Befimmo SA, managing agent of the Befimmo SCA Sicafi, has finalised the accounts of the Befimmo Sicafi for the fiscal year ending on 30 September 2005. Despite a rental market that is still difficult in the absence of an economic recovery, Befimmo's 2005 results are significantly better than the 2005 forecast that was announced in November 2004.
Real estate portfolio
The value of the real estate portfolio at 30 September 2005 was 1,091.2 million ("investment value"). This value is compared with 1,129.0 million at the start of the year. The difference comes firstly from disinvestments made during the year amounting to 39.1 million, and secondly from an overall increase in value amounting to 1.3 million.
Befimmo has made no purchases over the past twelve months. This situation reflects the prudent and realistic investment strategy adopted and the scarcity of quality projects on the market.
In overall terms, the value of the real estate portfolio, excluding investments and disinvestments, has remained stable, registering a slight rise of 0.11%. The increases in value in the city center (CBD) (+1.20%), where most of the portfolio is located, offset ongoing losses in decentralised Brussels (-2.44%) and the suburbs (-1.39%).
Results for the fiscal year and book value
The 2005 results are significantly better than forecast early in the year. Indeed, operating cash-flow (before financial result and taxes) for the financial year stood at 65.7 million compared with 66.7 million last year, a drop of 1.5%, substantially less than the forecast 4% drop. This better performance than forecast, despite the absence of any new investment, is the result of better than expected operation of the buildings and overheads lower than budgeted.
The net financial result (including depreciation of interest rates hedging instruments) is 15.37 million, up by 0.16 million. This increase results from the financing of the Poelaert building over 12 months rather than 9 in the previous period and from the rise in the cost of interest rates hedging.
After financial result and taxes, the current net cash-flow is 49.90 million, as compared with 50.87 million for the previous fiscal year.
The net profit for the fiscal year amounts to 56.49 million in comparison with 43.92 million for the previous fiscal year.
On 30 September 2005, the net asset value before appropriation of results stood at 670.35 million, compared with 603.8 million after appropriation at the start of the fiscal year.
Prospects for fiscal year 2005/2006
Befimmo continues its efforts to maximise cash-flow over long periods with the aim of ensuring healthy dividend growth for its shareholders. In concrete terms, it has, over the last two fiscal years, consolidated its relationship with its tenants and has succeeded in convincing several multinational companies to remain in its buildings in spite of the strong competition on the market. Although in the short term this policy means adapting rent levels to the reality of the market, it also allows cash-flows to be consolidated over the longer term. In 2005/2006, all other things being equal, the current net cash flow, for a constant surface area, should remain stable. The dividend is therefore likely to continue its healthy growth.
Befimmo will give priority to pursuing its strategy of investing in its core business as a Real Estate Asset Manager in the Brussels office market while also remaining open to any opportunities appearing in the real estate market.