In the first half of the financial year 2002/2003 (1 March - 31 August 2002), Rodamco Asia NV (Â'Â'RAÂ'Â') achieved a net profit of EUR 14.7 million (EURO 0.67 per share), which represents a 15.7% increase from net profit of EUR 12.7 million in the same six-months period a year ago.
The total performance in the first half of 2002/2003 amounted to minus EUR 19.6 million due largely to currency results that were impacted by the euro strengthening against most Asian currencies. Net asset value per share decreased by 4.3% from EUR 21.61 at the beginning of the financial year (adjusted for the dividends distributed) to EUR 20.67 on 31 August 2002. The closing share price in the last share trading day of August being 30 August was EUR 15.86, representing a discount to net asset value per share of 23%.
During the first six months of 2002/2003, Rodamco Asia achieved a net profit of EUR 14.7 million, which is EUR 2.0 million, or 15.7%, more than the EUR 12.7 million net profit realized over the corresponding period a year ago. Net rental income increased by 11.1% from EUR 22.5 million to EUR 25.0 million, mainly due to:
* the full impact of Rodamco AsiaÂ'Â's acquisitions in the previous year, namely 100% of Joong Ang Building (office building in Seoul, South Korea in July 2001) and an additional 20% stake in Maple Place (luxury residential complex in Beijing, China in October 2001) which were partially offset by the sale of the interest in the Hu-Ning Expressway (Shanghai, China in October 2001),
* the opening of Fraser Suites at Rodamco Place (serviced apartments in Seoul, South Korea) at the end of March 2002,
* the re-opening of an additional 13,000 square metres of shop space for trading in Karawaci Supermal (shopping centre complex in Jakarta, Indonesia) since February 2001, and
* a net increase of rental rates for properties, mainly for Rodamco Tower (office building in Seoul, South Korea), Karawaci Supermal and Suria KLCC (shopping centre in Kuala Lumpur, Malaysia).
Capitalised interest on equity investments in development projects was unchanged at EUR 1.2 million in the first half of 2002/2003. Fraser Suites, which was completed one month after the previous financial year ended contributed EURO 0.2 million while Rodamco Plaza, a shopping centre development in Buchon, Seoul, South Korea that was aquired in mid-May 2002 accounted for Eur 1.0 million.
Also as a result of the completion of Fraser Suites, interest expenses increased EUR 1.1 million. This increase was compensated by lower interest charges on other projects, resulting in almost unchanged interest expenses of EUR 8.6 million in the first half year.
Internal valuation in the property portfolio resulted in the value of the portfolio increasing marginally by EUR 0.4 million in the first half of 2002/2003, compared to revaluation results of positive EUR 17.6 million reported for the same period last year.
The revaluation result of positive EUR 13.1 million in South Korea was largely due to the completion of Fraser Suites. While the economies of China and South Korea continued to benefit from business expansion, Southeast Asia experienced on-going business consolidation and the impact was felt especially in the office and serviced apartment sectors of those countries, in Rodamco AsiaÂ'Â's case mainly in Singapore and the Philippines.
At the beginning of the financial year 2002/2002, we stated two near-term priorities. The first was to achieve critical mass of Eur 1 billion before the middle of the next financial year 2003/2004. The second was to have a sharper geographical and product focus, with emphasis on North Asia, namely South Korea and China. In the first half of 2002/2003, we made two acquisitions that were in line with these priorities.
The first pertained to Rodamco Plaza, a 149,000-square metre retail mall complex that is under construction in Buchon, Seoul, South Korea, which is expected to be completed in August 2003, for a total investment consideration of approximately Eur