On January 31, 2005 SociÃ©tÃ© FonciÃ¨re Lyonnaise (SFL) has presented its 2004 Results. The highlights are:
- Rental revenues up 5.7% to â¬154.8m â" Current cash flow up 16.4% to â¬100m
- Net profit up 79.3% to â¬98.4m
- NAV per share (net of transfer costs) up 4.8% to â¬39.2 at 31 December 2004
Property portfolio: taking advantage of the SIIC tax regime, SFL stepped up the asset turnover rate. With no shortage of opportunities in an active market, SFL invested â¬529.4 million in new properties (Ilot Richelieu, Rives de Seine, Michelet la DÃ©fense and 108-110 Bd Haussmann) and sold â¬244.8 million worth of properties out of the portfolio (including Ilot FranÃ§ois 1er, 77 av. des Champs ElysÃ©es, 17-19 avenue Montaigne, 16-18 rue Chalgrin and 7 rue du Cirque). SFL also redeemed the â¬275 million mandatory convertible bond held by PrÃ©dica, leading to the exclusion of the Village Victor Hugo properties from the consolidated financial statements as from 1 January 2004. After these transactions, at 31 December 2004 the portfolio totalled â¬2,406 million (net of transfer costs), an increase of 8.1% over the yearearlier figure.
Turnover: rental revenues rose by 5.7% to â¬154.8 million. The like-for-like increase of 4.1% was more than the rise in the building cost index, testifying to the quality of SFLÂ´s strategic positioning. Sales as a property trader fell to â¬20 million from â¬67.8 million, reflecting the fact that the programmes were nearing completion, while service revenues held firm at â¬2.3 million. Total turnover was down by 18.2% to â¬177.1 million, entirely as a result of the lower sales as a property trader.
Operating profit before interest held firm at â¬107.0 million compared with â¬107.9 million in 2003, despite the lower contribution from sales as a property trader. The conversion in October 2004 of the 1997 convertible bonds led to the reversal of the â¬24 million provision set aside to cover redemption premiums on the bonds. This provision reversal helped to drive up operating profit after interest by a very strong 74.9% to â¬93.4 million.
Current cash flow rose by 16.4% to â¬100 million from â¬85.9 million, representing the fourth consecutive year of growth.
Net profit reached a record high of â¬98.4 million, an increase of 79.3% million over 2003.
Higher asset values and NAV
The appraisal value of the property portfolio, net of transfer costs, totalled â¬2,406 million at 31 December 2004, an increase of 8.1% over the year-earlier figure of â¬2,227 million. On a like-for-like basis, the value of the portfolio rose by 5.1%, testifying to the quality of our positioning in the Paris Central Business District â" CBD â" office and retail property market.
The occupancy rate remained at an exceptionally high 98.2% of useable surface areas. The rate for SFLÂ´s portfolio of office properties was 98.3%, only just below the 94.4% rate for the Paris CBD office market as a whole.
Liabilities: net debt contracted to â¬663.5 million from â¬742.9 million.
The 10.7% decrease was due to debt restructuring operations, including redemption of the PrÃ©dica mandatory convertible bond and conversion of the 1997 convertible bonds. The Loan-to-Value ratio (including transfer costs) fell to 24.9% from 30.4%, giving us considerable scope to take on more debt.
NAV (net of transfer costs) at 31 December 2004 amounted to â¬39.2 per share, an increase of 4.8% compared with â¬37.4 per share one year earlier.
NAV (net of transfer costs) per share before the interim dividend of â¬0.70 per share paid on 10 December 2004 came to â¬39.9 per share, representing an increase of 6.7% over 12 months.
Diluted NAV (net of transfer costs) after tax and mark-to-market adjustments to hedging instruments amounted to â¬37.9 per share at 31 December 2004 (â¬41.0 per share including transfer costs)
Outlook: a group and a balance sheet structured for growth
At the Annual General Meeting on 21 April 2005, the Board of Directors will recommend increasing the