The Abacus Property Group Ltd (ASX: ABP) share price closed 0.98% lower on Friday after reporting a 16.8% drop in statutory net profit after tax (NPAT) and has opened morning trade lower again, slipping another 4.09% to $3.86 per share at the time of writing.
What were the highlights from Abacus' results?
In its full-year results for the year ended 30 June 2019 (FY19), Abacus reported statutory NPAT down 16.8% on the prior corresponding period (pcp) to $202.7 million.
On an underlying basis, Abacus' profit fell 24.0% on pcp to $139.4 million with a 77% payout ratio to shareholders.
Funds from operations (FFO) fell 23.9% on FY18 numbers to $129.2 million, with FFO per security plummeting 24.2% to 22.28 cents per share (cps).
However, despite lower earnings figures, the Abacus distribution per security climbed 2.8% to 18.50 cps.
There were some positives for the group, with total assets edging 3.9% on pcp to $2.8 billion while its post-placement net tangible assets (NTA) jumped 6.3% to $3.38 billion.
Operationally, Abacus reported 8.4% growth in annual net property rental income to $114.8 million which was headlined by 14.2% rental growth in Abacus' Commercial portfolio largely driven by CBD exposure.
The Aussie property group refinanced over $1 billion of banking facilities throughout the year, extending its average debt duration and reducing its gearing by 810 basis points (bps) to 15.2% at year-end.
Abacus management said it had focused on its Office and Self-Storage segments, and its significant portfolio expansion was a key factor behind its increase in total assets for the year.
Foolish takeaway
While distributions and total assets edged higher for the Aussie property group, the soft earnings numbers have sent the Abacus share price lower.
Abacus reported cashflow from operations (CFO) of $114.2 million in FY19, plummeting 32% on FY18 numbers.
Even the higher NTA numbers were significantly boosted by the company's $250 million institutional placement throughout the year.
Despite the share price losses, the company still boasts a market cap of $2.6 billion and isn't too far off its $4.38 per share 52-week high that it set in late June 2019.
Overall, I believe Abacus' portfolio tilt towards commercial property rather than residential could leave it well-placed to capitalise on lower interest rates throughout the latter part of the year.
