Corio recorded good results in the first nine months of 2003. Net profit increased by 6.9% per share to â⬠2.02 compared to â⬠1.89 in the first nine months of 2002. Net rental income increased, compared with the same period last year, by 4.8% to â⬠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 â⬠2.68 per share for 2003.
Results
Net profit increased in the first nine months of 2003 by â⬠8.6 million to â⬠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 â⬠90 million at year-end 2002. The indirect investment result came to â⬠27.4 million (2002: â⬠45.4 million). This comprises of upward revaluation of the property portfolio to the amount of â⬠35.0 million (2002: â⬠49.7 million), allocated administrative expenses of â⬠4.8 million (2002: â⬠4.3 million) were deducted, as well as the provision for deferred tax liabilities of â⬠2.3 million (2002: nil) and other movements â⬠0.5 miljoen (2002: nil).
Valuation policy
Corioââ¬â¢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.
Portfolio
The value of the property portfolio increased by â⬠75.6 million the first nine months of 2003 to â⬠3,703.0 million. The investments amounted to â⬠76.7 million. This concerned amongst others the purchase of the shopping centre ââ¬ËIl Maestraleââ¬â¢ in Senigallia in Italy and investments in the existing portfolio (â⬠53.3 million). During the first nine months, Corio sold property to the value of â⬠36.1 million, including a book profit of â⬠0.7 million. In the Netherlands, shopping centre ââ¬ËDe Scholverââ¬â¢ in Capelle a/d IJssel and a residential complex in Eindhoven was sold. In France, the office building ââ¬ËLââ¬â¢Odysseeââ¬â¢ in Les Ulis was sold. In Spain, the remaining part of shopping centre ââ¬ËLa Ballenaââ¬â¢ in Las Palmas was sold. As at 30 September 2003, the retail share in the portfolio was 70%.
Pipeline
This quarter the renovation and expansion of the ââ¬ËCityplazaââ¬â¢ shopping centre in Nieuwegein (the Netherlands) has been added to the committed pipeline. The total investment amounts â⬠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 shareholdersââ¬â¢ equity increased by â⬠161.3 million to â⬠2,089.5 million. As at 30 September 2003 net asset value came to â⬠31.54 (year-end 2002: â⬠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 â⬠200 million, redeeming the short-term borrowings.
Outlook
Through its active investment strategy and centermanagement Corio expects to be able to realise a net profit of â⬠177 million or â⬠2.68 per share (+7.2%).
Dividend policy
Corio expects to pay out the same dividend over 2003 as over 2002 (â⬠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.
