August 20, 2018 / 10:59 PM / 8 months ago

UPDATE 1-Australia's Scentre profit beats forecast on steps to reinvent retail space

(Adds details, guidance, CEO quote)

Aug 21 (Reuters) - Australian shopping mall owner Scentre Group said on Tuesday its underlying half-year profit rose 3 percent, beating analysts’ forecasts as a strategy of revamping assets to offset a slowdown in brick-and-mortar retail paid off.

Funds from operations (FFO), the primary earnings metric of the company, came in at A$657.2 million ($480.81 million), surpassing an average forecast of A$646.6 million compiled by Thomson Reuters I/B/E/S. FFO was A$638.1 million the previous year.

Scentre, the owner of Australian malls branded with the Westfield Corp logo, said it expects FFO growth of about 4 percent for 2018 and distribution per security growth of about 2 percent to 22.16 cents per share.

Like its former owner Westfield, Scentre has been building up non-traditional attractions like cinemas and luxury dining at its malls to juice more rent from tenants and offset the downturn in brick-and-mortar shopping.

Speaking on the company’s increasing focus on diversifying its retail space offerings, Chief Executive Peter Allen said, “We are making excellent progress on our customer-focussed strategy and real-time ability to act on customer feedback.”

“This has enabled us to curate a unique product and service mix in each of our living centres and create places that people want to visit.”

Comparable net operating income grew 2.5 percent compared to 2.6 percent growth last year. ($1 = 1.3669 Australian dollars) (Reporting by Nikhil Kurian Nainan and Devika Syamnath in Bengaluru Editing by Byron Kaye and James Dalgleish)

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