DGAP-News: ORCO Germany S.A. achieved an improvement of profitability
(firmenpresse) - ORCO Germany S.A. / Preliminary Results
31.03.2010 09:20
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- Adjusted EBITDA up 19.6% in 2009
- NAV rose by 7.7% during the last quarter to EUR 1,73 / share
- Positive net income in Q4 of EUR 2,7 million
- Finalization of six development projects
- Stronger Integration with OPG initiated
- EUR 230 Million Pipeline of Asset disposals in advanced stage
(Berlin, 31 March 2010). The restructuring process of ORCO Germany S.A.
shows first positive results. The improvement of the operational
profitability is reflected by a 19.6% increase of the adjusted EBITDA
compared to 2008 to EUR 18.6 million (i.e. operating result without net
gain from fair value adjustments on investment property, amortization,
impairments and provisions as well as correction on cost of goods sold).
Total revenues decreased by 7.1% to EUR 72.0 million in financial year
2009. Development revenues decreased by 24.8% to EUR 19.6 million and
rental income declined slightly by 1.9% to reach EUR 54.8 million due to
asset sales which led to a lower revenue base
ORCO-GSG - the core business of the Company - generated revenues of EUR
47.7 million (up 3.4% YoY) and accounted for more than 66% to total
revenues. Even in a challenging environment ORCO-GSG was able to increase
both prices and occupancy rates. The average rent per sqm for commercial
space increased from EUR 6.07 in December 2008 to EUR 6.27 in December
2009. The occupancy rate of ORCO-GSG further increased during 2009 by 1.6%
points to 76.2%. Since taking over ORCO-GSG in June 2007 the occupancy rate
has improved by 6% points. Whereas the first half year closed only with a
slightly positive occupancy rate development of +0.2% points, the leasing
results in the third and fourth quarters show a considerable increase of
+1.4% points. The strong letting performance (64 260 m2 of new gross
letting in 2009) demonstrates that ORCO-GSG has strengthened its position
in Berlin as the leading provider of office and multifunctional light
industrial space. Being a strong partner of the Berlin economy as well as
of its tenants the en-hanced cooperation not only with brokers but also
with local authorities and institutions helped to increase letting.
Despite the turbulent market circumstances, ORCO Germany S.A. successfully
managed to finalize the construction works with a total volume of
approximately EUR205 million on six development projects (Sky Office, H2
Office, Otto Bock Science Center and three Health Care projects) in 2009.
The completion of those projects marks a significant derisking of the
Company's business.
Even though 2009 ends with a consolidated loss attributable to the Group of
EUR -105.5 million, after EUR -121.4 million in 2008, the fourth quarter
marks a turning point with a positive net income of EUR 2.7 million. The
loss per share moved from EUR 2.48 to EUR 2.16. The main drivers of the
losses were impairments and re-valuation losses (EUR 81.1 million) and
financing costs of EUR 45.5 million (mainly interest and SWAP costs. The
will significantly decrease following the disposal of non strategic, mainly
non cash generating assets and the expected non reoccurrence of effects
from fair value measurements on swap charges which amounted to EUR -6.7million.
All investment properties and inventories were evaluated by the independent
valuer DTZ as at 31 December 2009. Like most of the real estate companies
worldwide ORCO Germany S.A. had to face high revaluation losses on
investment properties. They added up to EUR 54.9 million. Amortization,
impairments and provisions amounted to EUR 26.2 million.
The volatility in valuations has led to massive earnings swings in the past
years. GSG is now valued EUR 543 per m2 or EUR 445 million i.e. around EUR
3 million less than at the end of 2007 in which GSG was acquired even
though revenues increased by around 15% since then.
After a sharp fall of the Net Asset Value (NAV) per share from EUR 3.12 as
of 31 December 2008 to EUR 1.61 at the end of Q3 2009, the NAV rose by 7.7%
during the last quarter of the year 2009 to EUR 1.73.The equity position
improved by 7.3% from EUR 41.3 million (Q3/2009) to EUR44.3 million as of
31 December 2009.
In 2009, the first phase of the restructuring process concentrated on the
Development business. Staff reduction and the closure of branches in
Hamburg, Frankfurt and Munich led to reduced employee benefits of EUR3.8
million com-pared to 2008. Other operating costs were effectively reduced
by 23%, falling from EUR 40.1 million to EUR30.8 million. The full impact
of these measures will be seen in 2010 during which the focus will be the
improvement of the efficiency of the asset and investment management
business. Strong synergies are ex-pected from a closer cooperation with the
major shareholder, ORCO Property Group S.A. .
In a challenging market environment in 2009 the disposal of non-strategic
assets generated EUR 46.6 million (lowering the lettable area by 44,000 sqm
to 878,000 sqm).
Thanks to improved market conditions, the regained trust in the Group and
the Company's ability to successfully complete six project developments,
the Company achieved significant progress in the ongoing disposal process
conducted in a non price distressed climate. The current disposal channel
in different stages of completion from advanced negotiation (LOI) to
closing com-prises developments and non strategic assets valued at more
than EUR 230 Mio.
The expected liquidity will significantly improve the financial position of
the Group. The already announced conversion of the EUR 17.6 Mio shareholder
loan of ORCO Property Group S.A. at EUR 1,60 per share and the related
issue of free warrants for existing shareholders will further support the
stabilization of the Company.
About ORCO Germany:
ORCO Germany S.A. is a property company that is listed in the Prime
Standard on the Regulated Mar-ket at Frankfurt Stock Exchange and has its
registered office in Luxembourg. The ORCO Germany Group, which acts
consistently under its registered name of ORCO Germany, has been operating
in Germany since 2004 and concentrates on commercial property as well as on
asset management and project development. ORCO currently has about 169
employees in Germany. ORCO Germany is a subsidiary of ORCO Property Group,
which is one of the leading Central European property companies. The
company established in 1991 is based in Luxembourg and has Euronext,
Prague, Budapest and Warsaw Stock Exchange listings.
Contact:
Kirchhoff Consult AG
Herrengraben 1
20459 Hamburg
T +49 40 60 91 86 82
F +49 40 60 91 86 60
jens.hecht(at)kirchhoff.de
www.kirchhoff.de
31.03.2010 09:20 Ad hoc announcement, Financial News and Media Release distributed by DGAP. Medienarchiv atwww.dgap-medientreff.deandwww.dgap.de---------------------------------------------------------------------------
Language: English
Company: ORCO Germany S.A.
40, Parc d'Activités Capellen
8308 Capellen
Luxemburg
Phone: +49 (0)30-440 123 190
Fax: +49 (0)30-440 123 299
E-mail: seilers(at)orcogroup.com
Internet: www.orcogermany.de
ISIN: LU0251710041
WKN: A0JL4D
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Düsseldorf, Stuttgart
End of News DGAP News-Service
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