Orco Property Group: A year of exceptional value creation (LU)

Orco Property Group's Board of Directors approved on 27 March the companys consolidated and statutory accounts for the year 2005 presented from now on under IFRS.

Strong increase of the portfolio of investment properties and value creation
2005 was marked by a high number of acquisitions in all segments where Orco is active. Additionally to the increase in value of the portfolio owned on December 31st 2004 (amounting to 249 988 KEUR), all acquisitions done in 2005 contributed to the revaluation profit for year 2005, the portfolio was valued by DTZ for the part attributable to Orcos shareholders at 599,428 KEUR; + 139,78 %. The revaluation profit taken into account to determine the net profit amounts to 78,975 KEUR and relates only to the revaluation of the portion of the portfolio classified under Investment Building made of offices, residences, extended stay hotels and the land bank (IAS40). The hotels, the buildings used for own purposes and the developments (IAS16) are not revalued, the potential revaluation on these assets amounts to 38,704 KEUR.

Full revaluation of the portfolio is taken into account to determine the NAV per share based on the number of shares issued on 31/12/2005 (6,792,578 shares).

During the year, Orco acquired 65,956 m² of offices including the Na Porici building in Prague and an exceptional portfolio of 5 assets in Budapest out of which the Budapest Stock Exchange, 6,979 m² of residential buildings in Berlin, 4,959 m² retail space in Brno, 43,552 m² to be redeveloped and 284,988 m² of land bank. The market value of these acquisitions at the end of 2005 amounted to 217,910 KEUR.

Revalued Net Assets: €49,67 + 44,81 % over 12 months

The net profit is impacted by an amount of 8 967 KEUR of deferred taxes which had to be booked according to the present interpretation of IAS 12 (taxes). As our group is structured in such a way that disposals can be done in share deals and benefit from the Luxembourg tax treatment, no tax will be due. This amount is a non cash item and is cancelled in case of sale.

At year-end 2005, the NAV per share is based on the net consolidated equity of €246,073 increased by the revaluation profits not taken into account in the net result and the value of the 2,000,000 warrants on Suncani Hvar and decreased by the deferred taxes on the revaluations as stated here above.

Dividend: €0,80 up 33%

The Board of Director will propose to the shareholders at the annual General Meeting of April 27th 2006 to approve the distribution of a gross dividend of €0.80 per share in respect of 2005. The dividend will be paid out either in cash or in shares at a discounted value.


After a 2005 exercise with an exceptional value creation, the objective of 2006 is to continue this trend combined with a positive cash flow operational business in all segments. The new investments will be focused on positive operational cash flow deals. On the financing side, existing operations should benefit from improved financing instruments with lowered interest rates. Orco will continue to improve its net equity as well. Finally Orco should enjoy profit from its investments already realized in the residential development activities with a substantial growth of the sales in that segment but also in the hospitality and renting activities. Global sales 2006 forecast is 90 MEUR and for 2007 200 MEUR without new acquisitions.

Appendices to the press release will be available on www.orcogroup.com

Source: Orco Property Group

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