12/08/2010 | Corporate News
Fair Value REIT-AG closes the first half year successfully and confirms the full-year forecast for 2010
61- IFRS consolidated net income improves from € 1.7 million to € 2.3 million
- Equity ratio in accordance with Section 15 REITG increased to 47.9%
- Full-year forecast for 2010 is confirmed
Munich, August 12, 2010 – Fair Value REIT-AG today publishes its half-year figures for 2010, which have developed according to plan. These show that the Group achieved revenues of € 7.0 million against € 5.7 million in the same period of the previous year. This increase is due to the full consolidation of a subsidiary (IC 13) for the first time which was included in income from participations in the previous year because of the lower shareholding at the time. On a like-for-like basis, i.e. without this subsidiary, the revenues were around the same level as in the previous year.
The net rental result in the Group amounted to € 4.5 million against € 4.0 million in the previous year. The operating profit at € 3.4 million was around € 0.7 million higher than in the previous year. The positive changes in these key indicators in comparison to the previous year also resulted primarily from the inclusion of revenues from the subsidiary IC 13 for the first time. A positive contribution was, however, also made by the further significant reduction of 26% in the parent company’s general administrative expenses.
On a like-for-like basis, i.e. adjusted for the subsidiary IC 13, there would be an operating profit of € 2.3 million against € 2.6 million in the previous year. The difference from the previous year’s figure arises in this context mainly from conversion and renovation costs associated with new or continuation lettings.
The consolidated net income was € 2.3 million against € 1.7 million in the previous year. This represents a profit of € 0.25 per share (previous year: € 0.18). The difference from the previous year primarily results from lower real estate valuation losses. The adjusted consolidated net income (EPRA earnings) without changes in the market value of real estate and interest rate hedges was, at € 2.6 million or € 0.28 per share on June 30, 2010, slightly below the previous year’s figure of € 2.8 million or € 0.30 per share due to the aforementioned letting-related costs.
In the first half of the current financial year, Fair Value REIT-AG achieved an operating cash flow (so-called “Funds from Operations”, FFO) of € 2.3 million (previous year: € 2.1 million) or € 0.25 per share (previous year: € 0.22). In addition to the aforementioned change in status of the subsidiary, this increase also largely resulted from the reduced administrative expenses at Group level.
On the balance sheet date, the Company’s equity totalled € 73.1 million (December 31, 2009: € 72.7 million). Consequently, the balance sheet net asset value increased slightly from € 7.78 per share in circulation to € 7.84. By including the minority interests, the equity ratio increased in accordance with Section 15 REITG to 47.9% of the immovable assets (December 31, 2009: 45.5%). The EPRA NAV, which reflects the equity relating to the real estate business, improved from € 8.72 to € 9.01 per share.
Frank Schaich, the company’s Chief Executive Officer, is satisfied with how the Fair Value Group’s business has developed: “In the first half year, we have already achieved 60% of the revenue expected for 2010 as a whole. In addition, after the balance sheet date the occupancy rate attributable to Fair Value will increase from 94.1% on June 30, 2010 to 95.3% again as a result of lease agreements which have already been concluded.”
Overall, the results are therefore in accordance with the expected distribution in the course of the year. The Management Board, therefore, confirms the 2010 full-year forecast for the adjusted IFRS consolidated net income (EPRA earnings) of € 4.2 million or € 0.45 per share. In addition, in 2010 the Management Board is still aiming for a net income under commercial law that will permit a dividend of € 0.10 per share in 2011. This is based on revenue still to be achieved from participations, especially after real estate sales within the scope of the company’s targeted portfolio optimisation.
The interim report for the first half of 2010 is available from today at www.fvreit.de in the Investor Relations section.
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