Dividend up 103%, but Scentre Group (ASX:SCG) share price down. What gives?

Shares in Scentre Group on the move today as the company released its financial results for the half-year ended 31 December 2021.

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Key points

  • Scentre Group reported its full-year earnings today 
  • It was a period of profits and gains, although the Scentre Group share price trimmed gains in early trading today 
  • In the last 12 months, the Scentre Group share price has gained 5% 

Shares in Scentre Group (ASX: SCG) are on the move today after the company released its financial results for the full-year ended 31 December 2021.

At the time of writing, the Scentre Group share price is trading in the red at $3.015 apiece.

Scentre Group share price tanks amid earnings growth

Key takeouts from the company's earnings results today include:

  • Operating profit of $845.8 million (16.32 cents per security, up 10.9%)
  • Funds From Operations (FFO) for the year was $862.5 million (16.64 cents per security, up 12.7%)
  • Statutory result for the full year, inclusive of unrealised non-cash items was $887.9 million, up from ($3,731.8) million
  • Net operating cash flows (after interest, overheads and tax) were $913.6 million, an increase of 24.8% per security on 2020
  • Distribution of $738.7 million for the year equates to 14.25 cents per security, a growth of 103.6% on 2020.

What else happened this period for Scentre Group?

Scentre Group say's that its investment in Westfield Mt Druitt is "progressing well". Today's release notes that the $55 million rooftop entertainment, leisure and dining precinct is fully leased and on track to open next month. Scentre Group has a $28 million share in the venture.

The group has also commenced a $33 million investment at Westfield Penrith. It says the project will result in "a large-format entertainment offer and upgrades and additions to the centre's vertical transport systems".

Operating profits also came in at over $845 million for the year, a gain of 11%, whereas FFO recognised a 13% spike from the previous year to $826 million.

Although with this result, net operating cash flows were nearly 25% per security higher on the year and represented $913.6 million from the 12 months to 31 December 2021.

Impressively, the company distributed a total of $787.7 million or 4.25 cents per security, which represented a growth of 103.6% on the previous year.

Management commentary

Speaking on the announcement, Scentre Group CEO Peter Allen said:

I am very pleased with the Group's performance. Our team delivered better results in 2021 than 2020, even with more COVID-19 restrictions. This demonstrates our proactive approach to generating long term value for our securityholders. We have positioned the Group for growth for many years to come. We are focused on the customer, leveraging the strengths of our leading platform and pursuing our ambition to grow by becoming essential to people, communities and the businesses that interact with them.

What's next for Scentre Group?

The company says it is focused on "driving customer visitation, engagement and occupancy in order to deliver earnings growth in 2022 and future years".

As such, it expects to distribute at least 15 cents per security in 2022, which would signify approximately 5% growth.

"Earnings are expected to grow at a higher rate in 2022" the company says, and it also notes that it remains on track to achieve at least 50% of its net zero target by 2025.

Scentre Group share price snapshot

In the last 12 months, the Scentre Group share price has gained 5% but is down just over 45 this year to date. It has curled back up in the past month of trading and is also in the green during the past 5 days.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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