BENGALURU: Hammerson lost 1.7 billion pounds ($2.4 billion) in 2020 as the coronavirus crisis knocked the value of its malls, prompting immediate asset sales and a longer-term debt warning.
The British mall operator said on Friday its net rental revenue had almost halved and it had so far collected 76% of last year’s rents as the COVID-19 pandemic hit retail tenants.
But shares in Hammerson were up 5.7% at 0830 GMT after it said it had made 73 million pounds selling the Brent South Shopping Park and its stakes in two French joint ventures.
While Hammerson said it would meet its liabilities at least for the next 12 months, it warned about the impact of the coronavirus on the retail sector and broader economy.
“More adverse outcomes relative to those assumed in the scenario modelling, could result in breaches in the Group’s unsecured gearing and interest cover ratio covenants,” the company said in a statement.
Hammerson’s combined credit score, a measure of how likely a company is to default in the next year on a scale of 100 (very unlikely) to 1 (highly likely), was “4” as of Friday, data from Refinitiv Eikon showed.
The company, which has a market capitalisation of 1.32 billion pounds, said it had reduced its net debt by 609 million pounds to 2.23 billion pounds.
Retail to lag
British shopping centres are set to be fully operational by mid-May under phased exit plan from restrictions which have kept shoppers at home and led to widespread retail rent deferrals.
Hammerson expects the retail recovery to lag the broader British economy given it was struggling with a shift to online shopping and high costs even before the pandemic.
“2021 (is) all about disposals: Disposals will be necessary to lower its LTV (loan-to-value) of 46%,” JP Morgan analysts wrote in a note after Hammerson’s results were released.
The crisis proved the final straw for former competitor Intu last year, pushing it into administration.
Hammerson’s total portfolio, including premium outlets, fell 24% in value to 6.34 billion pounds during 2020.