During the reporting period, rental income increased by CHF 14.8 million, or 27.1%, to CHF 69.3 million in comparison to the first half of 2001. This increase is largely attributable to last yearÂ's additions to the portfolio. At CHF 15.9 million, income from real estate services remained close to the level of the previous year.
Consolidated operating income amounted to CHF 88.7 million, which includes a CHF 1.6 million increase in the market value of properties and CHF 1.9 million profit generated from the investment in WTF.
In the first half year 2002 the increase in fair value of real estate investments amounted to CHF 1.6 million, compared to the extraordinarily high revaluation gain of CHF 98.2 million due to acquisitions during the same period of last year.
Consolidated operating expenses fell by CHF 3.8 million, or 14.0%, to CHF 23.1 million. During the first half of 2002 maintenance and renovation expenses were exceptionally low. In comparison to the previous year, fees to subcontractors declined, as substantially less external services were required.
These variations in income and expenses resulted in a decrease in operating income before financial expenses by CHF 77.2 million, or 54.1%, to CHF 65.5 million. While financial expenses of CHF 15.6 million virtually matched last yearÂ's figure, tax expenses fell by 69.3% to CHF 8.7 million. This reduction is directly caused by the marked decrease in valuation gains, which resulted in a correspondingly high reduction of deferred income taxes.
Net income fell by 58.5% to CHF 41.3 million. Net income excluding gains on real estate investments increased by CHF 15.1 million, or 60.5%, to CHF 40.1 million, compared to the same period of last year.
PSP Swiss Property is confident that operating income will continue to grow despite difficult market conditions, due to the good locations and high quality of the properties in its real estate portfolio. For this year, consolidated EBITDA (before net changes in fair value of real estate investments and results from the investment in WTF) is expected to be in the range of CHF 120 million. Based on the revaluation of the properties at the end of 2002, an increase of the fair value of real estate investments of between CHF 5 and 20 million is expected. Earnings generated from the investment in WTF should amount to CHF 5 million.
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(source: PSP Swiss Property Group)