In the first three months of financial year 2005 Deutsche EuroShop realised an EBIT of Euro 13.8 million (prior-year period: Euro 13.2 million). Due to currency translation effects the profit for the period decreased by 25 % to Euro 4.4 million compared to the first three months of financial year 2004 (Euro 5.9 million), but increased currency-adjusted by 11%.
Revenue up 17%
In the first quarter of 2005, revenue rose by 17% or Euro 2.5 million year-on- year to Euro 17.4 million. On a like-for-like basis, i.e. adjusted for additional revenue from newly opened centers and the Italian property sold in 2004, revenue was up 1%.
Currency effects on other operating income
At Euro 0.5 million, other operating income was Euro 1.5 million down on the first three months of 2004. While, in the prior-year quarter, exchange rate gains (HUF to Euro) resulted in income of around Euro 1.8 million, the period under review brought exchange rate losses of around Euro 0.1 million.
Expenses slightly higher
Due to the exchange rate losses and the costs associated with the City-Arkaden property under construction in Klagenfurt, Austria, expenses rose by Euro 0.3 million to Euro 3.8 million.
EBIT up 5%
Earnings before interest and taxes (EBIT) rose by Euro 0.6 million or 5% to Euro 13.8 million. In currency-adjusted terms, they were up by as much as Euro 2.5 million or 22%.
Net finance costs increase
Income from the investments in the Main-Taunus-Zentrum and Galeria Dominikanska in Wroclaw was on a par with the previous year at Euro 1.0 million. In contrast, net interest expense deteriorated by Euro 1.7 million to Euro 7.7 million. This was due mainly to higher interest expenses, which rose by Euro 1.5 million as a result of the newly opened shopping centers. The interest expenses incurred prior to their opening were capitalised.
Measurement gains and losses exclude changes in fair values
Measurement gains and losses, i.e. gains and losses on the measurement of financial instruments and properties, only include the investment expenses incurred in relation to operational shopping centers during the period under review. Changes in fair values are not included until the end of the year, as all properties are valued by external appraisers only once a year. Deutsche EuroShop therefore posted net measurement losses of Euro 0.2 million.
Consolidated profit for the period of Euro 4.4 million
At Euro 7.0 million, profit from ordinary activities (EBT) were Euro 1.2 million down overall on the prior-year period. In currency-adjusted terms, however, EBT rose by 11.5% or Euro 0.7 million. After the deduction of taxes and minority interest in earnings, profit for the period amounted to Euro 4.4 million or Euro 0.28 per share. This equates to a currency-adjusted rise of 11% as against the same period of the previous year.
Outlook
Of the properties in Deutsche EuroShop"s shopping center portfolio, only City- Arkaden Klagenfurt is still under construction. The construction work is making rapid progress, and the pre-letting rate now tops 70%. Due to the healthy demand for retail space in this property, the Executive Board expects to achieve full occupancy in Klagenfurt by the time of its scheduled opening in spring 2006. There are currently several opportunities for acquisitions in Germany and abroad, but competition for attractive shopping centers remains intense. Nevertheless, the Executive Board still considers the Euro 100-150 million investment volume planned for 2005 to be achievable. The Executive Board expects to achieve the projected revenue and earnings figures in 2005. It is also confident that Deutsche EuroShop will be able to pay a dividend of at least Euro 1.92 for financial year 2005, too.
Source: Deutsche EuroShop
