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ECO Business-Immobilien AG

EANS-Adhoc: ECO Business-Immobilien AG
positive operating earnings and trend reversal in valuation

  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.
23.11.2009
ECO Business-Immobilien AG: positive operating earnings and trend 
reversal in valuation
Vienna, 23 November 2009. ECO Business-Immobilien AG (Vienna Stock 
Exchange / Prime Market: ECO) carried out a re-dimensioning programme
during the first nine months of 2009 as a reaction to the economic 
and financial crisis. The optimisation of the portfolio through the 
sale of individual properties led to a substantial reduction in net 
debt and an increase in the equity ratio to 41.5%. Following a trend 
reversal in valuations during the third quarter of this year, EBIT 
for the period 1-9/2009 was clearly positive at EUR 5.3 million 
(1-9/2008: EUR 7.5 million).
ECO recorded rental income of EUR 38.2 million for the first three 
quarters of 2009. As expected, this figure was lower than the 
comparable prior year period (EUR 45.8 million) due to the sale of 
portfolio objects. Income from the disposal of non-current assets 
fell to EUR 0.3 million (1-9/2008: EUR 3.6 million) because the 
proceeds from the sale of properties only exceeded the IFRS carrying 
values by a slight margin.
The third quarter brought a turnaround in the valuation trend. After 
the recognition of impairment charges totalling EUR -25.3 million in 
the first half of this year, the valuation of the ECO property 
portfolio by independent experts showed an increase of EUR 6.8 
million for the third quarter. Revaluation results for the first nine
months of 2009 amounted to EUR -18.6 million, which represents an 
improvement over the comparable prior year figure of EUR -23.6 
million. Earnings before interest and taxes (EBIT) were clearly 
positive despite the non-cash charges from the first six months and 
totalled EUR 5.3 million for the reporting period (1-9/2008: EUR 7.5 
million). Earnings before interest, taxes, depreciation and 
amortisation (EBITDA) equalled EUR 23.8 million for the first three 
quarters (1-9/2008: EUR 31.1 million).
A reduction in debt and generally lower interest rates supported an 
improvement in financial results to EUR -16.0 million (1-9/2008: EUR 
-32.9 million). Profit before tax equalled EUR -10.7 million, which 
represents a substantial improvement over the prior year (1-9/2008: 
EUR -25.4 million). Profit after tax amounted to EUR -8.3 million, 
compared with EUR -18.7 million in the first nine months of 2008.
The sale of properties by ECO during the reporting period was 
responsible for a decline in the balance sheet total from EUR 1.1 
billion at the end of 2008 to EUR 855.9 million as of 30 September 
2009. The reduction of liabilities supported an improvement in the 
equity ratio from 33.7% at the end of 2008 to 41.5% as of 30 
September 2009, and also reduced net debt from EUR 701.6 million at 
year-end 2008 to EUR 466.3 million. The loan-to-value (LTV) ratio was
57.3% at the end of September 2009. Cash and cash equivalents rose 
from EUR 14.6 million on 31 December 2008 to EUR 18.5 million as of 
30 September 2009. Net asset value (NAV) per share equalled EUR 10.37
at the end of September 2009, compared with EUR 10.80 on 31 December 
2008.
ECO concentrated on property sales and selected redevelopment 
projects during the first nine months of 2009. The streamlined ECO 
property portfolio comprised 61 objects with 538,800 m² of rentable 
space and a total value of EUR 816.8 million as of 30 September 2009 
(EUR 1,074.2 million at year-end 2008). Average rents (EUR 10.5/m² in
the office sector and EUR 9.6/m² in the retail sector) remained 
nearly unchanged in comparison with year-end 2008.
Four objects in the investment portfolio, representing 5% of total 
property assets, were under redevelopment during the third quarter of
2009. ECO took advantage of the high vacancy rate in these buildings 
(approx. 68%) to carry out modernisation projects and thereby meet 
the changing demands of tenants. In this way ECO is following the 
typical lifecycle for retail properties and making preparations for a
future increase in earnings and value through upgrading and new 
rentals. The occupancy rate of the other objects in the investment 
portfolio averaged approx. 90% in spite of the adverse market 
climate, reflecting the level at year-end 2008.
Plans for the fourth quarter of 2009 call for the sale of further 
properties in Austria. In addition, ECO will continue its 
redevelopment projects for the modernisation of selected objects. No 
new development projects are scheduled at the present time. The 
properties in the investment portfolio will be optimised through an 
improvement in both furnishings and structure. These measures should 
increase the occupancy level and thereby stabilise rental income. 
This, in turn, will safeguard the company`s liquidity and should also
support the continued generation of positive cash earnings from 
operations.
The Management Board expects results for 2009 will show significant 
growth in the equity ratio. Operating earnings should also increase 
due to the trend reversal in valuation. The continuing low level of 
interest rates and reduction in debt are expected to produce a 
year-on-year improvement in financial results. On the basis of the 
measures implemented during the first three quarters - the 
optimisation of the portfolio, strengthening of liquidity, protection
of financing over the long-term and reduction in debt - ECO is well 
positioned to master any continuation of the difficult operating 
environment and to profit from growth opportunities when the market 
recovers.
Selected Company Data in accordance with IFRS
1-9/2009        1-9/2008
Revenues (TEUR)                                           46,771          55,424
 Thereof rental income (TEUR)                             38,206          45,838
Income from the disposal of non-current assets (TEUR)        292           3.600
Net gain/(loss) from changes
in the fair value of investment properties (TEUR)        -18,554         -23,638
Earnings before interest, tax,
depreciation and amortisation (EBITDA) (TEUR)             23,836          31,132
Operating profit (EBIT) (TEUR)                             5,253           7,452
Profit before tax (EBT)(TEUR)                            -10,740         -25,419
Profit after tax (after minority interests)(TEUR)         -8,226         -16,807
Earnings per share (EUR)                                   -0.24           -0.49
Weighted average number of shares (Stk.)              34,100,000      34,100,000
FFO (funds from operations)
before interest and taxes1)(TEUR)                            603          38,982
Cash earnings (FFO - funds from operations)
after interest and taxes2)(TEUR)                         -15,429           5,981
NAV per share as of the balance sheet date (EUR)           10.37           11.83
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
                                                        30/09/2009    31/12/2008
Non-current assets                                         827,906     1,085,709
 Thereof investment properties                             777,992       981,890
 Thereof properties under construction                      38,768        40,421
Current assets                                              28,021        27,904
Total assets                                               855,927     1,113,614
Equity and reserves                                        355,438       375,113
 Thereof minority interests                                  1,881         6,918
Non-current liabilities                                    439,209       470,846
Current liabilities                                         61,279       267,654
Total equity and liabilities                               855,927     1,113,614
Property Data
                                                         30/09/2009   30/09/2008
Number of objects                                                61          123
 Thereof investment portfolio                                    59           72
 Thereof trading portfolio                                        0           45
 Thereof development projects                                     2            6
Rentable space in m²*                                       538,800      666,200
Garage spaces (number)                                        2,840        3,570
Property assets (in TEUR)                                   816,760    1,094,828
 Thereof properties under construction                       38,768       46,301
* Garage spaces were included at 20 m² each / parking areas included
This press release includes forward-looking estimates and statements 
that are based on the information available to ECO 
Business-Immobilien AG at the present time. Forward-looking 
statements are normally described with terms such as "expect", 
"estimate", "plan", "anticipate", "assume", "should", "could", etc., 
and reflect conditions at the time they are made. ECO notes that 
numerous factors may cause actual circumstances and, therefore also 
actual results, to differ from the expectations described in this 
press release.
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

Q-COM Financials
Roland Mayrl
Tel.: +43(1) 504 69 87-331
mailto:r.mayrl@qcom.at

Branche: Real Estate
ISIN: AT0000617907
WKN: A0D8RY
Index: Prime Market
Börsen: Wien / Regulated free trade

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