22/02/2011 | Corporate News

Fair Value REIT-AG achieves a significant increase in earnings in the 2010 financial year and exceeds forecast

• Consolidated net income increased by € 4.8 million to € 1.9 million according to preliminary figures (previous year: consolidated net loss of € 2.9 million)
• REIT equity ratio increased to 49.4% (previous year: 45.5%)
• Goal of making a dividend payment for 2010 of 0,10 € per share achieved

February 22, 2011 – According to preliminary figures, Fair Value REIT-AG has achieved revenues of € 14.4 million for the 2010 financial year compared with € 12.2 million in the previous year. This corresponds to growth of around 18%. At the same time, the Group was able to increase its net rental result to € 9.5 million compared with € 8.5 million in the previous year. The positive development in these key figures was mainly due to revenues achieved by the IC13 subsidiary being recorded in the results for the first time, rather than in the income from participations as was the case in the previous year.

At € 2.7 million, the operating result was around € 3.5 million higher than the previous year’s figure of € -0.8 million. To a small extent, this increase results from the recording of the revenues of the aforementioned subsidiary for the first time. However, the rise in the operating result is primarily due to a significantly improved valuation result in the market valuation of real estate compared with the previous year.

There has also been a significant increase in the results from associated companies which contributed € 3.6 million towards the success of Fair Value REIT-AG in 2010 compared with € 1.4 million in the previous year. This increase was also due to a significantly improved valuation result for the real estate portfolio.

In the reporting period, Fair Value REIT-AG achieved an operating cash flow (so-called “Funds from Operations”, FFO) of € 4.7 million or € 0.50 per share. Consequently, this figure has increased by 62% in comparison with the previous year (2009: € 2.9 million). The forecast for FFO, which was increased to € 3.3 million (€ 0.35 per share) in November 2010, has thus also been significantly exceeded. This increase results from higher cash inflows from associated companies.

Consequently, the company significantly improved the consolidated net income by € 4.8 million to € 1.9 million during the reporting period (previous year: consolidated net loss of € 2.9 million). The earnings per share increased by € 0.50, to € 0.20 from € -0.31 in the previous year.

The real estate valuation result on the balance sheet date showed that the valuation loss had been halved, to 2% of the proportionate values for the previous year (previous year: 4%).

The consolidated net income adjusted for changes in market value and other one-off effects (in accordance with EPRA), at € 5.6 million, was significantly higher than the forecast for the EPRA consolidated net income which had been increased to € 5.1 million in November 2010. This is mainly due to savings made in maintenance and rental costs which led to an improved net rental result in the Group. For the same reasons, the income from associated companies was also much higher than forecast. The adjusted consolidated net income, which was slightly lower in comparison with the previous year’s value of € 6.0 million, results from the disposal of real estate sold in the previous year.

On the balance sheet date, according to preliminary figures, the consolidated equity totalled € 74.2 million (31 December 2009:
€ 72.7 million). Consequently, the balance sheet net asset value increased from € 7.78 per share in circulation to € 7.96 per share. With the inclusion of minority interests in subsidiaries, the equity ratio in accordance with Section 15 REITG increased to 49.4% of the immovable assets (31 December 2009: 45.5%).

Frank Schaich, CEO of Fair Value REIT-AG, explains the positive business development of the Group as follows: “The cost savings achieved and the significantly improved real estate valuation result compared with the previous year have contributed to the pleasing increase in the IFRS consolidated net income. With regard to the 2010 non-consolidated financial statements drawn up in accordance with German commercial law, we have also achieved a balance sheet profit which will enable us to pay out the targeted dividend of
€ 0.10 per share in 2011.”

Fair Value REIT-AG will publish the final results for the 2010 financial year on 31 March 2011 at www.fvreit.de in the Investor Relations section.

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2011