Why this global property company's shares crashed 20% lower today

The Unibail-Rodamco-Westfield (ASX:URW) share price has come under pressure on Friday. Here's what you need to know…

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The worst performer on the S&P/ASX 200 Index (ASX: XJO) on a volatile day of trade has been the Unibail-Rodamco-Westfield (ASX: URW) share price.

The shopping centre owner and operator's shares were down 20% at one stage. They eventually finished the day 14% lower at $6.39. This was despite the Herculean rebound in the ASX 200 in late afternoon trade.

a woman

Why did the Unibail-Rodamco-Westfield share price crash lower?

Unibail-Rodamco-Westfield share price decline today had less to do with the broad market selloff and more to do with the release of its full year results.

For the 12 months ended December 31, the company reported a net operating result of €118.5 million and a net profit of €87.8 million. The latter was down 53% from €187.9 million in the prior corresponding period.

On a per share basis, earnings came in at €0.37 per share, down from €1.20 per share the previous year.

The Gross Market Value (GMV) of the company's assets at the end of the period amounted to €15.2 billion on a proportionate basis. This was up slightly from €14.9 billion a year ago.

However, its Shopping Centre GMV was €14.8 billion, down by €199 million or 1.6% on a like-for-like basis.

Management advised that this decrease was the result of a yield impact of -3.7%, partly offset by a positive rent impact of +2.1%. The average Net Initial Yield (NIY) of its Shopping Centre portfolio at the end of December was 4.1%.

Management commentary.

Following the release of its full year market update last month, CEO Christophe Cuvillier, commented: "The retail environment remains challenging, but URW's high quality portfolio saw a very strong +3.7% growth in Group tenant sales. This, with the exceptional work of our teams, drove LfL NRI growth of +3.1% in Continental Europe, and comparable NOI up by +5.4% in our US Flagships."

"The Group remains soundly positioned for the future. We will continue the execution of our strategy of concentration, differentiation and innovation and a disciplined approach to the allocation of capital and deleveraging."

"The integration of Westfield is running according to plan, having already achieved €99 Mn of cost and revenue synergies, and we have extended to the UK and the US our widely recognised and industry leading CSR strategy, Better Places 2030. AREPS will continue to be impacted in the near term by the disposal of assets, but our 5-year Business Plan implies underlying operational growth of +3% to +5%," he concluded.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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