Befimmo SA, managing partner of the Sicafi (fixed capital real estate investment trust)Befimmo SCA, has finalised the half-yearly accounts for Befimmo SCA as at 31 March 2006. Before analyzing the results at 31 March 2006, it is important to point out that Befimmo now publishes its financial information based on the IFRS international standards.
Net half-yearly earnings amount to €31.6 million as against €26.7 million for the previous fiscal year. This growth, of the order of 18%, is due mainly to the combination of:
- a decrease in the operating result before result on the
portfolio of €31.1 million compared with €34.1 million in
the previous period;
- an increase in the value of the companys real estate portfolio (up €7 million in 2005/2006, compared to the increase of €1.4 million in 2004/2005);
- a reduction in net financial charges (-€6.5 million in 2005/2006 as compared with -€8.3 million in 2004/2005).
This decrease in the operating result before result on the portfolio is due to a combination of:
- a change in the total floor area of the portfolio: the disposals of the Borschette Conference Centre and Charleroi building, in September and November 2005 respectively. These two buildings generated an average annual rent of some €4.1 million;
- a more balanced rate of works contracts: net real estate charges amount to €3.0 million as against €1.9 million in the first half of the previous year.
The increase in the financial result is due mainly to a drop in interest charges resulting from a lower level of financial borrowing than in the previous year, following the disposal of the assets mentioned above, combined with an increase in the value of the companys holdings of financial hedging instruments (up €0.9 million in 2005/2006, compared with -€0.4 million in 2004/2005). During the first half of the year, the average cost of financing loans amounted to 3.23% (including margins, cost of covering rates and reservation commissions), compared with 3.24% during the first half of the previous year. This average cost of
finance is stable since the rise in short-term rates was offset by a drop in charges for covering interest rates in relation to the previous fiscal year.
In March 2006, in order to take advantage of the historically low credit margins and to increase the average duration of its loans, Befimmo took out a new syndicated credit of €350 million, over five years, attracting shortterm interest rates and with a single repayment on the due date. After restructuring the debt, the average duration of loans is 4.9 years, compared with 3.6 years before restructuring.
After financial result and taxes, the current net half-year cash flow is €24.1 million, as compared with €26.1 million for the first half of the previous fiscal year.
The net cash flow for the half year is €23.8 million, or €2.42 per share (as against €26.1 million or €2.66 per share for the same period in the previous fiscal year).
During the first half of 2005/2006 fiscal year, Befimmo recorded in the one-off book cash flow the costs of arranging a new syndicated credit (€0.9 million), partly compensated by the capital gain realised on the sale of the Charleroi building (€0.5 million).