Australand earnings guide 'unchanged'

Australand Property Group has reiterated its earnings guidance for calendar 2008, despite challenging conditions in the property sector and volatile credit markets.

Australand has forecast growth in operating earnings per stapled security of between two to three per cent for the year.

"While our guidance remains unchanged, we are carefully monitoring the situation and will be providing a further update at our half year results," managing director Bob Johnston told shareholders at the company's annual general meeting in Sydney on Thursday.

Mr Johnston said the company had no major debt facilities that needed to be renewed in 2008 and had undrawn facilities of $170 million at the end of 2007.

Australand has two commercial mortgage backed securities and a multi option lending facility maturing in mid-2009.

Chairman Chong Chee Lui said recent market volatility had considerably affected the operating environment in the property sector in the past three months.

"The tightened credit market, combined with the concerns around the weakening economies in the US and Europe, has created a great deal of uncertainty in the market place," he said.

"Whilst this volatility in the debt and equity markets has impacted the entire property industry, Australand's underlying operating businesses remain in good shape, with strong underlying fundamentals supporting the sectors we operate in."

"Suffice to say that Australand is adopting a prudent capital management approach in dealing with the current global economic conditions," he added.

Mr Johnston said the company's balance sheet and debt facilities are well supported by quality assets and robust operating cash flows.

At 31 December 2007, its net interest bearing debt was $1.5 billion, of which 97 per cent was secured over its investment portfolio and development pipeline and 79 per cent hedged against interest rate movement.

"While Australand has no direct exposure to the US sub-prime mortgage crisis, there is no doubt that the operating environment has become more challenging with increased financing costs and weaker business and consumer sentiment," Mr Johnston said.