Züblin reports significant increase in net income (CH)

The Züblin Immobilien group has reported a 70% increase in net income for the financial year ended 31 March 2007. Net income rose to CHF 39.7 million (approx. €22m), Group earnings per share increased to CHF 0.77 (ca. €0.44), and Diluted Net Asset Value (NAV) increased from CHF 10.52 (ca. €5.9) to CHF 10.94 (ca. €6.2) per share. The company's investment portfolio rose above CHF 1.8 billion (ca. €1bn), and vacancy rates fell from 14.4% down to 13.4%. The company's equity ratio grew from 31.5% to 35.5% when assuming full conversion of convertible securities. The Board of Directors will propose a dividend of CHF 0.50 (ca. €0.3) per share in the form of a nominal value repayment at its Annual General Meeting on 11 July 2007.

Marked increase in Net Income through valuation gains
In contrast to the previous year, where Züblin recorded a devaluation of its real estate portfolio, property values for the current year rose by CHF 23.6 million (ca. €13.2m). While the valuation of the Swiss portfolio remained unchanged, valuations in Germany increased for the first time in several years, rising by CHF 5.5 million (ca. €3m) on the back of improved economic conditions in that market. In France, market values rose significantly, with an overall increase of CHF 24.7 million (ca. €13.8m). Additionally, Züblin sold four properties during the year for a net profit of CHF 4.0 million (ca. #128;2.2m) above previous valuations. Finally, as a result of increased vacancy rates, valuations in the Benelux region declined by CHF 6.5 million (ca. €3.6m).

Operating result negatively impacted by non-recurring costs
Non-recurring costs arising from in-sourcing related projects, as well as the reorganization of the Group's holding structure, burdened Züblin's current year result. In total, operating expenses increased by 56% to CHF 41.7 million (ca. €23.3m).

Financial expenses fall sharply
Although mortgage interest charges remained stable, net financial expenses declined by CHF 8.3 million (ca. €4.6m). The decline arises from two factors - CHF 3.8 million (ca. €2.1m) of refinancing changes in the previous year which no longer burdened current year results, and a gain of CHF 2.5 million (ca. €1.4m) through the one-time discounting of the French subsidiary's exit tax obligation, which is payable over the next three years.

Portfolio exceeds CHF 1.8 Billion, vacancy rate falls
The value of Züblin's real estate portfolio increased to over CHF 1.8 billion (ca. €1bn). The rise in the portfolio was influenced by property acquisitions of CHF 215 million (ca. €120m) offset by sales of CHF 65 million (ca. €36m). Vacancy rates fell from 14.4% down to 13.4% in the current year.

Sharp increase in Equity Ratio
The equity ratio also rose markedly during the year. Assuming full conversion of the convertible bonds, the equity ratio rose from 31.5% to 35.5%, in line with targeted levels.

Fully Diluted Net Asset Value further increases
Fully diluted Net Asset Value per share, which assumes full conversion of all outstanding convertible securities, increased from CHF 10.52 (ca. €5.9) to CHF 10.94 (ca. €6.2) at 31 March 2007. The Company's fully diluted NAV was positively influenced by the higher earnings in the period as well as from other changes in equity, offset by the CHF 0.50 (ca. €0.3) dividend during the year.

Solid return on investment products
On the back of the current year's result, Züblin's return on equity rose from 6.8% to 9.1%. During the year, the share price increased from CHF 11.65 (ca. €6.5) to CHF 12.55 (ca. €7), and when the October 2006 capital increase at CHF 10.00 (ca. €5.6), and the par value repayment of CHF 0.50 are both taken into account, the overall return for shareholders was 14.6%.

Nominal value repayment of CHF 0.50 to be proposed
Based on the results for the year, the Board of Directors plans to propose a payout of CHF 0.50 per shar

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