AM on target with 80% growth in net result

AM NV (Amstelland MDC) reports a sharp improvement in operating income and results in the first half of 2003. Operating income was up 70% at €477.4 million, the operating result doubled to €50.1 million and the net result turned out 80% higher at €24.8 million. All of AM’s activities contributed to this growth, which also reflects the acquisition of MDC in August 2002. AM stands by its full-year forecast of 10â€"15% growth in earnings per share in 2003.

The operating margin (operating result as a percentage of operating income) increased from 8.9% in the first half of 2002 to 10.5% in the same period in 2003. An operating margin of around 10% is forecast for the full year.

Relative income contributions
Shopping-centre development generated income of €190 million in the first half of 2003, accounting for around 40% of total operating income. Office projects contributed €87 million, or about 18% of operating income, while residential development generated over €200 million, or 42% of the total.

Earnings per share
Earnings per share (based on the weighted average total number of shares in issue) after amortisation of goodwill rose by 11.5% in the first half of 2003 to €0.29, compared with €0.26 in the first half of 2002. Earnings per share before amortisation of goodwill were 34.6% higher at €0.35 (first half 2002: €0.26). The growth in earnings per share did not equal the growth in the net result because the share capital increased. The combined effect of the issue of 31.7 million shares in 2002 in connection with the acquisition of MDC, the decision by 45% of the shareholders to take their dividend in shares and the payment of part of AM staff bonuses in shares was to increase the total number of shares in issue to the present figure of 88.4 million. The weighted average number of shares in issue in the first half of 2003 was 85.7 million.

Financial position
The capital base (shareholders´ equity plus minority interests and subordinated loans) increased to €520 million (30/06/02: €262 million), due to the share issue in August 2002 and the addition of the net result, after distribution of the cash portion of the dividend. The capital base currently represents 42.5% of the balance sheet total, compared with 44.9% a year ago.

Inclusion in the EPRA/NAREIT Index
AM was included in the EPRA/NAREIT Index in June 2003. The European Public Real Estate Association (EPRA) represents the quoted property sector in Europe and the National Association of Real Estate Investment Trusts (NAREIT) is its partner in the United States. AM’s inclusion in the EPRA/NAREIT Index is expected to raise the profile of the AM share and enhance its marketability.

AM stands by its full-year profit projection for 2003 and, barring unforeseen circumstances, forecasts 10â€"15% growth in earnings per share this year. In the past, AM´s operating income and result have generally been higher in the second half of the year than in the first half. With several major projects scheduled for commencement or sale in the second half, this will again be the case in 2003.
AM will seek to maintain the profit margin as a percentage of operating income at a high level. AM expects the result on operations (operating result plus results of participating interests) to turn out at around 10% of operating income.

Source: AM N.V.

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