EANS-Adhoc: ECO Business-Immobilien AG
First quarter results for 2009
influenced by impairment charges - portfolio optimisation leads to reduction in
net debt and strengthening of liquidity
ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide distribution. The issuer is solely responsible for the content of this announcement.
20.05.2009
ECO Business-Immobilien AG: First quarter results for 2009 influenced by impairment charges - portfolio optimisation leads to reduction in net debt and strengthening of liquidity
Vienna, 20 May 2009. ECO Business-Immobilien AG (Vienna Stock Exchange / Prime Market: ECO) implemented numerous measures during the first quarter of 2009 to optimise its portfolio and balance sheet structure, and thereby prepare for a continuation of the market downturn. The sale of 48 properties with a total value of EUR 195.0 million strengthened the clear focus on the core segment of business properties. It also released liquidity and improved the company´s equity structure: the equity ratio rose from 34% at the end of 2008 to 38% as of 31 March 2009. Profit for the period was negative at EUR -9.8 million (1-3/2008: EUR 8.7 mill.) as the result of impairment charges recognised to the property portfolio (EUR -14.9 mill.).
Rental revenues for the first quarter of 2009 amounted to EUR 16.5 million and fell only 10% short of the comparable prior year level (EUR 18.3 mill.) despite a significant number of property sales. Due to the continuing standstill on the transaction market and the sale of properties at their IFRS carrying value, income from the disposal of non-current assets reached only EUR 5,000 and was unable to make a major contribution to earnings (1-3/2008: EUR 2.8 mill.).
As a consequence of the difficult operating environment on the office and retail property market and a lack of reference transactions in this segment, the valuation of the property portfolio by independent experts resulted in impairment charges of EUR 14.9 million for the first quarter of 2009. Accordingly, operating profit (EBIT) fell from EUR 19.4 million in the first quarter of 2008 to EUR -6.2 million for the reporting period.
In contrast, financial results improved from EUR -10.9 million to EUR -6.5 million in the first quarter due to a lower level of interest rates and reduced financing volume. Profit before tax declined from EUR 8.5 million in the first three months of 2008 to EUR -12.7 million for the reporting period. Profit after tax equalled EUR -9.9 million, versus EUR 7.2 million in the comparable prior year period.
Funds from operations (FFO) totalled EUR -12.2 million for the first quarter of 2009 (1-3/2008: EUR 4.2 mill.) as a result of property sales that were closed below the historical acquisition cost because of the current market environment.
The balance sheet total declined from EUR 1.1 billion as of 31 December 2008 to EUR 930.5 million at the end of the reporting period. The sale of properties allowed ECO to improve the equity ratio and decrease liabilities. This led to a substantial reduction in net debt from EUR 701.6 million at year-end 2008 to EUR 543.7 million as of 31 March 2009. The equity ratio rose from 34% at the end of 2008 to 38% as of 31 March 2009. The loan-to-value ratio (LTV) equalled 60.6%. Non-current liabilities decreased from EUR 470.8 million on 31 December 2008 to EUR 402.6 million. Current liabilities also declined substantially from EUR 267.7 million to EUR 172.2 million. Net asset value (NAV) per share decreased from EUR 12.54 to EUR 10.31, above all due an increase in impairment charges over the comparable prior year period.
The ECO property portfolio comprised 71 objects with a total value of EUR 892.8 million at the end of the first quarter of 2009 (EUR 1,074 million at the end of 2008). Nearly all these investments (96%) are located in the core markets of Austria and Germany. Activities during the reporting period concentrated on the optimisation of the portfolio through the sale of selected properties as well as measures to improve the equipment, structure and management of the individual objects.
ECO´s goal is to maintain a stable level of occupancy in their investment properties, and thereby hold rental income at a steady level. In comparison with 2008, ECO expects a continuous improvement in the equity ratio. Lower interest rates will provide relief in the financing area, and financial results should presumably improve during the course of the year. ECO expects the market environment will remain difficult and, for this reason, further impairment charges to the property portfolio cannot be excluded.
Selected Company Data in accordance with IFRS
1-3/2009 1-3/2008 Revenues (TEUR) 16,523 18,303 Thereof rental income (TEUR) 13,444 15,232 Income from the disposal of non-current assets (TEUR) 5 2,748 Net gain/(loss) from changes (TEUR) -14,888 5,700 in the fair value of investment properties Operating profit (EBIT)(TEUR) -6,193 19,350 Profit before tax (EBT)(TEUR) -12,679 8,453 Profit after tax (after minority interests)(TEUR) -9,828 8,694
Earnings per share (EUR) -0.29 0.25 Weighted average number of shares 34,100,000 34,100,000
FFO (funds from operations) (TEUR) -5,694 15,209 before interest and tax, incl. impairment charges 1) Cash earnings (FFO - funds from operations)(TEUR) -12,191 4,234 after interest and tax 2) NAV per share (EUR) 10.31 12.54
1) EBIT + depreciation and amortisation +/- fair value adjustments +/- impairment charges 2) EBIT + depreciation and amortisation +/- fair value adjustments +/- impairment charges - financial results - income taxes paid
Balance Sheet Data
Consolidated balance sheet - summary in TEUR
31/03/2009 31/12/2008
Non-current assets 903,679 1,085,709
Thereof investment properties 861,545 981,890
Thereof properties under construction 31,247 40,421
Thereof properties available for sale 0 51,881
Current assets 26,788 27,904
Total assets 930,467 1,113,614
Equity and reserves 355,642 375,113
Thereof minority interests 3,979 6,918
Non-current liabilities 402,601 470,846
Current liabilities 172,224 267,654
Total equity and liabilities 930,467 1,113,614Property Data
31/03/2009 31/03/2008
Number of objects 71 126
Thereof investment portfolio 69 72
Thereof trading portfolio 0 46
Thereof development projects 2 8
Rentable space in m²* 580,800 671,500
Thereof trading portfolio 0 42,600
Thereof development projects 20,900 53,100
Garage spaces (number) 3,060 3,470
Thereof trading portfolio 0 280
Thereof development projects 90 230
Property assets (in TEUR) 892,792 1,244,601
Thereof properties under construction 31,247 38,597
Thereof trading portfolio 0 58,195* Garage spaces were included at 20 m² each / parking areas included
end of announcement euro adhoc
Further inquiry note:
ECO Business-Immobilien AG
Friedrich Scheck, CEO
Tel.: +43 1 580 88 12
mailto:scheck@eco-immo.at
Peter Pechar
Head of Investor Relations
Tel.: +43 1 580 88 35
mailto:pechar@eco-immo.at
Hochegger Financials
Roland Mayrl
Tel.: +43(1) 504 69 87-331
mailto:r.mayrl@hochegger.com
Branche: Real Estate
ISIN: AT0000617907
WKN: A0D8RY
Index: Prime.market
Börsen: Wien / Regulated free trade