Atrium European Real Estate (Euronext/ATX: ATRS), a leading Central and Eastern European real estate business focused on shopping center investment, management and development, has announced its results for the half year ended June 30, 2009.
Key points of the results are as follows:
Net rental income grew 19.9% to 59 million (6M 2008: 49 million) while gross rental income rose 16.4% to 75 million (6M 2008: 64 million).
- On a like-for-like basis, GRI fell 6.9% to 58 million (6M 2008: 62 million) and NRI fell 4.3% to 50 million (6M 2008: 52 million).
- Second quarter GRI was 38 million, slightly up on Q1 2009, with NRI up 4.7% at 30 million.
- Operating margin improved to 79% for the first half from 71% in 2008, reflecting Atrium's ongoing operational efficiency program.
Balance sheet remains strong, with a cash balance at 30 June 2009 of 855 million (2008: 1.25 billion).
- Borrowings reduced to 1.08 billion (31 December 2008: 1.51 billion), following the acquisition of 441 million of nominal value of 2006 Notes and 2008 Convertible Securities, reducing annualized interest payments by 34 million.
- The average interest rate is now 7.6%.
- The Group is well within the two covenants of its medium term note programme 2006.
Standing assets were revalued downwards by 237 million to around 1.49 billion in the first half, while its land and development portfolio was revalued down by 139 million to 712 million.
- This negative revaluation was felt predominantly in Q1, with a noticeable slowdown in the rate of decline in Q2.
- In Q2, standing investments were revalued down by only 56 million (Q1 revalued down by 181 million), while developments and land was down by 28 million (Q1 revalued down by 111 million).
9.85% average weighted equivalent yield at 30 June 2009 compared to 9.69% at the end of the first quarter and 9.14% at the end of 2008.
EBITDA excluding the revaluation and impairment amounted to 40 million (6M 2008: 23 million).
Loss before tax was 325 million (6M 2008 profit before tax: 2 million), mainly resulting from the valuation movement of standing investments, developments and land.
Cash flow from operating activities was 33 million (6M 2008: 51 million), mainly due to a decrease in interest rates, lower cash balances and higher average interest expense.
Net asset value per share was at 8.97 (31 March 2009: 9.22, 31 December 2008: 10.66).
Occupancy levels were slightly up at 93.6% compared to 93.4% at the end of Q1 2009 and steady compared to 93.6% at 31 December 2008.
The company progressed its dual listing of shares on Euronext Amsterdam which was subsequently completed when dealings commenced on 19 August.
Commenting on the results, Rachel Lavine, CEO of Atrium European Real Estate, said: "Against an ongoing difficult and unpredictable market backdrop, we have been quick to react and made good progress across all areas of the business. The economic climate and lower rental income in some countries have clearly impacted the value of our portfolio. However, despite yields continuing to move out in the second quarter of 2009, movements appear to be getting smaller and we are reaching a more stable level.
"The successful completion of the company's dual listing on Euronext Amsterdam has been an important milestone for the company this year. It provides us with a strong platform for future growth and was one of the key objectives identified when the new management team took over. As an internationally recognized and traded exchange, it opens Atrium up to a far wider universe of potential investors which we believe should result in increased analyst coverage, greater liquidity in Atrium's shares and enhanced pricing over the longer term.
"Whilst the economic outlook in many of our areas of operation continues to be uncertain, we remain robust in our positive long term outlook. We will continue to assess opportunities arising from the current market conditions and will maintain our focus on making the company more efficient op