Property developer Amstelland NV reports strong growth in results in the first half of 2002. The net result was up by more than 22 per cent compared with the same period in 2001, reflecting increased profitability of the projects.
The improved margin compensated for the lower operating income, which was down almost 10 per cent in the first half of 2002 compared with the same period in 2001, due to continuing delays in planning procedures. Amstelland is forecasting, on an autonomous basis, full-year operating income for 2002 of around EUR 674 million (-9 per cent compared with 2001) and a net result of approximately EUR 38 million (+15 per cent compared with 2001). Amstelland is therefore on track to achieve its projected full-year earnings growth for 2002.
Earnings per share are expected to increase as a result of the acquisition of property developer Multi Development Corporation NV (MDC), which is expected to be completed this month. Barring unforeseen circumstances, earnings per share for 2002 are expected to increase approximately 30 per cent at EUR 0.83 before amortisation of goodwill and around 17 per cent at EUR 0.74 after amortisation of goodwill.
Improved margin
AmstellandÂ'Â's result on operations (operating result plus results on participating interests) for the first half of 2002 increased by more than 24 per cent at EUR 25 million (1st half 2001: EUR 20 million). The operating margin (result on operations as a percentage of operating income) for the same period rose from 6.5 per cent to 8.9 per cent. This improvement in margin was achieved in both residential and commercial activities (offices, business parks, shopping centres and city-centre development). Residential homes in the middle and upper segments, at prices starting from EUR 230,000, accounted for a relatively large proportion of AmstellandÂ'Â's sales. Sales to institutional investors and office and retail lettings remained at a good level. Provisions against vacancy and hand-over expenses for a number of these projects were released.
Earnings per share
Earnings per share (based on the weighted average of the total number of outstanding shares) rose by 18 per cent in the first half of 2002 to EUR 0.26, compared with EUR 0.22 in the first half of 2001. The growth in earnings per share did not equal the growth in the net result (+22 per cent) because shareholders were given the choice in the spring of 2002 of a dividend in cash or in shares, and around half of the shareholders opted for the stock dividend, increasing the total number of outstanding ordinary shares in issue by over 900,000 to the present number of 53,349,771.
Financial position
The capital base (shareholdersÂ'Â' equity plus minority interests and subordinated loans) increased to over EUR 262 million, representing almost 46 per cent of the balance sheet total compared with just over 39 per cent a year ago.
Market trends
Despite the poor economic climate, the market for new housing in the first half of 2002 showed little sign of slowing, with the average selling prices for new homes continuing to rise. There was some shortage on the supply side, exacerbated by planning delays. The generally downward trend in demand on the office property market continued, with new properties on prime sites displacing older properties at less favoured locations. A similar trend is in evidence on the retail property market. The strong demand for quality, on the residential, office and retail property markets is expected to continue in the second half of 2002.
Residential property development
As in 2001, some of AmstellandÂ'Â's residential property development projects faced delays in the first half of 2002 due to planning procedures. The development of the new Schuytgraaf district in Arnhem, for example, was held up by problems with infrastructure planning.
On the other hand, a positive development was the continuing rise in average selling prices. Homes in the middle and upper segments (with prices starting from EUR 230,000) accounted for a larger propo
