Corporate News

11/05/2010 | Corporate News

First quarter 2010: Successful start of current year

  • EPRA adjusted consolidated net income up 11%
  • IFRS consolidated net income improved from € 0.4 million to € 1.2 million
  • Cost-cutting program with considerable impact
  • Equity ratio pursuant to § 15 REITG increases to 46.4%
  • Forecast for fiscal year of 2010 confirmed


Munich, Germany, May 11, 2010 – Fair Value REIT-AG successfully started into the current fiscal year. According to financial figures for the first quarter 2010 published today, the Group generated a net rental result of € 2.6 million, compared to € 1.8 million in the same period during the previous year. On the one hand, this increase is due to the first-time full consolidation of one of the company’s subsidiaries, which was included in the income from participations in the previous year given the lower holding at that time. On the other hand, real-estate related costs turned out to be lower. Therefore, net rental result for the first quarter improved by 10% also in a like-for-like comparison, i.e. without taking this subsidiary into account, compared to the same period in the previous year.

Due to the change in status of the subsidiary, the operating result of € 2 million also increased significantly (by € 0.8 million) compared to the same period in the previous year. A like-for-like increase also resulted in this context: On a comparable basis the operating result was improved by 16%. This is primarily due to the success of the cost-cutting measures initiated during the previous year, which aimed at the reduction of general administrative expenses on the holding level. In addition, repair and maintenance expenses were lower compared to the same period in the previous year.

The result from the currently seven associated companies amounted to € 0.9 million (previous year € 0.5 million). This increase is mainly due to lower valuation losses of the properties.

Net interest expenses amounted to € 1.2 million in total, thereby exceeding the figure of € 1.1 million from the previous year by 9%. Without the change in status of the subsidiary, the net interest expenses would have been 4% lower than during the same period in the previous year.

During the first three months of the current fiscal year, Fair Value REIT-AG achieved an operative cash flow (so called “Funds from Operations”, FFO) of € 0.9 million (previous year: € 0.3 million) or € 0.09 per share (previous year € 0.03). Besides the aforementioned status change, this increase is also primarily due to lower expenses.

The consolidated net income was € 1.2 million, compared to € 0.4 million in the previous year. This equates to earnings per share of € 0.13 (previous year € 0.05). On March 31, 2010, the consolidated net income adjusted for changes in the market value of properties and interesting hedges (EPRA result) was € 1.5 million, or € 0.16 per share, an increase of approximately 11% compared to the same period in the previous year (€ 1.3 million or
€ 0.14 per share).

On the balance sheet date, the company’s equity amounted to € 72.8 million (December 31, 2009: € 72.7 million). The net asset value shown on the balance sheet thus increased slightly from € 7.78 per share in circulation to € 7.81. With the inclusion of minority interests, the equity ratio pursuant to § 15 REITG (German REIT Act) increased to 46.4% of immovable assets (31 December 2009: 45.5%). The EPRA NAV, which mirrors the real-estate-related equity, improved from € 8.72 to € 8.89 per share.

Frank Schaich, Chief Executive Officer, is pleased with the performance of the Fair Value Group: “During the first quarter we managed to successfully process more than one third of the rental agreements requiring extension or re-letting during 2010. The Fair Value-proportionate occupancy rate was 93.9% on March 31, 2010. This figure even increased after the balance sheet date to 94.7%, on the basis of already concluded contracts.” Progress has also been made in terms of earnings, as the reduction in the general administration expenses are beginning to take effect. “The significant reduction in costs is the direct result of our efforts in recent months,” adds Mr. Schaich, commenting on the increase in the adjusted consolidated net income for the first three months of the year.

Although the 2010 first quarter results were very good, the Management Board has retained the same forecast for the IFRS adjusted consolidated net income (EPRA result) for the whole of 2010, which is € 4.2 million or € 0.45 per share. In this respect, the Management Board also noted that the expected income and costs for 2010 are not evenly distributed throughout the year.

The interim report for the 2010 first quarter is now available in the Investor Relations area at as of today.

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A REIT – Higher Return for Investors

REIT stands for Real Estate Investment Trust. The assets of these listed companies in Germany consist mainly of real estate and investments in other real estate companies.


At the international level, REITs have been established for many years. On 1 January 2007, they were introduced in Germany as well.


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