woes
due to a rise in work-from-home trends, higher interest rates
lowering portfolio valuations, and a slowing economy.
    Shares of Mirvac rose as much as 6.5% to their highest level
since Sept. 15. The stock also posted its biggest intraday
percentage gain since Nov. 10, 2020.
    "Signs that interest rates are at or near peak level and
falling inflation are positive, and we are well-positioned to
capitalise on a market recovery across all of our operating
segments," Group CEO Campbell Hanan said.
    Jarden analysts, however, see some downside risk to
near-term earnings in the absence of improving conditions,
noting that the majority of earnings came from Residential and
Office segments.
    "We see MGR as being in a strong position to benefit from a
more stable (or lower) interest rate environment," they wrote.
    Mirvac also reaffirmed its annual forecast for operating
earnings per security of 14-14.3 Australian cents and
distribution per security of at least 10.5 Australian cents.

   ($1 = 1.5321 Australian dollars)

 (Reporting by Aaditya Govind Rao in Bengaluru; Editing by
Sherry Jacob-Phillips)
 ((Aaditya.GovindRao@thomsonreuters.com;))