Stockland Earnings: Income Skewed to the Second Half; Mild Valuation Increase on Coverage Transfer

We transfer coverage of Stockland, with an unchanged fiscal 2025 funds from operations forecast of AUD 33.4 cents per security, around the middle of the reaffirmed management guidance of AUD 33.0 cps-AUD 34.0 cps. In the first half of fiscal 2025, Stockland reported FFO per security of AUD 10.5 cents, down 6% from the same period last year, and about 30% of our full-year forecast and management target. Due to the timing of masterplanned communities, or MPC, settlements, we expect earnings to materially skew to the second half of the fiscal year. Half-year distributions were AUD 8 cps and we forecast Stockland will pay out 75% of FFO for the full year, equivalent to AUD 25 cps.