CBL Properties on Tuesday reported that second quarter earnings rose not just over the lock down period of a year ago but that sales were higher at nearly all of its malls than in 2019.
Funds from operations in the three months ending June 30 were 39 cents per share, up sharply from 2 cents per share for the same time in 2020 when the coronavirus hit its business operations, the Chattanooga-based shopping center company reported.
“Shopping at the mall is back,” said Stephen Lebovitz, the company’s chief executive officer, in a statement. “The combination of pent-up demand, stimulus checks, positive consumer sentiment and cabin fever led to a rebound in sales across our portfolio over the last few months.”
The increase in FFO, as adjusted, as compared with the prior year period is principally a result of 15 cent per diluted share lower net interest expense and a 17 cent per diluted share positive variance in the estimate for uncollectable revenues, rent abatements and write-offs for past due rents, according to CBL.
The decline in net interest expense was primarily due to post-bankruptcy petition interest expense payments that are not required to be made on the senior unsecured notes and secured credit facility subsequent to the company’s filing on Nov, 1, 2020, the company reported.
The positive variance in the estimate for uncollectable revenues, abatements and write-offs for past due rents was primarily a result of the tenant accommodations that were made in the prior-year period due to the impact of the pandemic, according to CBL.
Sales for the second quarter grew 22.3% as compared with the second quarter 2019, the company reported. Also, total portfolio same-center net operating income increased 18.5% for the most recent quarter.
Lebovitz said that traffic at its centers is approaching pre-pandemic levels.
“This recovery benefited second quarter results, with percentage rents and short-term income trending above expectations,” he said. “Preliminary reports on back-to-school are positive, which bodes well for the holiday sales season. Even with inflation pressures, we kept expenses, as well as capital expenditures, in check.”
He noted that the U.S. Bankruptcy Court in Houston approved its reorganization plan last week and that CBL is eyeing a Nov. 1 exit.
“The entire CBL organization is excited about our future,” Lebovitz said. “The balance sheet and cash flow flexibility CBL will enjoy positions us to implement our redevelopment strategy, as well as pursue new growth opportunities. We are energized by these opportunities and CBL’s future prospects.”