Rodamco Europe realised a net profit of EUR 209 million in the first nine months of 2002. Earnings per share over the same period came to E2.70, based on 77.4 million shares (2001: E2.67).
Â· Comparable net profits increased 3.5% to E209 million over the first nine months of 2002; earnings per share came to E2.70. Net rental income rose 4% to E301 million. Occupancy remained more or less stable: from 96.1% at the end of June 2002 to 96.0%.
Â· Net asset value per share rose by 4.2% from E45.14 at end 2001 to E47.03. The value of the property portfolio increased by E150 million to E6,321 million. Total net investment in the third quarter amounted to E68 million.
Â· Financing of the strategic growth including the pipeline portfolio of E1.6 billion is the main reason for the CompanyÂ'Â's decision to convert the E555 million loan into shares.
In line with previous statements, Rodamco Europe expects an increase in net profit of between 3% and 5% in the 2002 financial year, not taking into account potential effects of acquisitions and divestments, or significant changes in exchange rates and interest rates.
Drs. Maarten Hulshoff, CEO of Rodamco Europe since June 2001: 'Currently, we are well positioned to benefit from the potential for growth in Europe, especially on the basis of our strong pipeline portfolio of E1.6 billion and our focus on retail. In addition, our strong balance sheet with the necessary financial flexibility should also be taken into account.
On a comparable basis, corrected for the net result of RoProperty for 2001 (E7 million), the interest received on the proceeds of the sale of RREEF US (E5 million), and also corrected for missed interest (E3 million), this results in a 3.5% increase in net profit. Earnings per share from core activities came to E2.67 (2001: E2.58). Profit from core activities amounted to E68 million in the third quarter of 2002 (2001: E67 million).
The rise in net profits was due to the following factors:
- Net rental income rose 4% from E289 million to E301 million, despite the acceleration of the divestment programme (mostly offices) in the second half of 2001 and in the first half of 2002. This increase was mainly due to various projects coming into operation: Bonaire shopping centre in Valencia, Batavia Stad Outlet shopping centre in Lelystad, ÃrkÃ¡d shopping centre in the Hungarian capital Budapest and the three Spanish shopping centres in Valladolid, San Sebastian and Albacete. Other factors positively affecting net rental income were indexation of existing rental contracts and the conclusion of new rental contracts at higher rents.
- Occupancy hardly changed: from 96.1% to 96.0% compared to 30 June 2002. In the retail sector, occupancy was 96.9% and in the office sector it was 91.9%. The office sector is experiencing some pressure, particularly in Sweden, the Netherlands and Spain. In Spain, this is mainly due to initial vacancies in projects that came into exploitation.
- Exploitation costs rose by 11% to E49 million. This is partly related to higher rental incomes from various projects that came into exploitation in 2001 and partly to certain favourable incidental factors in 2001. Excluding these one-off factors, the increase was in line with the rise in rental income.
- Total interest costs declined slightly from E81 million to E78 million. This was the effect of the interest income from RREEF US.
- As in previous years, 70% of the management costs have been charged to the result and 30% to the revaluation reserve. The management costs applied to the result amounted to E15 million, which comes to 44 basis points of the total assets. Over the year as a whole, we do not expect costs to exceed 48 basis points of the total assets.
In the first nine months of 2002, the total result was E265 million, an increase of 18% compared to the previous year (E224 million). Besides net profit, the total result was affected by the following items:
- Revaluation in the Netherlands came to E25 million (