"Unibail-Rodamco posts recurring earnings per share in line with expectations. This happens in difficult times, where most macro economic indicators are negative. Tenant sales in the retail sector over the period came down, although June sales show positive growth. As expected, the Group has seen a slowdown of Net Rental Income growth across its portfolio. Yet, income growth remains positive on the back of high quality assets, which are actively marketed to the public. The Group's shopping centers remain in high demand by retailers looking for customer traffic and exceptional locations," said Guillaume Poitrinal, CEO and Chairman of the Management Board of Unibail-Rodamco.
Continued recurring EPS growth
Compared to H1 2008, all sectors (retail, offi ce and C&E) contributed to the Group's increase in recurring earnings of 7.8% to 4.68/ share. Retail benefited from the strong position of its shopping centers, with low vacancy (2.0%, vs 1.8% end 2008), and a 4.5% like-for-like growth in net rental income. Following divestments in 2008, the office sector saw a decrease in rental income, but like-for-like income grew with 10.1%, of which 7.3% from indexation.
Vacancy in the office sector dropped to 4.7% after the successful letting of 20,500 m² to SNCF in mid-July. The C&E sector benefited from the successful Paris airshow in H1 2009.
Strong financial position
The Group signed 1.2 bln. of new debt year-to-date, including 575 mln. from the net share settled convertible bond issued in April. The undrawn credit lines increased to 2.4 bln. at June 2009.
The average cost of debt for the period came to 3.8%.
The loan-to-value ratio increased slightly from 30% at year-end 2008 to 33% at mid-year 2009. This was mostly driven by declining asset values. The Group wrote off 1,930 mln. in gross market value in the period, bringing the total asset write down over the last 12 months to 3.7 bln. or 16% (LfL).
The Group will continue to invest in its development pipeline, having raised its return criteria to reflect the current market situation. It remains alert to opportunities which may be triggered by the current economic climate. The Group reiterates its full year recurring EPS growth outlook of 7% or more.
The Group confirms its policy of distributing 85-95% of recurring earnings. For 2009, this distribution is scheduled to be fully paid in April 2010.