Corio once again achieved good financial results in the first quarter of 2005. The direct investment result increased in the first quarter of 2005 by 3.0 million to 49.0 million (+6.5%) compared to the first quarter of 2004. This was mainly caused by an increase in the net rental income to 67.3 million (2004 Q1: 66.1 million) and lower financing costs.
The indirect investment result totalled 3.2 million compared to 4.9 million negative in the first quarter of 2004. The property portfolio increased in value by 9.1 million during the first quarter, including book profit. The net profit, the total of the direct and indirect investment result, arrived at 52.2 million or 0.79 per share (2004 Q1: 41.1 million or 0.62 per share), an increase of 27.0%.
This quarter is the first quarter to be reported under the new International Financial Reporting Standards (IFRS). The 2004 figures have also been presented according to the IFRS guidelines for comparative purposes. For more information on the transition to IFRS you are referred to a special presentation and appendix that can be downloaded from the Corio website homepage (www.corio-eu.com) or are available from Corio (0031-30-2829392 or firstname.lastname@example.org). This presentation and the appendix have not been audited by external accountants and are of a provisional nature because the IFRS standards and interpretations are still subject to change.
The net rental income rose by 1.8% from 66.1 million to 67.3 million compared to the same period last year. The rental increases were largely realized with an operating portfolio that was virtually the same size as the year before. Administrative expenses in the first quarter of 2005 were 5.1 million, 0.4 million lower than the previous year. As from the start of 2005 the administrative expenses are charged in full to the direct investment result, and the 30% charge to the indirect result is eliminated. The 2004 figures have been adjusted for comparative purposes. Net financing costs fell by 10.6% from 14.1 million in the first quarter of 2004 to 12.6 million in the first quarter of 2005. Taxes on income increased by 0.1 million to 0.6 million in the first quarter of 2005. The direct investment result at the end of the first quarter was 49.0 million, i.e. 0.74 per share.
The entire portfolio has been valued this quarter; in the first and third quarter the entire portfolio is valued internally, and at the end of six months and the year it is valued externally. The total value of the portfolio rose by 8.5 million and the result on sales was 0.6 million. The revaluations (including book profit) were for retail 15.8 million (+0.5%), offices 6.0 million negative (-0.8%), industrials 0.8 million negative (-0.4%) and residentials 0.1 million (+0.6%).
An important accounting change under IFRS is the inclusion of the deferred tax provision at nominal value instead of at present value, whereby it is no longer possible to take account of tax-efficient structures for the sale of real estate. The contribution to the deferred tax provision in the first quarter of 2005 amounted to 5.9 million compared to 5.4 million in the first quarter of 2004. This brought the indirect investment result in the first quarter of 2005 to 3.2 million, or 0.05 per share.
The net profit, the total of the direct and indirect investment result, amounted in the first quarter of 2005 to 52.2 million compared to 41.1 million in the first quarter of 2004, an increase of 27.0%. The net profit per share was 0.79 compared to 0.62 in the first quarter of 2004.
The property portfolio (including projects under development) increased in the first quarter by 28.8 million to 3,944.8 million. An amount of 15.4 million was invested in various projects in the portfolio and in the pipeline, and 10.1 million in the strategic acquisition of the Singelborgh office building in Hoog Catharijne, Utrecht (the Netherlands). The shops at P. Dondersplei