Net income increased by 14.2% to € 33.8m. According to Kempen & Co the figures are in line with what they would have expected. Management reconfirmed that shopping centre rents in ECP´s target markets (Italy, France, Sweden) equal at least the inflation rate. ECP has charged all management costs through the P&L (last years´ figures have also been restated), whereas 30% of these costs used to be charged through equity. The move is a first step to complying to IFRS.
Net income and earnings
The net income of the Company for the nine months to 31 March was € 33.8 million and earnings rose to € 1.14 per depositary receipt, an increase achieved despite charging all overhead expenses to income, as will be the case in future. Previously, 30% of these costs were charged against the revaluation reserve, as had been the normal practice with similar Dutch property companies. The year to date impact of this change was a charge to net income of € 1.2 million and an increase in reserves of the same amount. *The previous comparative numbers have been adjusted to reflect the accounting change in order to show underlying earnings.
Net asset value
Net asset value before income appropriation improved by 1.5% to € 22.15 per depositary receipt since 31 December 2003 mainly as a result of net income for the period. The net asset value in December 2003 was € 21.82 per depositary receipt.
Investment Commentary
The market for prime European retail property remains extremely strong with yields firm. Rents for shops in France, Italy and Sweden are at least tracking inflation but for offices are generally weak, especially in The Netherlands.
Source: Eurocommercial Properties
