3rd Quarter Results

RNS Number : 0094W

Wereldhave NV

11 November 2010

 



Results 3rd quarter 2010

Key items

•           Profit € 78.6 mln (until Q3 2009: € -106.5 mln)

•           Direct result  € 87.6 mln (+2%)

•           Direct result per share € 3.85 (+1%)

•           Property valuations stable

•           Succesful issue of a € 230 mln convertible bond

•           Outlook 2010: increase in direct result per share

Hans Pars, CEO of Wereldhave N.V., comments:

"The cautious optimisme in Europe and the United States that gained strength during the year can also be noticed in the markets where Wereldhave is active. In most office markets leasing activity has increased, although the pace of decision taking is still rather slow. For Wereldhave's shopping centres, especially in the Netherlands, Belgium and Finland, there is still a lot of interest from retailers that do not yet have a shop in these centres. This all has caused a slight increase in the direct result for the first nine months, compared to previous year.

Overall, the valuation of the portfolio remained stable this year compared to year-end 2009, in spite of a write-off of the acquisition costs for the five new shopping centres we purchased in the Netherlands. In accordance with our strategy to divest smaller and non-retail assets in the Netherlands and the United Kingdom, during the third quarter two smaller properties were sold in the United Kingdom for € 12 mln, bringing the total sales for 2010 to € 24 mln.

For the full year 2010 we forecast a direct result per share which is higher than previous year."

Profit/Loss     

The result for the first nine months of 2010 amounts to € 78.6 mln or € 3.45 per share (until Q3 2009: € -106.5 mln or € -5.20 per share). The increase in result is caused by acquisitions and improved property valuation results. The total revaluation for the first three quarters of 2010 (including a positive revaluation of financial instruments) amounted to € 2.6 mln (until Q3 2009: € -222.4 mln).

Direct result   

The direct result for the first nine months of 2010 amounts to € 87.6 mln, which represents a € 1.8 mln increase compared to 2009. The occupany rate of the portfolio rose to 91.5% during the third quarter. Primarily due to the acquisition of five shopping centres in the Netherlands, gross rental income rose by € 12.2 mln. The additional rental income from lettings in Paris and Washington DC was to a large extent absorbed by increased vacancy in the offices portfolios in Belgium and the United States. The operating costs showed a limited increase of € 0.6 mln, mainly due to the increase in the number of shopping centres. Higher additions to the provision for doubtful debts were compensated by an incidental gain in the service costs. In balance net rental income rose by € 11.6 mln.

The interest charges rose by € 6.3 mln, mainly caused by the debt funded acquisitions in 2010. The general costs increased by € 2.2 mln, partially due to a strengthening of the organisation, also in connection with the acquisitions in the Netherlands. Changes to the organisations in the United Kingdom and the Netherlands caused incidental charges of € 0.8 mln. The profit before tax rose by € 3.2 mln. Due to tax savings in 2010 and one-off tax benefits in 2009 that were not repeated in 2010 the result after tax rose by € 1.8 mln.

The direct result per share for the first nine months of 2010 amounts to € 3.85. Because of the improvement of the underlying result, the direct result per share increased by € 0.03 per share, in spite of the increase in the number of shares in connection with the optional dividend (dilution € -0.06 per share).

Indirect result

The indirect result for the first three quarters of 2010 amounts to € -9.0 mln (2009: € -192.3 mln). The increase in the indirect result can mainly be attributed to improved valuation results (until Q3 2010: € 2.6 mln; until Q3 2009: € -222.4 mln). In balance, the valuation of the portfolio remained stable during the year. The average cap rate for the valuation of the portfolio remained unchanged during the third quarter of 2010 at approx. 6.5%. A surplus on disposals of € 2.3 mln was made with sales for a total consideration of € 24.0 mln.

Shareholders' equity/Debt    

At September 30, 2010 shareholders' equity stood at € 1,692.9 mln. The solvency (equity/equity + interest bearing debt) amounts to 61%. In spite of purchases during the first half of 2010 totaling € 265 mln which were financed by debt, Wereldhave still ranks amongst the best capitalised European property companies. The net asset value per share including current earnings amounts to € 73.56 as at September 30, 2010 (December 31, 2009: € 73.77).

The second listing at Euronext Paris was terminated at September 3, 2010. On October 13, Wereldhave succesfully placed a € 230 mln convertible bond. The net proceeds will be used by Wereldhave for refinancing of the EUR 200 mln convertible bond due March 2011 and for general corporate purposes. The maturity of the Bonds is 5 years with a coupon of 2.875 per cent. The conversion price is € 81.10, well above the net asset value. The conversion price will not be adjusted for dividends, unless and to the extent that the annual dividend payment exceeds € 4.75 per share (as from 2011 raised by € 0.05 per annum).

Property portfolio      

During the first nine months of 2010 Wereldhave expanded the shopping centre portfolio in the Netherlands with the purchase of five mid-sized shopping centres from Unibail-Rodamco for € 260 mln, of which shopping centre Koningshoek in Maassluis was acquired during the third quarter (per July 1). Also during the third quarter Wereldhave purchased a shop, rented to C&A, in the Eggert shopping centre in Purmerend for € 5.0 mln, making Wereldhave the single owner of the centre. The total value of the shopping centre portfolio in the Netherlands now amounts to approx. € 475 mln.

In the Netherlands, Wereldhave sold an office building in Wageningen and in the United Kingdom six smaller properties and a plot of land were sold. In total, properties were sold to the amount of € 24.0 mln, generating a surplus on disposals of € 2.3 mln.

Particularly due to the full letting of the Carré Vert office building in Paris and the high occupancy rate of the shopping centres that were acquired in the Netherlands, the occupancy rate of the portfolio rose to 91.5% during the third quarter (Q2 2010 90.8%). As at 30 September 2010, the value of the investment portfolio amounts to € 2,739.2 mln; the value of the development portfolio amounts to € 94.7 mln.

Development portfolio           

During the first nine months of 2010, Wereldhave invested a total of € 37.0 mln in development projects. In Belgium, in June 2010 Wereldhave started the construction of the expansion of the Nivelles shopping centre with 12,000 m² shops with covered parking facilities. Completion is scheduled for 2012.

The two offices of the Eilan development project in San Antonio in the United States were completed during the third quarter and have been transferred to the investment portfolio. In spite of interest from several prospective tenants, no lettings can yet be reported. The construction of the remainder of the first phase, approx. 500 apartments, a hotel and several commercial facilities, is proceeding according to schedule. Completion is due as from the last quarter of 2011.

The planning phase for the revitalisation and expansion of the Itäkeskus shopping centre in Finland has been completed. To consolidate and strengthen the centre's position in the market, Itäkeskus will be modernised and retail floor space will be expanded internally. The plans will be executed during the period 2011-2013.

In Spain, plans are made for the revitalisation of the Planetocio shopping centre. After the closure of the former ice rink, the focus of the centre will be on leisure and sports. The plans will be finalised during the fourth quarter and works will commence in 2011.

Finally, in Richmond upon Thames, United Kingdom, a long term lease has been agreed with the Whole Foods retail chain from the United states for the entire shopping space of a redevelopment of an existing investment property, currently in preparation. Demolition and construction works will start in 2011.

Prospects       

Assuming stable interest levels and exchange rates and taking higher vacancy in Belgium and the United States into account, Wereldhave forecasts a direct result per share for the year 2010 of between € 5.07 and € 5.12.

The results will be explained during a conference call, to be held today at 14.00 h CET. The conference call can be followed by audiocast on www.wereldhave.com. Questions can be put by e-mail via this webcast.

Click on, or paste the following link into your web browser, to view the associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/0094W_-2010-11-11.pdf

           

The Hague, November 11, 2010

Board of Management Wereldhave N.V.

For further information:

Wereldhave N.V.

Richard W. Beentjes

Tel.       + 31 70 346 93 25

Information for analysts:

Wereldhave N.V.

Charles F. Bloema

Tel.       + 31 70 346 93 25

Wereldhave. Value for tomorrow.

www.wereldhave.com

Profile

Wereldhave, established in 1930, is a property investment company with an internationally diversified portfolio of approximately EUR 2.8 billion. Wereldhave's activities are currently spread over four property sectors and across six European countries - the Netherlands, Belgium, Finland, France, Spain and the United Kingdom - and three regions in the United States. It creates value by actively managing shopping centres, through sound timing in the purchase and sale of offices and residential property, and by developing its own property at cost.

Real estate is a local business. Local expertise is decisive for the success of a property investment company. With its local personnel, Wereldhave maintains direct contact with its tenants. This enables Wereldhave to stay on top of the issues concerning its tenants and up-to-date on market developments. Knowledge of rapidly-changing user requirements is also deployed in the development of projects for Wereldhave's own portfolio.

 

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