Stockland Earnings: Short of Expectations but Second-Half Skew Should Make Up the Ground

Stockland’s half-year result fell short of our expectations, with funds from operations of AUD 0.11 per security well below halfway to our full-year estimate of AUD 0.33 per security. The commercial portfolio of offices, retail, and industrial performed robustly, on average, but Stockland only delivered 1,614 residential settlements versus our full-year estimate of 5,450. Another 5,400 lots in development should support full-year settlements close to our forecast. Even if there is slippage, we think it would be timing-related, with profits slipping into fiscal 2025 immaterial to our valuation.