PSP Swiss Propertyâs net income rose by 207.9% to CHF 183.0 million from CHF 59.4 million in 2003. This result was mainly influenced by the merger with REG Real Estate Group (REG).
The Board of Directors will propose to the Annual General Meeting on 8 April 2005 a cash payment based on a nominal value reduction of CHF 1.98 per share (20% more than the previous yearâs dividend of CHF 1.65).
2004 annual results - Increase in revenue and net income
Due to the larger real estate portfolio, rental income rose by 26.6% compared to the previous year from CHF 163.9 million to CHF 207.5 million. The contribution of the REG properties to rental income was CHF 44.0 million. Income from real estate services rose by 14.3% from CHF 30.6 million to CHF 35.0 million. EBITDA excluding gains/losses on real estate investments and non-recurrent effects rose by 20.2% from CHF 144.8 million to CHF 174.1 million. At 70.8%, the EBITDA margin remained at a high level (2003: 72.8%). Net income excluding gains/losses on real estate investments and non-recurrent effects rose by 21.2% from CHF 93.4 million to CHF 113.2 million. Corresponding earnings per share was, after the expected dilution effect from the May 2004 capital increase, CHF 2.78 (2003: CHF 3.08).
Substantial increase of the real estate portfolio
The REG take-over resulted in a significant expansion of the real estate portfolio. Apart from the REG properties, additional properties worth CHF 211.6 million were purchased. 21 non strategic objects were sold for CHF 138.1 million. The valuation of the investment properties resulted in a higher valuation by CHF 14.5 million. Overall, the real estate portfolio increased from CHF 2.8 billion to CHF 4.3 billion. At the end of 2004, the vacancy rate was 11.7% (end of 2003: 12.0%).
Solid financial structure
The equity stood at CHF 2.3 billion at the end of 2004, corresponding to an equity ratio of 52.2%. This strong equity ratio is crucial in regard to the company´s further growth.
Due to its strong position in the market and its promising real estate portfolio, PSP Swiss Property is confident for the future even though the environment for renting commercial real estate will remain difficult in the immediate future. Apart from the ongoing tasks in reducing vacancies and optimising the existing real estate portfolio, implementing further strategic growth initiatives will be at the top of the agenda in 2005. For the investment portfolio, an average vacancy rate of 10 to 12% is expected. Consolidated EBITDA excluding gains/losses on real estate invest-ments is expected to reach approximately CHF 186 million. From todayâs perspective, the risk of negative valuation adjustments at the revaluation at the end of 2005 is regarded as low despite the persistently difficult market environment. After the sale of properties for CHF 94 million in January 2005, further properties worth approximately CHF 140 million are earmarked for sale.