ORCO Germany S.A. / Quarter Results
27.11.2008
Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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PRESS RELEASE
Luxembourg, November 27 2008
ORCO Germany - 9 months accounts 2008
Focus on core business
Cost reduction plan implemented
Adjusted EBITDA increased from -0.1 Million EUR to 13.7 Million EUR
Operating result of leasing portfolio increased to 79.2 Million EUR
ORCO Germany S.A.s Board of Directors has approved on the 27th of November
2008 the companies consolidated financial statements for 2008.
I. Profit & Loss
A. Revenues
Leasing Revenues
ORCO Germanys investment portfolio generated 42.1 Million EUR of leasing
income (compared to 12.7 Million EUR by the end of September 2007).
Contribution of GSG and its affiliated companies (excluding intercompany
effects) amounted to 35 million EUR within the first nine months 2008.
Although the third quarter was effected by a 6,687 sqm space reduction of a
large tenant the occupancy rate of ORCO-GSG improved to 74.2% in 2008
(compared to 71.6% at YE 2007). The Leasing requests were again recorded
across almost all business sectors. The development of the assets in the
Eastern parts of Berlin remains positive. Three of five top-performing
assets are located in Eastern Berlin. Additionally leases show a positive
trend leasing levels for new lettings are in average around 13% above
average leases for existing leases. In all, the leasing revenues in the
period January 01, 2008 to September 30, 2008 increased by 6.7% compared to
the leasing revenues in the respective period 2007.
ORCO Germanys investment portfolio comprises a total of 913,000 sqm of
lettable area, compared to 925,000 m² in September 2007.
Moreover the agreed leasing contracts for Sky Office and H2Office ensure an
increasing leasing income for the future. Currently the letting status
contracted for the projects Sky Office has been increased by 1800 sqm to a
letting status of 60% and for H2 Office a leasing contract of 1150 sqm has
been signed leading to an occupancy rate of 10%.
Development revenues
Development revenues amount to 19.2 million EUR. They primarily were
produced by the sale of 22 delivered residential units and the sale of
commercial project Voßstraße.
Additionally were contracted 9 units by end of Q3 and further 9 sales
contracts were agreed in October. All these units will be delivered in Q4
2008. There are very good chances that until the yearend all residential
units will be sold and delivered.
B. Adjusted EBITDA
The adjusted EBITDA for the first nine months amounts to 13.7 million EUR
for 60.2 million EUR of turnover (versus -0.1 million EUR in September 2007
for 65.7 million EUR turnover). The adjusted EBITDA raised by 9.96 million
EUR while the turnover has decreased by 5.4 million EUR, showing a
significant improvement of the operating profitability especially in the
leasing sector.
The adjusted EBITDA of the development activity amounts to -6.7 million EUR
in September 2008 compared to -5.66 million EUR in September 2007. Until
September 2008, there was fewer development projects finished than in the
same period in 2007, which explains that development revenues could not
reach the same level as in the previous year.
The adjusted EBITDA of the leasing portfolio amounts to 20.4 million EUR
compared to 5.5 million EUR for the same period in 2007.
C. Operating Result
The third quarter of 2008 closes with a positive operating result of 52.7
million EUR vs. 50.1 million EUR in September 2007. The result includes
surplus on revaluation on assets.
The operating result comprises impairments related to the revaluations
performed by DTZ for the assets Fehrbelliner Höfe (-10.3 million EUR) and
Helberger (-7.0 million EUR).
The operating result contributes to ORCO Germanys two business lines:
The operating result of the development activity was -26.5 million EUR in
September 2008 compared to 20.9 million EUR in September 2007.
The operating result of the leasing portfolio amounts to 79.2 million EUR
compared to 29.2 million EUR for the same period in 2007. This result is
composed of increased leasing revenue and decreased operating expenses and
a gain from fair value adjustments in the leasing segment.
D. Financial Result
The net financial result in the end of third quarter of 2008 amounts to
-26.0 million EUR compared to -18.9 million EUR for the first three
quarters in 2007. The interest expense of -26.3 million EUR vs. -14.7
million EUR corresponds to the Group global financial charges. The cash
interest rate of the global debt (bond excluded) amounts to 5.50%. Bank
borrowings show an interest rate after hedging of 5.27%.
II. NAV Calculation
A complete revaluation of the portfolio is being reviewed as we speak.
Therefore, the management does not release for this period any calculation
of the net asset value.
The fair value adjustments and the impairments correspond to those booked
as of June 30, on the basis of a full review of the portfolio performed by
the management and DTZ at this date
III. Outlook
The focus lies on the completion of the projects in construction such as
Sky Office (Düsseldorf), H2 Office and Health care projects. Consequently
the already successfully achieved letting status for both project shall be
further increased. Negotiations regarding significant area sizes are in
final stages for Sky Office and H2 Office. The planning and preliminary
development work of the key projects Leipziger Platz and Cumberland
(Berlin) are continuing.
ORCO Germany will dispose of all remaining residential units of its
developments projects by the end of 2008 allowing to focus on commercial
developments and asset management.
ORCO Germany will continue to focus on increasing the occupancy level while
optimizing further the operating costs of its rental portfolio.
A task of the next months also becomes the continued optimisation of the
structures and processes to set up by an even more efficient approach and
to realise further cost savings and synergies. The group settled a cost
cutting program which effects are yet not visible in third quarter
accounts. It concerns staff reduction, closing offices in secondary cities,
overhead costs reduction.
Three priorities have been implemented:
1) Reduction of the launch of new projects, resulting into a downsizing of
the project management teams
2) Downscale support functions
3) In depth monitoring of marketing, consulting & travel expenses.
As at September 2008, the short-term debt (< 1 year) amounts to 74.3
million EUR. The total amount of debt declined slightly since December 2007
from 640.1 million EUR to 639.7 million EUR.
It is the strategy of the management to turn short term loans into longer
maturity ones. The company is working on the global restructuring of its
debt. The management anticipates that considering the ongoing discussions
with banks the financings should be prolonged after increase of the equity
portion in each project.
Condensed consolidated interim balance sheet
Condensed consolidated interim cash flow statement
About ORCO Germany
ORCO Germany S.A. is a real estate company that has its registered seat in
Luxembourg and that is listed in the Prime Standard on the Regulated Market
of Frankfurt Stock Exchange. The ORCO Germany group, which operates under
the uniform registered trademark ORCO Germany, has been pursuing its
activities in Germany since 2004 and concentrates on commercial properties
as well as on asset management and project development. ORCO Germany
currently employs about 214 members of staff.
In 2006, ORCO Germany strategically reinforced its project development
operations by acquiring Viterra Development. Viterra Development was
renamed ORCO Projektentwicklung GmbH at the beginning of 2008 and is one of
the leading project developers and investors specializing in commercial and
residential properties in the German core markets of Berlin, Düsseldorf,
Frankfurt, Hamburg and Munich. ORCO Germany expanded its portfolio of
properties in Berlin in June of 2007 by taking over
Gewerbesiedlungs-Gesellschaft (GSG); the company now manages approximately
1 million square meters of developed and undeveloped areas. GSG was
established in 1965 and is the largest owner of commercial space in Berlin
with about 825,000 square meters of office and multifunctional space.
ORCO-GSG owns 45 so-called commercial courtyards and centres, as well as
235 residential units. Most of the properties are located in the city
centre with excellent connections to the Berlin public transportation
network.
ORCO Germany S.A. is a subsidiary of ORCO Property Group S.A. Established
in 1991, the company has its registered seat in Luxembourg and is listed on
the Euronext, Prague, Budapest and Warsaw stock exchanges. It operates
primarily in the Czech Republic, Hungary, Poland, Russia, Croatia, the
Slovak Republic and Germany.
ORCO Germany was listed on the Open Market from 2006 until November 2007,
when it transferred to the Regulated Market (Prime Standard) of the
Frankfurt Stock Exchange.
.
Contact
Sabrina Eilers
Head of Marketing & Sales
ORCO Germany
Tel. +49. 30. 440 123 190
E-mail seilers@orcogroup.com
www.orcogermany.de
DGAP 27.11.2008
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Language: English
Issuer: 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@orcogroup.com
Internet: www.orcogermany.de
ISIN: LU0251710041
WKN: A0JL4D
Listed: Regulierter Markt in Frankfurt (Prime Standard)
End of News DGAP News-Service
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DGAP-News: ORCO Germany S.A. - 9 months accounts 2008
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