SFL 2005 interim results: further growth in profit (FR)

The Board of Directors of SFL, chaired by Yves Mansion, met on 22 July 2005 approve the interim financial statements for the six months ended 30 June 2005, which show a further strong increase in current cash flow and NAV. Some highlights: net profit €59.2 million (up 149.9%), current cash flow per share up 16.2% to €1.40, NAV per share (including transfer costs) €40.8 (up 8.1% compared with 30 June 2004).

Transaction to IFRS
The interim financial statements have been prepared in accordance with IFRS, adopted with effect from 1 January 2005. Pro forma IFRS financial statements have been prepared for the six months ended 30 June 2004, to permit meaningful period-on-period comparisons.

Business performance: rapid performance in current cash flow

  • Asset sales: SFL continued to take advantage of market opportunities in the first half of 2005, selling €125.6 million worth of properties (including 80 avenue de la Grande Armée, 17 rue Saint-Florentin, Saint Augustin, 35/37/39, rue de Rome and 6/8 rue de Stockholm). The properties were sold at prices that were 4.5% higher than their aggregate appraisal value at 31 December 2004, generating profits of €29.2 million (including gross capital gains of €26.2 million and a €3.1 million margin on sales as a property trader).
  • Rental revenues declined 4.4% to €76.4 million from €79.9 million, due to the disposals carried out since 30 June 2004. On a comparable portfolio basis, rental revenues grew by a satisfactory 6.1%, providing further confirmation of the quality of SFL's strategic positioning.
  • Operating profit rose 14% to €47.5 million, helped by a sharp drop in overheads.
  • Net finance costs fell by 31.1% to €150 million from €21.7 million, as a direct result of lower borrowings.
  • Current cash flow before disposal gains and tax, including the margin on sales as a property trader, grew 39.3% to €60.1 million from €43.2 million. Current cash flow per share, determined on the same basis, was up 16.2% at €1.40.
  • Net profit attributable to equity holders of SFL totaled €59.2 million, an increase of 149.9%.

Further increases in asset values and NAV
  • The portfolio's appraisal value excluding transfer costs, stood at €2,322 million at 30 June 2005, compared with €2,406 million at 31 December 2004 (down 3.5%) and €2,522 million at 30 June 2004 (down 7.9%). On a comparable portfolio basis, the appraisal value rose 1.8% in the first six months of the year, reflecting SFL's strategic focus on assets with a low sensitivity to changes in market prices (offices and retail properties in the Paris central business district).
  • The occupancy rate remained at a very high 96.8% of available surface areas. For office properties, the rate was 96.4%, compared with a market rate in Paris central business district of 94.3%.
  • Liabilities: borrowings contracted by 9.5% over the period, before IFRS adjustments, to €753.9 million at 30 June 2005 from €823.7 million at 31 December 2004. The loan-to-value ratio improved to 25.0%, providing SFL with considerable borrowing capacity.
  • NAV (including transfer costs) at 30 June 2005, calculated on the basis of the IFRS accounts, amounted to €40.8 per share (€37.8 excluding transfer costs). This represented an increase of 1.6% compared with 31 December 2004 (€40.1 per share) and of 8.1% compared with 30 June 2004 (€37.8 per share).

Source: SFL

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