The Board of Directors of Pirelli & C. Real Estate met yesterday to examine and approve the Group's operating results for the nine months ended 30 September 2005. In the first nine months of 2005 aggregate revenues amounted to 2,381.1m; operating profit including income from equity participations amounted to 104.5m; and net profit after minorities amounted to 78m.
Group operating performance in 9M 2005
The figures for the first nine months of 2005 are compared with those for the same period of 2004, after reclassification in accordance with international accounting standards (IAS/IFRS).
Aggregate revenues amount to 2,381.1m, marking a 50% improvement on the 1.584.5m of the first nine months of 2004.
Operating profit including income from equity participations amounts to 104.5m, rising 31% on the 79.6m of the previous first nine months (up 21% on the figure for the same period of 2004 based on Italian GAAP, which forms the basis on which the Group measures its performance against the targets set out in its three-year plan for 2003-2005). Asset and fund management fees and services accounted for more than 40% of this result, compared with 25% at the end of September 2004.
Net profit after minorities for the first nine months of 2005 amounts to 78m, up 25% on the first nine months of 2004 (62.4m).
The Group's share of shareholders' equity amounts to 481.6m as at 30 September 2005 compared with 485.5m at the end of 2004. The decline reflects the combined effect of reductions resulting from the payment of dividends (68.3m) and the reclassification of treasury shares held (32.9m), and increases due to net profit for the period (78m) and the paid-in capital increase carried out as part of the stock option plan (21.6m).
Net debt stands at 29.4m, representing an improvement compared with the 43.2m of 30 September 2004 (40.2m at the end of December 2004 and 42.6m at 30 June 2005).
Adjusted net debt (before shareholder loans to companies in which the Group has minority stakes) totals 257.8m, compared with 297.6m at 30 September 2004 (250m at 31 December 2004 and 273.3m at the end of June 2005). The Group's gearing is 0.53 compared with 0.69 at the end of September 2004.
Performance of main areas of business in 9M 2005
Asset and Fund Management
Aggregate revenues from asset and fund management amount to 2,014.8m for the first nine months of 2005, representing a rise of 51% compared with the same period of 2004 (1,331.9m). Property sales amounted to 1,645.1m and contributions to managed funds (the Berenice Offices Fund) totalled 750m, compared with property sales of 868.8m and contributions to funds (the Tecla Offices Fund and Cloe Offices Fund) totalling 1,532.9m in the first nine months of 2004. The long-term component of property assets has thus risen from 28% at the end of December 2004 to approximately 40% at 30 September 2005. Gross gains in the first nine months of 2005 amounted to 468.2m, compared with 358.5m in the same period of 2004.
Operating profit including income from equity participations amounts to 81.8m for the first nine months of 2005, up 18% on the 69.6m of the same period of the previous year. This was primarily thanks to management fees, which are up from 9m to 20.6m for the first nine months of 2005. Non-performing loans made a positive contribution of 4.7m, compared with a loss of 1.4m recorded in the first nine months of 2004.
Purchase agreements worth a total of 2,135.3m have been entered into to date, with transactions amounting to 1,831.1m completed during the first nine months of the year, compared with 726.3m in the same period of 2004. Pirelli RE's share of the total stands at around 29%.
Services Operated Directly and in Franchising
Services operated directly generated consolidated revenues of 240.6m, compared with 237.7m in the first nine months of 2004.
Operating profit of 42.9m is 26% up on the 34m of the same period of the previous year, thanks to the good performances re