Wereldhave Interim results 2010
· Profit € 58.0 mln (H1 2009: € -13.9 mln)
· Profit per share € 2.58 (H1 2009: € -0.78)
· Direct result € 57.8 mln (H1 2009: € 58.6 mln)
· Direct result per share € 2.54 (H1 2009: € 2.63)
· Sale of non-strategic properties
Profit / loss
The result for the first half year of 2010 amounts to € 58.0 mln or € 2.58 per share (2009: € -13.9 mln or € -0.78 per share). The increased result is caused by the improved valuation results from the property investment portfolio. The total revaluation for the first half year (including a positive revaluation of financial instruments of € 2.0 mln) amounted to € 10.2 mln (H1 2009:
€ -82.7 mln).
The direct result for the first half year of 2010 amounts to € 57.8 mln, which is € 0.8 mln lower than in 2009. During the second quarter the occupancy rate of the portfolio rose to 90,8%. Mainly due to the acquisition on March 16, 2010 of four shopping centres in the Netherlands, gross rental income rose by € 5.6 mln. The additional rental income from lettings in Paris and Washington was largely absorbed by increased vacancies in the office portfolio in Belgium and the United States. Due to the increase in the number of shopping centres, higher maintenance expenditure and a higher addition to the provision for bad debts, property expenses rose by € 0.9 mln. As a result, net rental income increased by € 4.7 mln.
Interest charges increased by € 2.5 mln due to the issue of a convertible bond in 2009 and the acquisitions that were made in 2010. General costs rose by € 1.0 mln due to the improvement and expansion of the organisation, also in connection with the property acquisitions in the Netherlands. Profit before tax rose by € 1.4 mln. As a result of one-off tax advantages in 2009 amounting to € 2.1 mln that were not repeated in 2010, the direct result per share after tax dropped by € 0.8 mln.
The direct result per share for the first half year of 2010 amounts to € 2.54. Because of the increase in the underlying result, the decrease in the direct result per share due to the one-off tax advantages in 2009 (€ -0.11 per share) and the increase in the number of shares due to the optional dividend for the year 2009 (€ -0.06 per share) remained limited to € 0.09 per share.
The indirect result for the first six months of 2010 amounts to € 0.2 mln (2009: € -72.5 mln). The increase in the indirect result is primarily due to improved valuation results for the first half year (H1 2010: € 10.2 mln; H1 2009: € -82.7 mln). In the Netherlands, Belgium, France and Spain property valuations remained more or less stable, but in Finland there was a negative revaluation. This was compensated by rising property values in the United Kingdom and in the United States. The lower valuation in Finland is related to refurbishment costs of the Itäkeskus shopping centre in the coming years. The average cap rate for the valuation of the portfolio dropped slightly during the first half year to approx. 6.5%.
The sale of four smaller buildings in the United Kingdom and an office building in Wageningen, the Netherlands, generated a surplus on disposal of € 1.2 mln. The tax charges rose due to a decrease in deferred tax in the first half year of 2009 caused by negative property revaluations, not repeated in 2010.
Equity and Debt
On June 30, 2010 shareholders' equity stood at € 1,722.6 mln. The solvency ratio (equity/equity + interest bearing debt) amounts to 62%. The number of shares in issue increased by 171,537 to 21,448,525 in connection with the optional dividend for 2009. The new shares are entitled to dividend in respect of the full financial year 2010. In spite of purchases during the first quarter of 2010 totaling € 220 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 € 75.03 as at June 30, 2010 (December 31, 2009:
The secondary listing at NYSE Euronext in Paris will be discontinued during the third quarter of 2010. Wereldhave shares will remain listed at the NYSE Euronext stock exchange of Amsterdam, with an average daily trading volume of 150,000 ordinary shares.
Property investment portfolio
During the first half of 2010, Wereldhave expanded its shopping centre portfolio with four mid-sized shopping centres in The Netherlands acquired for € 220 mln. On July 1, 2010, the Koningshoek shopping centre in Maassluis was added for € 39.7 mln, and on August 2, 2010, Wereldhave purchased a shop, let to C&A, for € 5.0 mln in the Eggert Centre in Purmerend. This makes Wereldhave the single owner of the centre in Purmerend.
With the strategy rebalancing in 2009, Wereldhave decided to gradually dispose of its logistic properties and of properties with a value below € 20 mln. In the Netherlands, Wereldhave sold an office building in Wageningen and in the United Kingdom four smaller buildings and a plot of land were sold. The total proceeds amounted to € 12.2 mln, generating a surplus on disposal of € 1.2 mln.
In Paris Wereldhave succeeded in letting the remainder of the vacant space in the Carré Vert office building for nine years. As of September 15, 2010, the office building will be fully let.
During the second quarter the occupancy rate of the total portfolio rose to 90.8% (Q1 2010 90.3%). Broken down per sector, occupancy levels are: retail/leisure 96.8%, offices 83.4%, logistics 99.3% and residential 92.5%. In France the occupancy rose, in Belgium and in the United States occupancy decreased and in the other countries the occupancy level remained unchanged. As at June 30, 2010, the value of the property investment portfolio amounts to € 2,767.5 mln; the value of the development portfolio amounts to € 117.4 mln.
During the first half year of 2010 Wereldhave invested an amount of € 21.3 mln in development projects under construction. In June 2010, Wereldhave started construction in Nivelles, Belgium for the expansion of the Nivelles shopping centre with 12,000 m² shops with covered parking facilities.
The first two office buildings of the Eilan project in San Antonio, United States, will be completed during the third quarter. In spite of interest from prospective tenants, no letting transactions can be reported yet. The construction of the remainder of the first phase, approx. 500 houses, a hotel and several commercial facilities, is proceeding according to plan. Completion is scheduled starting from the year 2011.
The direct result for the year 2010 will largely depend on the development of the occupancy rate as well as on the pace of property disposals, along with the movements in interest charges and exchange rates. Wereldhave therefore does not yet forecast the direct result for the year 2010.
The Hague, August 12, 2010
Board of Management Wereldhave N.V.
Click on, or paste the following link into your web browser, to view the associated PDF document.