Leasinvest Real Estate - Half-year results financial year 2007/2008 (period 01/07/07-31/12/07)
- Regulated press release
Steady occupancy rate of 97.74% (30/06/07: 97.01%)
Promising redevelopment in the Grand Duchy of Luxembourg
Net result for 2007/2008 expected to be at least comparable to the net result of the previous financial year[1]
The real estate fund Leasinvest Real Estate reached, for the first half-year, a net result (part of the group) of 15.5 million euros, compared to 18 million euros for the same period of the previous financial year, which is fully in line with our estimated result.
Steady portfolio value of 441.1 million euros on 31/12/07
The value of the real estate portfolio in operation (excluding the development projects), or 441.1 million euros (30/06/07: 445.9 million euros), has slightly decreased due to the sale of the building 'Aubépines' in Luxembourg on 04/07/07.
The value of the real estate, including the development projects, remained practically equal and amounted to 459.2 million euros on 31/12/07, compared to 459.3 million euros on 30/06/07.
The real estate portfolio in operation consists of 49 buildings, of which 38 buildings situated in Belgium and 11 in the Grand Duchy of Luxembourg.
Promising redevelopment in Luxembourg
In the Cloche d'Or region situated in the city of Luxembourg, the real estate fund has, through its subsidiary Leasinvest Immo Lux, two important ongoing redevelopment projects, namely the projects 'CFM' and 'Bian'.
The 'CFM' project to be completed consists of a renovation of the current site with an extension of 4,000 m² of storage and 1,200 m² of offices, on demand of the current tenant. Both extensions were already pre-let on a long term basis.
The 'Bian' project is an office building which is entirely stripped and being extended to 5,500 m². During the current financial year no rental income will be generated. The completion of the renovated office building is expected by the end of 2008. Marketing of the building has already started and offers good perspectives.
Occupancy rate stable at 97.74% on 31/12/07
The occupancy rate amounted to 97.74% compared to 97.01% (30/06/07) thanks to the renewal of current and the conclusion of new leases.
Outlook for the entire financial year 2007/2008
Leasinvest Real Estate will keep on focusing on a further extension of its real estate portfolio in Belgium and the Grand Duchy of Luxembourg, as well in office, logistics as in retail buildings.
Also thanks to the realised gains of 3.6 million euros on the sale of the building 'Aubépines' in Luxembourg during the first half-year and the expected revaluation gains during the second half-year, on the completion of the renovation with extension of the 'CFM' buildings in Luxembourg, a net result, at least comparable to the net result of the previous financial year (34.9 million euros) is expected for the entire financial year, this is, not taking into account further changes in the value of the portfolio in the 2nd half-year of this financial year.
1. Key IFRS figures
| Consolidated real estate portfolio key figures (a) | ||
| 31/12/2007 | 30/06/2007 | |
| Fair value (1,000 euros) (b) | 441,082 | 445,859 |
| Investment value (1,000 euros) (c) | 452,41 | 457,31 |
| Rental yield based on fair value | 7.21% | 7.22% |
| Rental yield based on investment value | 7.03% | 7.04% |
| Occupancy rate (d) | 97.74% | 97.01% |
(a) Takes into account the "Investment properties" (non-current assets) and the "Assets held for sale" (current assets). The development projects are hereby not included.
(b) Fair value: the investment value as defined by an independent real estate expert and of which the transaction costs have been deducted. The fair value is the accounting value under IFRS.
(c) The investment value corresponds to the previously used term 'investment value' and is the value as defined by an independent real estate expert and of which the transaction costs have not yet been deducted.
(d) The occupancy rate has been calculated based on the estimated rental value. All buildings of the Leasinvest Real Estate portfolio have been taken into account, excluding the development projects.
| Consolidated IFRS key figures | ||
| 31/12/2007 | 30/06/2007 | |
| Net asset value, share of the group (NAV) (1,000 euros) | 260,696 | 262,071 |
| Number of issued shares | 4,012,832 | 4,012,832 |
| Number of shares participating in the result of the period (1) | 3,997,744 | 4,012,832 |
| Net asset value, share of the group, per share (2) (3) | ||
| - based on fair value (euro) | 65.21 | 65.31 |
| - based on investment value (euro) | 68.01 | 68.13 |
| Net result per share, share of the group (euro) (3) | 3.87 | 8.71 |
| Debt ratio RD 21/06/06 (%) | 40.34% | 40.93% |
(1) The number of shares participating in the result of the period corresponds to the number of issued shares minus the number of own shares. On 31 December 2007 LRE held a total of 15,088 own shares in portfolio, or 0.38%.
(2) The net asset value on 30/06/07 is the value before distribution of dividend. On 22/10/07 a dividend of 3.80 euros per share has been distributed. The net asset value, share of the group, ex-coupon amounted to 61.51 euros per share based on the fair value and to 64.33 euros per share based on the investment value, on 30/06/07.
(3) The net asset value per share and the net result per share are calculated based on the number of shares participating in the result of the period.
2. Consolidated results of the 1st half-year of the financial year 2007/2008
| (in 1,000 euros) | 31/12/2007 | 31/12/2006 | |
| IFRS | IFRS | ||
| (+) | Rental income | 15,499 | 17,014 |
| (+) | Writeback of lease payments sold and discounted | 0 | 0 |
| (+/-) | Related rental expenses | 0 | 0 |
| NET RENTAL INCOME | 15,499 | 17,014 | |
| (+) | Recovery of property charges | 76 | 0 |
| (+) | Recovery income of charges and taxes normally payable | 1,327 | 903 |
| by tenants on let properties | |||
| (-) | Costs payable by tenants and borne by the landlord for | 0 | 0 |
| rental damage and refurbishment at end of lease | |||
| (-) | Charges and taxes normally payble by tenants on let properties | -1,329 | -903 |
| (+/-) | Other related rental expenses and income | -190 | 0 |
| PROPERTY RESULT | 15,383 | 17,014 | |
| (-) | Technical costs | -592 | -618 |
| (-) | Commercial costs | -411 | -226 |
| (-) | Charges and taxes on unlet properties | -149 | -453 |
| (-) | Property management costs | -967 | -1,166 |
| (-) | Other property charges | -173 | -188 |
| PROPERTY CHARGES | -2,292 | -2,651 | |
| PROPERTY OPERATING RESULT | 13,091 | 14,363 | |
| (-) | Corporate operating charges | -856 | -538 |
| (+/-) | Other operating charges and income | -17 | 1,088 |
| OPERATING RESULT BEFORE RESULT ON THE PORTFOLIO | 12,218 | 14,913 | |
| (+/-) | Result on disposal of investment properties | 3,597 | 0 |
| (+/-) | Changes in fair value of investment properties | 4,205 | 9,091 |
| OPERATING RESULT | 20,02 | 24,004 | |
| (+) | Financial income | 2,045 | 1,314 |
| (-) | Interest charges | -4,910 | -5,308 |
| (-) | Other financial charges | -1,127 | -506 |
| FINANCIAL RESULT | -3,992 | -4,500 | |
| PRE-TAX RESULT | 16,028 | 19,504 | |
| (+/-) | Corporate taxes | -159 | -1,020 |
| (+/-) | Exit tax | 0 | 0 |
| TAXES | -159 | -1,020 | |
| NET RESULT | 15,869 | 18,484 | |
| Attributable to: | |||
| Minority interests | 380 | 525 | |
| Group shares | 15,489 | 17,959 | |
Comments on the consolidated results
Thanks to the steady occupancy rate (97.74%) LRE realised a rental income of 15.5 million euros over the first 6 months. The temporary lower rental income compared to the first half-year of the previous financial year (17 million euros) is due to the sale of three buildings in Evere and Wommelgem in the previous financial year and the sale of the building 'Aubépines' at the beginning of this financial year. Furthermore, the building 'Bian' is been entirely renovated, which results in the fact that temporarily no rental income is generated.
The decrease of the property charges by 0.4 million euros, from 2.7 million euros on 31/12/06 to 2.3 million euros on 31/12/07 is maily due to, on the one hand, reduced charges on unlet properties thanks to the high occupancy rate, and on the other hand, to a decrease of the management costs resulting from a lower value of the investment properties, compared to the previous financial year.
During the first half-year of the previous financial year a badwill[2] of almost 1 million euros was realised, mainly resulting from the acquisition of the remaining shares of the subsidiary Square de Meeûs SA. The realised badwill the previous financial year explains the high amount of the other operating income.
The portfolio result consists of a realised gain of 3.6 million euros resulting from the sale of the building 'Aubépines' on 04/07/07. Furthermore, the portfolio result comprises unrealised gains on the real estate portfolio in operation of 4.2 million euros compared to 9.1 million euros on 31/12/06.
Notwithstanding the increased market interest rates, the financial result has improved by 0.5 million euros during the first half-year, going from -4.5 million euros on 31/12/06 to -4 million euros on 31/12/07. This improvement is mainly the consequence of a decrease of the financial debts resulting from the divestments, notwithstanding the negative impact of the revaluation of the financial instruments through the application of IAS 39.
The taxes have decreased from 1 million euros on 31/12/06 to 0.1 million euros on 31/12/07 thanks to the merger of Square de Meeûs SA in the previous financial year and the mergers of the acquired real estate subsidiaries of Extensa Group at the beginning of this financial year.
Due to the evolutions mentioned above, the net result, share of the group, has decreased from almost 18 million euros (or 4.48 euros per share) on 31/12/06, to 15.5 million euros (or 3.87 euros per share[3]) for the same period of the previous financial year.
The net current result[4], share of the group, closed at 7.9 million euros (or 1.97 euro per share[5]), compared to 9 million euros (or 2.25 euros per share) the previous year.
3. Consolidated balance sheet of the 1st half-year of the financial year 2007/2008
| (in 1,000 euros) | 31/12/2007 | 30/06/2007 | |
| IFRS | IFRS | ||
| ASSETS | |||
| NON-CURRENT ASSETS | 462,316 | 454,174 | |
| Investment properties | 441,082 | 436,376 | |
| Development projects | 18,063 | 13,397 | |
| Other tangible assets | 18 | 17 | |
| Non-current financial assets | 3,153 | 4,384 | |
| CURRENT ASSETS | 7,562 | 23,028 | |
| Assets held for sale | 0 | 9,483 | |
| Current financial assets | 33 | 6,626 | |
| Trade receivables | 3,919 | 4 | |
| Tax receivables and other current assets | 491 | 252 | |
| Cash and cash equivalents | 2,009 | 1,472 | |
| Deferred charges and accrued income | 1,11 | 1,195 | |
| TOTAL ASSETS | 469,878 | 477,202 | |
| LIABILITIES | |||
| TOTAL SHAREHOLDER'S EQUITY | 270,543 | 272,046 | |
| SHAREHOLDER'S EQUITY ATTRIBUTABLE TO | 260,696 | 262,071 | |
| THE SHAREHOLDERS OF THE MOTHER COMPANY | |||
| Capital | 44,128 | 44,128 | |
| Share premium account | 70,622 | 70,622 | |
| Own shares (-) | -956 | -12 | |
| Reserves | 136,891 | 117,205 | |
| Result | 15,489 | 34,934 | |
| Impact on fair value of estimated transaction costs resulting from | -6,219 | -6,219 | |
| hypothetical disposal of investment properties | |||
| Change in fair value of financial assets and liabilities | |||
| on financial assets available for sale | 0 | 336 | |
| on derivative financial instruments | 741 | 1,077 | |
| MINORITY INTERESTS | 9,847 | 9,975 | |
| LIABILITIES | 199,335 | 205,156 | |
| NON-CURRENT LIABILITIES | 85,654 | 88,943 | |
| Provisions | 1,725 | 1,751 | |
| Non-current financial debts | 83,100 | 86,300 | |
| Other non-current financial debts | 44 | 33 | |
| Other non-current liabilities | 785 | 859 | |
| CURRENT LIABILITIES | 113,681 | 116,213 | |
| Provisions | 0 | 0 | |
| Current financial debts | 100,566 | 100,321 | |
| Trade debts and other current debts | 3,818 | 6,698 | |
| Other current liabilities | 1,263 | 1,125 | |
| Accrued charges and deferred income | 8,034 | 8,069 | |
| TOTAL SHAREHOLDER'S EQUITY, MINORITY INTERESTS AND LIABILITIES | 469,878 | 477,202 | |
Comments on the consolidated balance sheet
The real estate in operation, in fair value, amounted to 441.1 million euros on 31/12/07 compared to 445.9 million euros[6] on 30/06/07. The fair value is the value at which the buildings are recorded in the balance sheet by the application of IAS 40 (investment properties).
The investment value of the real estate portfolio in operation, as defined by the independent real estate expert, before deduction of the mutation costs, amounted to 452.4 million euros on 31/12/07 compared to 457.3 million euros on 30/06/07.
The decrease of the real estate portfolio results from the sale of the building 'Aubépines' at the beginning of this financial year. Notwithstanding this sale, the total value of the buildings, including the development projects, has practically remained unchanged (459.2 million euros on 31/12/07 compared to 459.3 million euros on 30/06/07), and this, thanks to the positive changes in the value of the buildings in operation (+4.2 million euros) and the additional investments in the projects.
The net asset value per share[7], based on the fair value, amounted to 65.21 euros compared to 65.31 euros on 30/06/07. This decrease is explained by the dividend of 3.80 euros per share, which was paid on 22/10/07. Compared to the net asset value per share, ex-coupon, on 30/06/07 (or 61.51 euros) the net asset value of the share rose by 6%.
At a valuation based on the investment value, the revalued net asset value amounts to 68.01 euros per share compared to 64.33 euros on 30/06/07 (this is excluding the dividend of 3.80 euros).
The debt ratio, calculated according to the RD of 21/06/06, slightly decreased from 40.93% on 30/06/07 to 40.34% on 31/12/07.
On 31/12/07 the real estate fund had 15,088 own shares in portfolio, acquired on the stock market, or a stake of 0.38%.
5. Important events after the closing of the first half-year
No important events occurred after the closing of the first half-year.
6. Financial calendar
Financial calendar (financial year 2007/2008)
Interim statement Q3 (31/03/08) 16/05/08
Announcement of annual results (30/06/08) 22/08/08
General meeting of shareholders 20/10/08
Dividend payment 27/10/08
Financial calendar (financial year 2008/2009)
Interim statement Q1 (30/09/08) 21/11/08
Announcement of half-year results (31/12/08) 20/02/09
8. Report of the statutory auditor on the accounting data presented in the semi-annual communique of Leasinvest Real Estate SCA
We have compared the accounting data presented in the semi-annual communiqué of Leasinvest Real Estate SCA with the interim condensed consolidated financial statements as at 31 December 20067, which show a balance sheet total of 469,878 (000) euros and net income (group share) for the period of 15,489 (000) euros. We confirm that these accounting data do not show any significant discrepancies with the interim condensed consolidated financial statements.
We have issued a review report on these interim condensed consolidated financial statements, in which we declare that, based on our review, nothing has come to our attention that causes us to believe that these interim condensed consolidated financial statements are not prepared, in all material aspects, in accordance with IAS 34 Interim Financial Reporting, as adopted for use in the European Union.
Brussels, 21 February 2008
Ernst & Young Reviseurs d'Entreprises SCC
Statutory Auditor
represented by
Christel Weymeersch
Partner
Partner
Leasinvest Real Estate SCA
Real estate fund (sicafi) Leasinvest Real Estate SCA invests mainly in high-quality and well situated offices, logistics and retail buildings in Belgium and in the Grand Duchy of Luxembourg.
The sicafi is listed on NYSE Euronext Brussels and has a market capitalisation of 263 million euros (value on 21 February 2008).
Leasinvest Real Estate
Jean-Louis Appelmans
Investor Relations
T: +32 3 238 98 77
[1] Subject to unexpected changes in the value of the portfolio in the 2nd half-year of the current financial year.
[2] Badwill or negative goodwill equals the amount by which the stake of the party acquiring, in the fair value of the acquired identifiable assets, liabilities and contingent liabilities, exceeds the price of the business combination on the date of the transaction.
[3] The net result per share is calculated based on the number of shares participating in the result of the period, this is, the number of issued shares minus the number of own shares.
[4] The net current result consists of the net result minus the portfolio result.
[5] The net current result per share is calculated based on the number of shares participating in the result of the period.
[6] Including the item 'assets held for sale' of the current assets.
[7] The net asset value per share is calculated by dividing the shareholder's equity, share of the group, by the number of shares participating in the result of the period.
