French mall operator Klepierre raises 2014 forecast


(Adds details, CEO comments)

PARIS, July 21 (Reuters) - French shopping mall operator Klepierre slightly raised its cash flow forecast for the year on Monday on expectations it will benefit from refocusing its portfolio on prime properties in its key markets and lower interest rates.

The company, 28.9 percent owned by Simon Property Group and 21.3 percent by BNP Paribas, said it expected net current cash flow of 2.03-2.05 euros per share this year. Previously it had expected at least 2 euros.

Net rental income at its shopping centres rose 3 percent in the first half of the year on a like-for-like basis, with consumer spending broadly stabilising in Europe.

"What's interesting in this performance is (it's) well spread all over Europe," Chief Executive Laurent Morel told journalists on a conference call.

Despite slowly recovering economies, rents were up 2 percent in France and Italy, up 3 percent in Spain and Portugal, and up 4 percent in Scandinavia, Morel added.

A 9.6 percent fall in payroll expenses and a lower cost of debt helped boost net current cash flow, which reached 1.05 euros per share in the first half, up 2.8 percent from the same period in 2013.

Total first-half revenue fell to 477.7 million euros ($646 million) from 513.7 million a year earlier with net rental income hit by disposals, Klepierre said.

The company has disposed of 2.4 billion euros in assets so far this year as part of a drive to focus its portfolio on its main markets in France and Scandinavia.

Klepierre said its net asset value per share stood at 28.7 euros at the end of the first half, down from 29.3 euros a year ago.

Disposals allowed the company to reduce its debt burden, bringing its loan-to-value ratio, a common measure of leverage at property companies, down to 39.9 percent by the end of the first half. It has since fallen further to 38.4 percent thanks to the sale of several Swedish malls at the start of this month. ($1 = 0.7395 Euros) (Reporting by Leigh Thomas; Editing by James Regan)

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