Big dip in profit for Mall of Africa’s owner – but dividends are up

Attacq, the development partner in Waterfall City and the majority owner of Mall of Africa, has upped its dividend amid a strong performance.

The group increased its full-year dividend by 16.0% to 58.0 cents per share.

The group reported a net attributable profit for the year ended 30 June 2023 of R658.8 million, down 45% from the R1.2 billion recorded in 2022.

The decline in profit from the previous year is due to lower fair value adjustments on investment properties and derivative financial instruments, it said.

The attributable profit was mainly driven by net profit from property operations, positive fair value adjustments to derivative financial instruments and the fair value of the investment in commercial property investor, MAS, offset by finance costs.

Despite the steep drop in profits, the group said its overall results were solid.

Its distributable income per share – the primary way of measuring the success of real estate investment trusts – jumped by 14.5% to 71.9 cents, it noted.

Occupancy and collection rates in the group remained high at 92.% and 100.7%, respectively, with the group saying it is experiencing record trading density.

Mall of Africa also saw positive retail trade, resulting in a 10.8% growth in rental income for the year, boosted by 21 new brands being introduced at the mall.

Turnover rental thus grew by 91.6%, whilst there was a 71.4% increase in third-party income.

The group is also working on several large developments for the year, such as the increased density at the Plumblink head office and distribution centre and the completion of Phase 2 of Ellipse Waterfall.

“Our balance sheet remains strong, and we are particularly pleased that post the implementation of the GEPF transaction, the group’s loan-to-value (LTV) will reduce to 26%. Our DPS growth of 16.0% is a considerable achievement in the current environment,” Raj Nana, Attacq CFO, said

The group is also working on creating a reliable infrastructure that assists in mitigating local government service delivery challenges, with the area starting several local and global blue-chip industrial office tenants, such as Cisco, Sage, Cotton On, Vantage Data Centre, Pfizer and more.

In addition, the recently launched Attacq Energy initiative aims to implement cost-effective, off-grid and sustainable energy resources, with the group’s ultimate goal of increasing its renewable energy consumption to more than 25% of the total consumption of the energy mix.

Attacq implemented a proactive water management plan to enhance water efficiency and consumption, aiming to decrease the occupancy cost.

“I am exceptionally proud that all of Attacq’s properties are able to operate during load shedding. Our team has displayed resilience throughout the year and is reflective of the inclusive, community and stakeholder-led approach we have fostered internally and externally,” said CEO Jackie Van Niekerk.

The group’s key financials can be found below:

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