ECO Business-Immobilien AG

euro adhoc: ECO Business-Immobilien AG
Financial Figures/Balance Sheet
ECO Business-Immobilien AG: Stable revenues - earnings negatively affected by revaluation losses

-------------------------------------------------------------------------------- Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement. -------------------------------------------------------------------------------- 25.11.2008 ECO Business-Immobilien AG: Stable revenues - earnings negatively affected by revaluation losses Vienna, 25 November 2008. ECO Business-Immobilien AG, which is traded in the Prime Market segment of the Vienna Stock Exchange, recorded an increase in revenues for the first nine months of 2008. However, the financial crisis had a negative effect on the development of earnings. Revenues rose by 55% to EUR 55.4 million, but profit for the period was negative at EUR -16.8 million (1-9/2007: EUR 20.2 mill.) above all due to market-related impairment charges of approx. 2% to the value of the property portfolio. Net cash earnings (FFO after interest and taxes, incl. impairment charges) were positive at EUR 6.0 million in spite of the challenging environment. Revenues increased year-on-year to EUR 55.4 million for the first three quarters of 2008. This growth was driven above all by acquisitions made in the prior year and the effective asset management of investment properties. The transaction market for business properties came to a virtual standstill during the third quarter. Against the backdrop of this operating environment, ECO recorded gains of EUR 3.6 million on the sale of properties during the first nine months of this year (1-9/2007 EUR 6.0 mill.). The proceeds on sale exceeded the relevant IFRS values by 25.8%. The market-related impairment charges to the portfolio and exceptional expenses related to the cancellation of a property transaction during the second quarter of 2008 led to a decline in profitability indicators in relation to the comparable prior year period. Operating profit (EBIT) totalled EUR 7.5 million for the first three quarters of 2008, compared with EUR 40.8 million in the first three quarters of 2007. Financial results were negative at EUR -32.9 million because of the higher volume of financing. Profit before tax (EBT) declined to EUR -25.4 million and profit after tax fell to EUR -18.7 million (1-9/2007: EUR 20.4 mill.). FFO (funds from operations), which exclude revaluation gains and exceptional non-cash effects, also reflect the increase in interest rates and financing volume that have taken place during the past year. Net cash earnings (FFO after interest and taxes, incl. impairment charges) were still clearly positive at EUR 6.0 million (1-9/2007: 13.4 mill.). The operational development of the company had a clearly positive effect, and supported a strong improvement in FFO before interest and taxes from EUR 27.4 million in the comparable prior year period to EUR 39.0 million. The equity ratio equalled 36% and the loan-to-value ratio (LTV) 63% as of 30 September 2008. Loans from banks and insurance companies amounted to EUR 685 million at the end of the reporting period, whereby roughly one-third was hedged against fluctuations in interest rates. The average interest rate was 5.60% for the reporting period. Net asset value (NAV) per share declined from EUR 12.04 at the end of September 2007 to EUR 11.83, in particular as a result of the above-mentioned impairment charges. Adjusted NAV equalled EUR 12.06 per share. The ECO property portfolio covered 123 objects with a combined value of EUR 1.1 billion as of 30 September 2008. Activities in the third quarter of this year also focused on the optimisation of the existing ECO properties and the completion of development projects. The successful implementation of these effective asset management programmes was reflected in a decline in the vacancy rate from the June 2008 level. In other words, the impairment losses recognised for the reporting period were in no way related to the operational performance of the ECO property portfolio. The future development of financial markets and the resulting effects on the real economy are difficult to predict at the present time. ECO therefore expects the market environment will remain challenging during the last three months of this year. Based on the development of business during the third quarter, the Management Board assumes that revenues and earnings for 2008 will fall substantially below the prior year level. These results will not reflect the steady improvement in rental income, but will be caused above all by a lack of positive revaluation results. Current developments also indicate that negative earnings for the full year cannot be excluded due to the possible recognition of additional impairment losses. However, cash earnings are expected to be positive for 2008. Company Data in accordance with IFRS 01-09/2008 01-09/2007 Revenues 55,424 35,818 Thereof rental income 45,838 29,369 Gain on the disposal of non-current assets 3,600 5,973 Net gain from fair value adjustments -23,638 13,487 Operating profit (EBIT) 7,452 40,833 Profit before tax (EBT) -25,419 27,303 Profit after tax (after minority interests) -16,807 20,149 Earnings per share -0.49 0.73 Weighted average number of shares outstanding 34,100,000 27,730,000 FFO (funds from operations) before interest and taxes, incl. impairment charges 1) 38,982 27,364 Cash earnings (FFO - funds from operations) after interest and taxes incl. impairment charges 2) 5,981 13,379 NAV (net asset value) per share 11.83 12.04 1) EBIT + depreciation and amortisation +/- fair value adjustments 2) EBIT + depreciation and amortisation +/- fair value adjustments - financial results - income taxes paid Property Data 30/09/2008 30/09/2007 Number of objects 123 116 Thereof investment portfolio 72 61 Thereof trading portfolio 45 52 Thereof development projects 6 3 Total rentable space in m² * 666,200 506,600 Thereof trading portfolio 42,100 46,500 Thereof development projects 46,000 25,500 Garage spaces (number) 3,570 2,490 Thereof trading portfolio 270 290 Thereof development projects 230 60 Property assets (in TEUR) 1,094,828 755,173 Thereof construction in progress 46,301 30,488 Thereof trading portfolio 57,539 61,803 * Garage spaces were included at 20 m² each This release contains forward-looking estimates and statements that were made on the basis of the information available at this time. These forwardlooking statements are usually described in terms such as "expect", "estimate", "plan", "reckon", "assume", "should", "supposed to", "can", etc. Forward-looking statements reflect the point of view at the time they are made. ECO would like to point out that the actual circumstances and, consequently, the actual results realised at a later date may differ from the forecasts presented in this report for a variety of reasons. end of announcement euro adhoc -------------------------------------------------------------------------------- ots Originaltext: ECO Business-Immobilien AG Im Internet recherchierbar: http://www.presseportal.ch Further inquiry note: ECO Business-Immobilien AG Friedrich Scheck Chief Executive Officer Tel.: +43(1)535 21 99-12 mailto:scheck@eco-immo.at Peter Pechar Head of Investor Relations Tel.: +43(1)535 21 99-35 mailto:pechar@eco-immo.at Hochegger Financials Roland Mayrl Tel.: +43(1) 504 69 87-31 mailto:r.mayrl@hochegger.com Branche: Real Estate ISIN: AT0000617907 WKN: A0D8RY Index: Prime.market Börsen: Wiener Börse AG / Regulated free trade

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