Today, Wereldhave presents its 2004 results. Profit increased from â¬104.7 mln in 2003 to â¬171.2 mln, mainly as a result of a positive property revaluation. The property revaluation and result of disposals, at average exchange rates, amounted to â¬55.9 mln in 2004 (2003: â¬ â" 1.7 mln). Profit per share for 2004 amounts to â¬8.31 (2003: â¬5.31).
Direct investment result
The direct investment result rose â¬1.6 mln to â¬118.1 mln. The increase is the result of â¬3.1 mln lower interest costs, â¬2.0 mln lower taxes on result and â¬1.0 mln lower general costs. Net rental income decreased by â¬4.5 mln, of which â¬2.3 mln was caused by lower exchange rates. The direct investment result per share decreased by â¬0.18 to â¬5.73 (2003: â¬5.91) as a result of the increased number of shares coupled with a portfolio that remained virtually unchanged.
Shareholdersâ equity and net asset value per share
At the end of December 2004 shareholdersâ equity, before distribution of profits, amounted to â¬1,445.8 mln (2003: â¬1,310.0 mln). This represents 70.5% (2003: 64.9%) of total assets. Long-term debt at December 31, 2004 amounted to â¬508.1 mln (2003: â¬575.5 mln). The currency hedging policy includes dollar debts. The lower exchange rates for the dollar thus also resulted in a lower euro value of debts. Net asset value per share before distribution of profits amounted to â¬69.40 at December 31, 2004 (2003: â¬66.35).
The number of changes in the portfolio was limited in 2004. In the Netherlands, an office building on Veraartlaan in Rijswijk was sold, while on the Ypenburg business estate in The Hague an industrial unit was renovated and a new development of 1,663 mÂ² was completed. In the United States, an office building in Dallas was sold, a shopping center was purchased in Austin, and a residential complex in McKinney, Texas was transferred to the investment portfolio. These transactions increased the proportion of shopping centers up to 41%.
The investment portfolio underwent an upward revaluation of 3.1%, with positive revaluations in all countries. The average occupancy rate in 2004 amounted to 91.9% (2003: 93.7%). At December 31, 2004, the value of the development portfolio stood at â¬58.2 million; the value of the investment portfolio at â¬1,922.8 million.
It will be proposed to the General Meeting of Shareholders to distribute a cash dividend for 2004 of â¬4.50 (2003: â¬4,45). With a â¬4.50 dividend, the pay-out ratio is 79.2% of the direct investment result. Of the dividend, â¬2.65 per share will be paid in order to meet the distribution obligations under Dutch tax law, subject to dividend withholding tax, and â¬1.85 will be charged against the reinvestment reserve, as a result of which no dividend tax will have to be withheld on that portion.
In Wereldhaveâs view, the current geographic spread offers possibilities, particularly in large, liquid markets. As such, our focus in 2005 will be primarily on acquiring new projects yet to be constructed, which can be added to our portfolio in the coming years. The target to achieve a portfolio volume of â¬2.5 billion remains unchanged.
Wereldhave pursues an expansion of the portfolio with developments and standing investments. In view of our current solvency ratios, an expansion of the investment portfolio will immediately contribute to the direct investment result per share. Leasing is on the recovery in several property markets, not just in the United States, but also in Europe.