Beni Stabili published bottom-line Q1 2004 results that came out 18% higher on a y-o-y basis. Net profit amounted to € 7,2m versus € 6,1m in Q1 2003. As seems to be some sort of a tradition in Beni Stabili´s interim results, the contribution of Q1 to FY net profit (FY 2004E: 77,2m; FY 2003: 61,5m) was low: ranging around 10%.
Net capital gains on sales amounted to € 5,2m (Q1 2003: € 2,3m), equivalent to a 26% net capital gain. Management stated that in the first half of Q2 2004 sales contracts amounting to € 46m have been negotiated (mainly related to the € 350m Milano Zerotre trading portfolio), which on stand-alone basis will render a consolidated profit of approx. € 16m. This equals an impressive 36% capital gain, reconfirming that the Italian office investment market remains robust.
Beni Stabili´s latest external valuation (31 December 2003) revealed an implicit hidden reserve of 18% related to the company´s trading portfolio (E: € 588m as at 31 March 2004), implying that double-digit capital gains are likely to be sustainable in FY 2004-2005.
An important factor helping net profit to increase on a y-o-y basis (E: +26%) is the fact that the debt used to finance the purchase of 51% in Milano Zerotre does not accrue any interest until 31 December 2004.
Net revenues from rents and services improved 4.0% (E: 2.5%) in Q1 2004, amounting to € 41,4m versus € 39,8 in Q1 2003. This is mainly due to an improved margin on rents following the consolidation of Milano Zerotre.
Source: Kempen & Co