AM NV succeeded in achieving the previously announced upturn in results in the second half of 2004. Operating income for the whole of 2004 grew by 19% to â¬1,353 million (2003: â¬1,133 million). The net result on continued activities turned out at â¬66 million (2003: â¬75 million).
A slowdown due to planning delays on large shopping center projects coupled with upfront investments to strengthen activities in growth markets and the cost of streamlining the organization in the Netherlands meant that the result was 12% down on the 2003 figure. The factors depressing the result will, however, contribute to the sustained growth in results over the next few years. AM is forecasting higher earnings per share in 2005. The dividend remains unchanged, with a proposed payout of â¬0.43 per share.
âCreating the right conditions for sound growth was the main theme in 2004,â says CEO Peter Noordanus. âWe have strengthened our position as a prominent partner with regard to urban center, shopping center, housing and office development that is sensitive to the wider local context, both in the Netherlands and across Europe. Last year we made our debut in growth markets for retail development, such as Turkey and Italy, and strengthened our position in the eight countries where we are active as a retail developer. We also embarked on asset management activities, partly to be able to profit from the continued growth in value of shopping centers. In the Netherlands, we expanded our top-three market position for housing and land development. We sold a record number of 4,898 new homes. In addition, we have streamlined the company both organizationally and financially, creating new scope for investment and allowing us to strengthen our position in the years ahead as a developer sensitive to the wider local context with a clear and distinctive vision of the potential afforded by development sites.â
Powerful recovery in second half
Like the net result, the operating result and earnings per share for the whole of 2004 turned out lower than in the preceding year. The operating result was down by 4%, at â¬117.1 million, in 2004. With the increase in operating income, the operating margin (operating result relative to operating income) turned out at 8.7% (2003: 10.7%) but was still within the projected bandwidth of 8â"10%.
Earnings per share on continued activities in 2004 after amortization of goodwill were â¬0.73 (2003: â¬0.86). Earnings per share on continued activities before amortization of goodwill fell to â¬0.87 (2003: â¬0.99).
As forecast at the time of publication of the half-year figures, the results rose strongly in the second half of the year, owing to excellent sales of projects. The operating result grew from just â¬27 million at the end of the six months to â¬117 million for the whole of 2004. The net result on continued activities for the whole of 2004 showed a sixfold increase relative to the â¬11 million reported for the first six months, with earnings per share recovering sharply in line with this improvement.
Segmentation
All the activities produced a positive contribution to operating results and net results in 2004. Shopping center development generated operating income of â¬574 million in 2004 (2003: â¬482 million). The volume of office development shrank to â¬50 million (2003: â¬129 million) but operating income in the housing and land development sector increased to â¬729 million (2003: â¬522 million). Once again, shopping center development proved to be highly profitable, with an operating margin of 12% (2003: 14.3%). The margin on the office development activities was also high, at 15.5% (2003: 8.6%), partly owing to the release of provisions. The operating margin for housing and land development turned out at 5.6% (2003: 8.0%). The operating margins developed along the lines forecast in the half-year report.
Steady dividend
Given the importance which AM attaches to a steady level of dividend payments, it has been decided to adopt a more flexib
