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Simon reports lower quarterly profit, higher revenue

January 29, 2016
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Indianapolis-based Simon Property Group Inc. on Friday morning reported lower profit in the fourth quarter but still posted strong earnings for the entire year.

The nation’s largest mall owner said funds from operations in the quarter ended Dec. 31 fell 3.4 percent. FFO, a measure of cash flow for real estate investment trusts, dipped to $866.5 million, or $2.40 per share, compared with $896.7 million, or $2.47 per share, in the year-ago period.

The results, however, were in line with analyst expectations of $2.40 per share.

Fourth-quarter 2015 results included a loss on the prepayment of debt of $121 million, or 33 cents per share.

Profit for the fourth quarter dropped to $392.3 million, or $1.27 per share, compared with $405 million, or $1.30 per share, in the prior year period.

Revenue grew 6.4 percent, to $1.4 billion, meeting analysts’ expectations.

Occupancy in Simon malls dipped to 96.1 percent in December, down from 97.1 percent at the end of 2014. Sales per square foot increased from $619 to $620. Average rents also grew, to $48.96 per square foot, up from $47.01 in the fourth quarter of the previous year.

For the entire year, funds from operations grew to $3.6 billion, or $9.86 per share, compared with $3.2 billion, or $8.90 per share, in 2014.

Profit increased to $1.8 billion, or $5.88 per share, compared with $1.4 billion, or $4.52 per share, in the prior year.

Revenue also grew, by 8.1 percent, to $5.3 billion.

For 2016, Simon forecast profit in the range of $5.95 per share to $6.05 per share.

It also declared a quarterly dividend of $1.60 per share, a year-over-year 14.3 percent increase, to be paid on Feb. 29.

Simon shares closed Thursday at $186.79 each, down from a 52-week high of $208.14.
 

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