Empire Co adjusted profit boosted by real estate

Tue Mar 13, 2012 11:10am EDT
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(Reuters) - Empire Co Ltd EMPa.TO, parent of Sobeys, Canada's No. 2 grocer, reported higher adjusted quarterly earnings on Tuesday, helped by its real estate investments.

Sobeys' contribution to adjusted earnings, excluding minority interests, was little changed from the same quarter last year, at C$65.5 million ($66.1 million), compared with C$65.4 million.

But Empire's other operations contributed C$6.7 million, versus C$3.0 million a year earlier. Earnings were helped in part by higher revenue from Empire's investment in Crombie Real Estate Investment Trust (CRR_u.TO: Quote).

Last month, Crombie reported a 5.4 percent rise in property revenue for the quarter ended December 31. For the entire year, Crombie said it provided a total unitholder return of more than 17 percent.

The REIT invests in income-producing retail, office and mixed-use properties in Canada, and owns a portfolio with commercial properties in eight provinces.

Empire said earnings were also helped by higher average selling prices on residential lots. The company has a stake in Genstar, which is primarily a residential developer.

Net income for the quarter ended February 4 fell to C$80.0 million, or C$1.17 a share, from C$88.9 million, or C$1.31, a year earlier. But adjusted earnings rose to C$72.2 million, or C$1.06 a share, from C$68.4 million, or C$1.01 a share.

Analysts, on average, had expected earnings of C$1.10 a share, according to Thomson Reuters I/B/E/S.

Sales rose 2.8 percent to C$3.98 billion. Sales at established Sobeys stores, a key measure for retailers, rose 1.2 percent.   Continued...