Rodamco Europe, the largest publicly listed property investment and management company in the retail sector in Europe, achieved solid financial results for Q1 2003. Rodamco Europe achieved an 11.6% YoY rise in Q1 net profits to â⬠77.2 million primarily through a 7.5% YoY growth in net rental income. NAV per share grew by 2.2% YoY, up 1.8% compared to NAV at year-end 2002. Property investments amounted to â⬠6,524 million, an increase both on Q1 2002 (up 6.9%) and year-end 2002 (up 1.2%).
CEO Maarten Hulshoff: 'Rodamco Europe continues to show growth in a volatile economic environment. These positive results underscore Rodamco Europe´s strategic choice to focus on top quality shopping centres in dominant locations across a number of key European cities. The high quality of the retail investment portfolio makes Rodamco Europe less vulnerable to the slowdown in consumer confidence. In addition to further investments, we recently sold another â⬠113 million of office properties in the Netherlands, bringing the total office divestments in the past two years to approximately â⬠600 million. We are cautiously confident about the future, and will continue to focus on high quality retail properties where we can add value through active retail management'.
Net profit
The rise in net profit compared to first quarter 2002 is due to both higher rental income and lower interest costs. Net rental income rose 7.5% from â⬠96.7 million to â⬠104.0 million, which was primarily due to rent generated from acquisitions during 2002. Other factors positively affecting net rental income were the indexation of existing rental contracts, and the conclusion of new contracts at higher rents. The lower interest income was mainly the result of interest received on the divestment of RREEF US in 2002. The decrease of interest expenses is the balance of the conversion of the convertible loan to Rodamco Europe shares in September 2002 and a rise in debt relating to new acquisitions in 2002.
Total result
The value of Rodamco Europe´s portfolio increased by â⬠79 million to â⬠6,524 million (1.2%) as compared to 31 December 2002, primarily as a result of acquisitions. In addition, the property revaluation in the quarter under consideration amounted to â⬠13 million, compared to â⬠28.4 million in the first quarter of 2002. The total revaluation for the first quarter of 2003 was approximately 0.2%, mainly due to the Netherlands 0.3% and Spain 0.6%. For 2003 Rodamco Europe expects limited positive revaluations in the retail sector (due to indexation) being partly offset by negative revaluations (yield shift) in the office sector. The currency result amounted to negative â⬠5.5 million, mainly due to the appreciation of the euro against the Swedish krona.
Due to these lower results from revaluation and other movements, the total result amounted to â⬠80.5 million, a decrease of 21.3% with respect to the â⬠102.3 million of the first quarter 2002.
Portfolio movements/Recent Events
During the first quarter of 2003, the following movements took place:
* Acquisition of the Cote Seine shopping centre in Argenteuil on the outskirts of Paris for â⬠68 million with a net initial yield of 7.1%;
* Divestment of remaining portfolio of Cofinimmo shares (â⬠11.6 million);
* Opening of Polish subsidiary.
The recent divestment of 17 offices in the Netherlands was concluded at the beginning of the second quarter, whilst already 5 properties were divested during the first quarter, totalling â⬠118 million, of which â⬠113 million was office space.
Source: Rodamco Europe
