(Reuters) – British mall operator Hammerson reported an improvement in adjusted earnings for the first half compared with a crisis-hit 2020, but warned on Thursday that footfall was yet to rebound to levels seen before the pandemic.
Hammerson, like other mall operators that are heavily exposed to non-essential retail tenants, was battered by months of COVID-19 lockdowns over the past year and a half.
With rents still behind pre-pandemic levels, the industry is facing a tough outlook after the British government extended a ban on commercial evictions until March 2022, while some regions like France are reimposing restrictions amid new virus variants.
Hammerson and its rival British Land have said they will no longer give rent concessions to tenants.
Hammerson’s IFRS loss narrowed to 376 million pounds ($523 million) for the six months through June compared with 1.09 billion a year earlier, while adjusted earnings improved to 20.1 million pounds from 17.7 million.
Before the health crisis, the company, which runs shopping malls such as the Bullring in Birmingham and Italie Deux in Paris, had reported 107.4 million pounds in adjusted earnings and a loss of 319.8 million pounds on an IFRS basis.
Hammerson exited the UK retail park sector earlier this year, selling seven sites to Brookfield Asset Management for 330 million pounds to shore up its finances after the crisis pushed it to a 1.7 billion pounds loss for 2020.
Its EPRA net tangible assets per share, a key metric for the sector, fell 16% to 69 pence as footfall was averaging 75% of 2019 levels.
Shares of the company, a member of the FTSE 250 index of mid-sized companies, fell 2.5% by 0730 GMT.
JP Morgan analysts noted that the net asset value decline of 6% was a slower pace than the previous year, adding investors would be looking for progress on potential French disposals.
Hammerson Chief Executive Rita-Rose Gagné said: “We are focused on continuing to de-lever the balance sheet through disposals of non-core assets, creating a leaner and more agile organisation.”
($1 = 0.7189 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Ramakrishnan M. and David Holmes)