Attacq reports double-digit decline in full-year HEPS

Attacq, a listed real estate investment firm and owners of the prestigious Mall of Africa, are marking their tenth year as a JSE-listed company with a mix of celebration and strategic planning. The company recently disclosed their full-year earnings for the period ending in June, showcasing a 14.5% increase in their Distributable Income Per Share. Despite a tough and challenging operating environment marked by load shedding, interest rates, inflation, and infrastructure decay, Attacq managed to maintain a positive trajectory with an impressive 92.5% occupancy rate and robust collection rates. These figures highlight the resilience and strategic decision-making of the company in navigating turbulent waters. Jackie van Niekerk, the CEO of Attacq, shed light on the performance metrics during a CNBC Africa interview. Van Niekerk emphasized the operational strength demonstrated by the company despite the daunting external factors. He praised the dedication of the Attacq team in driving operational excellence and delivering commendable outcomes from the company's assets. 1. Strong Retail Performance: Attacq's retail segment emerged as a standout performer, with a remarkable 12% growth in trading density. The crown jewel of their retail portfolio, the Mall of Africa, excelled with a staggering 17% increase in trading density. Van Niekerk attributed this success to the introduction of 10 new brands in the Mall, contributing to a 10% growth in income. These positive metrics signify Attacq's dominance in the retail space and its ability to resonate with consumers despite economic challenges. However, the office market presented a contrasting picture, grappling with subdued demand and oversupply issues, reflecting the changing dynamics of workspace post-COVID. 2. Proactive Cost Management: The escalating property expenses, up by nearly 13%, posed a significant challenge for Attacq. Van Niekerk illustrated the analogy of managing properties akin to monitoring milk on a stove, underscoring the need for constant vigilance. The surge in property expenses was largely fueled by diesel costs due to load shedding. To counter this, Attacq is implementing proactive measures such as installing controllers to optimize diesel usage during off-peak times. The focus on building efficiency and cost containment measures reflects the company's commitment to sustainable operations. 3. Strategic Partnerships and Future Outlook: A pivotal moment for Attacq was the partnership with the GEPF, resulting in a substantial investment and a 30% equity stake for the pension fund. This strategic move enables Attacq to reduce its debt, with post-transaction gearing projected to decrease to 25%. The enhanced financial flexibility will facilitate further development initiatives, especially in Waterfall City and other precincts across South Africa. The partnership serves as a financial cushion against economic uncertainties characterized by rising interest rates and inflation. Looking ahead, Van Niekerk expressed a cautiously optimistic view on the future despite acknowledging the persistent challenges in the South African macroeconomic landscape. The impending elections and the imperative need for infrastructure development were highlighted as crucial factors for stimulating economic growth. The CEO stressed the importance of government commitment to infrastructure projects, particularly in the energy and water sectors, to address critical concerns affecting the country's development. In conclusion, Attacq's robust performance in the face of adversities underscores their strategic acumen and operational dexterity. The company's prudent cost management, focus on key growth areas, and strategic partnerships position them well to navigate the complex economic landscape and seize growth opportunities in the future.