Deutsche EuroShop: Investments pay off (DE)

At its annual earnings press conference in Hamburg on Friday April 29, 2011, the shopping center investor Deutsche EuroShop AG announced the final figures from the past financial year. Once again, it exceeded its own revenue and earnings forecasts.

The company added two more shopping centers (the A10 Center and the Billstedt-Center) to its portfolio.

Consolidated revenue was up 13% from €127.6 million to €144.2 million in the financial year. The A10 Center, which was acquired on February 1, 2010, contributed significantly to this revenue growth. The increased stakes in the Altmarkt-Galerie Dresden on July 1, 2010, and in the Allee-Center in Hamm and City-Point in Kassel, also contributed to the strong growth in revenue. Rental income from portfolio properties increased by 1.1% compared with the previous year.

As in previous years, the vacancy rate remained stable at under 1%. At €0.6 million (2009: €0.6 million) or 0.4% (2009: 0.4%), the need for write-downs for rent losses remained at a very low level.

Net finance costs were up €4.3 million to €-60.2 million (2009: €-55.9 million). After the €14.8 million in measurement losses reported in 2009, measurement gains of €33.1 million were achieved in the year under review, representing an increase of €47.9 million over the previous year. Measurement of the portfolio properties led to measurement gains of €25.4 million, with an average increase in value of 1.3%. Net asset value as at December 31, 2010 was €1,350.7 million (+34%) or €26.16 per share (-1.8%, with an increase of 37% in the number of shares).

Earnings before interest and taxes (EBIT) climbed 12% from €110.7 million to €124.0 million in the year under review. Earnings before taxes (EBT) excluding measurement gains/losses rose by 16% from €54.9 million to €63.9 million; with measurement gains/losses included, EBT rose by 142% from €40.1 million to €97.0 million. Consolidated profit rose by 138% to €81.8 million (2009: €34.4 million).

Earnings per share amounted to €1.80 compared with €0.88 in the previous year. Of this amount, €1.19 was attributable to operations (2009: €1.18) and €0.61 to measurement gains/losses (2009: €-0.30). The number of shares upon which this is based was adjusted in accordance with IAS 33 and increased by 17%.

During the year under review, FFO of €63.6 million was generated, a rise of 16% over the previous year (2009: €54.8 million). FFO per share remained stable at €1.40.

In view of the successful financial year, the Executive Board and Supervisory Board will propose to the shareholders at the Annual General Meeting on June 16, 2011 in Hamburg that an increased dividend of €1.10 per share be distributed for the 2010 financial year.

Deutsche EuroShop anticipates revenue of between €184 million and €188 million for financial year 2011. "The Billstedt-Center, which has been part of our portfolio since the start of the year, will make a particularly positive contribution to revenue," said Claus-Matthias Böge, CEO of Deutsche EuroShop, explaining the almost 30% increase in revenue.

"We will also see the first fruits of the expansions at the Altmarkt-Galerie in Dresden and the A10-Center, which were completed successfully at the beginning of April and are fully let. In autumn the expansion at the Main-Taunus-Zentrum will be completed."

Revenue looks set to increase to between €198 million and €202 million in the 2012 financial year. The company anticipates that earnings before interest and taxes (EBIT) will increase to €157-161 million (+28%) in 2011 and to €169-173 million (+7.5%) in 2012.

Deutsche EuroShop also expects earnings before taxes (EBT) excluding measurement gains/losses to rise to €75-78 million (+20%) in 2011 and to €84-87 million (+11%) in 2012.

Funds from operations (FFO) are planned at between €1.48 and €1.52 per share (+7%) in 2011 and between €1.60 and €1.64 per share (+8%) in 2012.

"In 2010, we went down all three growth routes available to us: acquiring new shopping centers, increasing shareholdings in

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