Property developer Mirvac has suffered a 62 per cent drop in statutory profits as supply chain constraints, labour shortages, inflation and wet weather continued to bite ahead of the arrival of new CEO Campbell Hanan.
But outgoing skipper Susan Lloyd-Hurwitz says the group is in a strong position to navigate the troubled waters ahead.
The continued return to normal business activity post-COVID, resumption in overseas migration and flight to high-quality assets workd in Mirvac's favour, she said on Thursday.
The drop in statutory profit in the six months to December 31, which differs from underlying profit in that it includes exceptional items, was driven in part by lower revaluations of investment property assets as higher interest rates drove down prices.
Mirvac's share price was down at the news, dipping 1.3 per cent to $2.36 by noon.
As wet weather and labour shortages affected delivery schedules, lower settlement rates contributed to a 60 per cent reduction in earnings before interest and tax in residential compared with the previous corresponding period.
Despite only settling 807 residential lots in the first half, Mirvac remained resolute that they would meet their target of over 2,500 lot settlements this financial year.
The company announced a one cent boost to half-year dividend payouts from the previous year, to 5.2c per share.
Meanwhile, Mirvac continued to step up its focus on ongoing asset management, with the completion of their second build to rent (BTR) development at LIV Munro in Melbourne and a further $740 million of BTR assets under construction.
The 24 per cent growth in its managed asset portfolio was a bright spot, pushing operating profits after tax to $305 million from $297 million a year earlier.
Mr Hanan, who is currently head of investment, said the company was well placed to capture demand in an under-supplied housing market.
Their growing portfolio of medium- and high-density developments suited the market's increasing shift away from detached, single-occupancy housing, he said.
When he takes the helm on March 1, Mr Hanan will be in charge of arguably the country's most sustainable developer.
"Some people thought we had our heads in the clouds," Ms Lloyd-Hurwitz told investors about the ambitious goals set under her tenure.
"It's been a remarkable decade in which we've achieved a deep-seated transformation of the company."
Despite some of the most ambitious sustainability targets in the industry, Mirvac achieved net positive scope on and two carbon emissions nine years ahead of schedule and reaffirmed the company's commitment to eliminate scope three emissions and send zero waste to landfill by 2030.
