Dexus Convenience Retail REIT (ASX:DXC) H1 2025 Earnings: Resilience Amidst Market Volatility

Dexus Convenience Retail REIT (ASX:DXC) reported its half-year results for the period ended December 31, 2024, showcasing resilience amidst market volatility and demonstrating the company's ability to maintain strong financial performance. The company's revenue and net income both increased significantly compared to the same period last year, while earnings per share (EPS) turned positive. This article will delve into the key highlights of the earnings call and analyze the company's performance.



Revenue and Net Income Growth
Dexus Convenience Retail REIT reported revenue of AUD 32.37 million for the half year, a 12.5% increase from the AUD 28.99 million reported in the same period last year. Net income also improved significantly, with the company reporting AUD 5.01 million compared to a net loss of AUD 2.15 million in the first half of 2024. This turnaround in net income reflects the company's ability to adapt to market conditions and maintain profitability.

EPS Improvement
Basic earnings per share (EPS) from continuing operations for the half year was AUD 0.0364, compared to a basic loss per share from continuing operations of AUD 0.0156 a year ago. Diluted EPS from continuing operations also improved to AUD 0.0364, compared to a diluted loss per share from continuing operations of AUD 0.0156 a year ago. This improvement in EPS demonstrates the company's ability to generate value for shareholders.

Dividend Payout and Yield
Dexus Convenience Retail REIT declared a dividend of AUD 0.051 per share for the fourth quarter of 2024, a reduction from the previous quarter's dividend of AUD 0.053 per share. Despite the reduction, the company's dividend yield remains attractive, with a current yield of approximately 7.13% based on the most recent share price of AUD 2.86. The high dividend yield, coupled with a strong payout ratio of approximately 560.44%, indicates that the company is distributing a significant portion of its earnings as dividends.

Comparison with Other REITs
Dexus Convenience Retail REIT's dividend yield of approximately 7.13% is relatively high compared to some of its competitors in the Australian market. For example, Carindale Property Trust (ASX: CDP) has a dividend yield of approximately 5.5%, Waypoint REIT (ASX: WPR) has a dividend yield of around 6.5%, and BWP Trust (ASX: BWP) has a dividend yield of approximately 6.0%. However, the company's high payout ratio may indicate a higher risk of dividend cuts in the future.

In conclusion, Dexus Convenience Retail REIT's H1 2025 earnings call highlights the company's resilience amidst market volatility, with strong revenue and net income growth, and improved EPS. The company's dividend yield remains attractive, although the high payout ratio may pose a risk of future dividend cuts. Investors should monitor the company's financial performance and dividend policy closely to assess the sustainability of its dividend payments.