15/05/2009 | Corporate News
Fair Value REIT-AG publishes figures for Q1 2009
70- Consolidated net income of € 0.4 million (previous year: € 0.3 million)
- Equity ratio within meaning of Section 15 of the REITG at 51.5%
- Current financing extended after balance sheet date
- Forecast for fiscal year 2009 confirmed
- Quarterly report available from today at www.fvreit.de
Munich, May 15, 2009 – Fair Value REIT-AG today announced its results for the first quarter of 2009. Its operating business enjoyed on-track results. New rentals in the first quarter of 2009 took the occupancy level to 95.2% of Fair Value’s share of the potential rent. At the same time, the rental agreements which expired in the first quarter of the fiscal year were more than compensated for on balance by renewals and relettings.
In total, the company recorded a net rental result of € 1.8 million in the first quarter of 2009, compared to € 2.8 million in Q1 2008. This downturn is due to lower revenues of € 0.5 million at a subsidiary after a general rental agreement was terminated ahead of time against a compensation payment. Further the property-related operating expenses were up by € 0.5 million year-on-year as a result of the increased maintenance and energy costs as well as deferred operating costs. After including the general administrative costs, other operating income and expenses and the valuation result, EBIT in the first quarter of the current fiscal year totaled € 1.3 million (previous year: € 1.9 million).
In addition, Fair Value REIT-AG also generated income from its participations in a current total of eight closed-end real estate funds (associated companies), which are disclosed as income from participations. During the period under review, Fair Value recorded corresponding income of € 0.5 million (previous year: € 0.4 million). This includes expenses from the valuation of interest rate hedges (interest rate swaps) and imputed valuation losses from the scheduled reduction of "over-rents".
Compared with the previous year’s figure of € 1.7 million, the net interest expenses were significantly reduced to € 1.1 million. In total, the financial result in the first three months of the current fiscal year was € -1.3 million compared to € -1.9 million in the previous year. Fair Value REIT-AG thus recorded consolidated net income of € 0.4 million in the first quarter of 2009 (previous year: € 0.3 million). This corresponds to earnings per share of € 0.05 (previous year: € 0.04).
In the first quarter, earnings were depressed by market valuations of the interest rate swaps and of the properties, resulting during the year from the imputed reductions of over-rents. As of March 31, 2009, these market valuations resulted in total charges of € 0.9 million. After adjustment for these extraordinary factors, the company recorded consolidated earnings totaling € 1.3 million, thus being able to slightly exceed its own forecast.
During the first three months of the current fiscal year, Fair Value REIT-AG recorded a cash flow from operating activities (so-called funds from operations or FFO) of € 0.3 million (previous year: € 0.6 million) or € 0.03 per share (previous year: € 0.07). This downturn was due to the premature termination of a general rental agreement at a subsidiary against a compensation payment, as mentioned above. As of March 31, 2009, cash and cash equivalents totaled € 10.4 million, up significantly compared to the previous year's figure of € 5.2 million. As a result, Fair Value REIT-AG has a high degree of financial flexibility.
The company’s equity on March 31, 2009, totaled € 75.8 million (December 31, 2008: € 76.8 million). Including minority interests, this corresponds to an equity ratio within the meaning of Section 15 of the REITG of 51.5% of immoveable assets. As a result, the net asset value of € 8.05 per share in circulation has remained mostly stable (December 31, 2008: € 8.16). The slight downturn was due to the changes in the reserves for changes in value for interest rate swaps.
After the balance sheet date, Fair Value REIT-AG was able to extend current financing which was set to expire in August 2009 by a period of two years. In this connection, the loan of € 13.5 million will be redeemed by an amount of € 6 million from cash and cash equivalents and from financial assets.
Frank Schaich, the company’s CEO, highlighted the positive growth in Fair Value REIT-AG’s operating business: “During the first quarter, we successfully processed a good third of the rental agreements which were due for renewal or reletting in 2009.” The Managing Board also believes that the company’s financing is well positioned, as the successful follow-on financing has already taken care of the tasks to be completed this year. “We have increased our income base in a difficult environment and further improved our financing structure,” commented Frank Schaich, summarizing the first three months.
The Managing Board has confirmed its forecast for 2009 as a whole as a result of the course of business in the first quarter. This forecast is for Fair Value REIT-AG to record consolidated earnings (IFRS) of € 4.2 million to € 4.5 million prior to the consideration of changes in the market value of real estate and interest rate swaps.
The interim report for the first quarter of 2009 is available in the Investor Relations section of www.fvreit.de.
2009
