Corio’s profit 6.9% higher

Corio recorded good results in the first nine months of 2003. Net profit increased by 6.9% per share to € 2.02 compared to € 1.89 in the first nine months of 2002. Net rental income increased, compared with the same period last year, by 4.8% to € 189.9 million. Based on these results and the forecast for the last quarter the Management Board maintains its expectation to achieve a net profit of € 2.68 per share for 2003.

Net profit increased in the first nine months of 2003 by € 8.6 million to € 133.9 million. This increase is particularly due to rent reviews at a slightly decreasing financial occupancy rate of 95.2% (first nine months of 2002: 95.8%). The Paris office market particularly caused the decreased financial occupancy rate. The decrease of the short-term interest rates as well as the early repayment of several high interest loans compensated the negative effects of the early repayment of an interest-free convertible loan of € 90 million at year-end 2002. The indirect investment result came to € 27.4 million (2002: € 45.4 million). This comprises of upward revaluation of the property portfolio to the amount of € 35.0 million (2002: € 49.7 million), allocated administrative expenses of € 4.8 million (2002: € 4.3 million) were deducted, as well as the provision for deferred tax liabilities of € 2.3 million (2002: nil) and other movements € 0.5 miljoen (2002: nil).

Valuation policy
Corio’s complete portfolio is valued twice a year. At 30 June, a representative half of the portfolio is valued externally and the other half is valued internally. At year-end the full portfolio is valued externally. In future, Corio will therefore not report on valuations over the first and third quarter. In 2002, Corio valued 25% of the portfolio every quarter externally and updated the valuations for the whole portfolio at year-end.

The value of the property portfolio increased by € 75.6 million the first nine months of 2003 to € 3,703.0 million. The investments amounted to € 76.7 million. This concerned amongst others the purchase of the shopping centre ‘Il Maestrale’ in Senigallia in Italy and investments in the existing portfolio (€ 53.3 million). During the first nine months, Corio sold property to the value of € 36.1 million, including a book profit of € 0.7 million. In the Netherlands, shopping centre ‘De Scholver’ in Capelle a/d IJssel and a residential complex in Eindhoven was sold. In France, the office building ‘L’Odyssee’ in Les Ulis was sold. In Spain, the remaining part of shopping centre ‘La Ballena’ in Las Palmas was sold. As at 30 September 2003, the retail share in the portfolio was 70%.

This quarter the renovation and expansion of the ‘Cityplaza’ shopping centre in Nieuwegein (the Netherlands) has been added to the committed pipeline. The total investment amounts € 83.5 million. The development consortium, the municipality of Nieuwegein and Corio came to an agreement, some issues still need further elaboration. The renovation will be executed in phases; the last phase will be delivered in 2008.

Financial position
The shareholders’ equity increased by € 161.3 million to € 2,089.5 million. As at 30 September 2003 net asset value came to € 31.54 (year-end 2002: € 29.11 after profit appropriation). Leverage amounted 39.7 % at 30 September 2003 (year-end 2002: 37.8%). Corio increased the share of long-term borrowings with a floating interest rate by more than € 200 million, redeeming the short-term borrowings.

Through its active investment strategy and centermanagement Corio expects to be able to realise a net profit of € 177 million or € 2.68 per share (+7.2%).

Dividend policy
Corio expects to pay out the same dividend over 2003 as over 2002 (€ 2.32). This will result in a pay-out ratio over 2003 of 87% (2002: 93%). Over the long term Corio aims to maintain a pay-out ratio of around 80% of the net profit.

Source: Corio N.V.

Related News