Seritage Growth Properties (SRG) saw its loss widen to $15 million, or $0.48 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $4.04 million, or $0.13 a share. Revenue during the quarter grew 11.24 percent to $66.20 million from $59.51 million in the previous year period.
Cost of revenue rose 11.81 percent or $1.79 million during the quarter to $16.91 million. Gross margin for the quarter contracted 13 basis points over the previous year period to 74.45 percent.
Total expenses were $77.03 million for the quarter, up 47.20 percent or $24.70 million from year-ago period. Operating margin for the quarter stood at negative 16.37 percent as compared to a positive 12.06 percent for the previous year period.
Operating loss for the quarter was $10.84 million, compared with an operating income of $7.18 million in the previous year period. However, the adjusted EBITDA for the quarter stood at $45.32 million compared with $47.77 million in the prior year period. At the same time, adjusted EBITDA margin contracted 1181 basis points in the quarter to 68.46 percent from 80.27 percent in the last year period.
Revenue from real estate activities during the quarter increased 11.24 percent or $6.69 million to $66.20 million.
Income from operating leases during the quarter rose 9.78 percent or $4.43 million to $49.68 million. Revenue from tenant reimbursements was $16.51 million for the quarter, up 15.86 percent or $2.26 million from year-ago period.
"In just 18 months, we have established Seritage as one of the most active developers of retail real estate in the country with 48 projects, representing a total investment of over $460 million, completed or commenced," said Benjamin Schall, president and chief executive officer. "For the 33 projects weve initiated fully on our platform, we are expecting incremental returns in excess of 12% on an unlevered basis, and project stabilized income of almost $70 million, an increase of over 330% versus in-place income. And once completed, more than 90% of the income from these 33 projects will be derived from a diverse group of growing retailers, and less than 10% from Sears Holdings. As we look to 2017, we have a strong pipeline of leasing and redevelopment activity that we’re focused on executing, and expect to realize rental spreads and returns on capital for that pipeline that are consistent with those that we’ve achieved thus far. We continue to see strong demand for our well-located properties from a range of growing retailers, and are energized to build off our momentum as we diversify our tenant base, grow net operating income and create value for our shareholders."
Real estate investments were almost stable over the past one year at $425.02 million on Dec. 31, 2016.
Total assets stood at $2,712.24 million as on Dec. 31, 2016. On the other hand, total liabilities were at $1,287.93 million as on Dec. 31, 2016.
Return on assets was at 0.38 percent in the quarter. Return on equity was negative at 1.05 percent in the quarter.
Debt moves up marginally
Total debt was at $1,166.87 million as on Dec. 31, 2016, up 2.14 percent or $24.45 million from year-ago. Shareholders equity was at $1,424.31 million as on Dec. 31, 2016. Meanwhile, debt to equity ratio was at 0.82 percent in the quarter.
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