Deutsche Euroshop Newsroom

Corporate News

14.08.2007

Deutsche EuroShop: H1 result confirms forecast

  • Revenue Euro 45.6 million (-1%)
  • EBIT Euro 37.8 million (-3%)
  • Profit Euro 13.5 million
  • Earnings per share Euro 0.79 (Euro 0.39 split adjusted) 

With a revenue of Euro 45.6 million (period of previous year: Euro 45.9 million), an EBIT of Euro 37.8 million (Euro 39.0 million) and a consolidated profit of Euro 13.5 million (Euro 23.9 million) Deutsche EuroShop is after the first six months fully according to plan to achieve the forecast for 2007. The result of the comparison period 2006 was positive influenced by one-time effects.

 

Revenue maintained at previous year's level

Revenue for the first six months of the 2007 financial year was Euro 45.6 million and thus at the same level as during the previous year. The portfolio properties increased their revenues by 3.2% and were able to almost completely offset the absence of income from the foreign properties that were disposed of in 2006.

 

Other operating income fell from Euro 1.5 million to Euro 0.6 million. The figure for the same period of last year included the profit of Euro 0.8 million made on the sale of the French shopping center.

 

Expenses only slightly changed

Due to the absence of cost items for the properties that had been sold, current property expenses fell by Euro 0.1 million to Euro 6.4 million. Other operating expenses amounted to Euro 2.0 million, which represents a slight rise of Euro 0.2 million on the same period of the previous year.

 

EBIT slightly down

Earnings before interest and taxes (EBIT) fell by Euro 1.2 million (-3%), from Euro 39.0 million to Euro 37.8 million.

 

Net finance costs as planned

Net finance costs amounted to Euro 19.7 million, Euro 0.5 million more than the Euro 19.2 million recorded during the previous year. This can be mainly attributed to a lower income from the Polish investment, which was according to plan.

 

Measurement gains/losses slightly positive

Measurement gains/losses fell from Euro 8.2 million to Euro 0.2 million. This figure was very positively influenced by consolidation and currency effects during the same period of 2006.

 

EBT down without one-off effects

Pre-tax profit (EBT) fell to Euro 18.2 million, Euro 9.9 million (54%) down on the same period of last year (Euro 28.1 million) due to a lack of one-off effects.

 

Consolidated profit: Euro 13.5 million = earnings per share of Euro 0.79

Consolidated profit was Euro 13.5 million, down by Euro 10.4 million (-44%) on the previous year (Euro 23.9 million). Earnings per share fell from Euro 1.39 to Euro 0.79 (-43%). Of this, Euro 0.78 (-6%) related to the operating result and Euro 0.01 to measurement gains/losses.

 

Forecast

Deutsche EuroShop’s shopping center portfolio currently comprises three construction projects. Galeria Baltycka in Gdansk will be opened on schedule in autumn 2007, the Hamelin property is due to open its doors in spring 2008 and the foundation stone of the Stadt-Galerie in Passau was laid in April, with the opening of this shopping center scheduled for autumn 2008. Preletting rates for all three properties are already satisfactory at 100% for Gdansk, 92% for Hamelin and 70% for Passau.

 

It is the Executive Board’s continued aim to achieve an annual average increase in the portfolio of between Euro 100 million and Euro 150 million. In spite of the current turbulences at the capital markets the investor interest in shopping centers in German and Europe is unchanged. Prices are not rising at the moment but stagnating on a high level. Lending rates have climbed by some 75 basis points since the beginning of the year, to a level of around 5.3%. At the end of the first quarter of 2007 the Executive Board’s yield expectations for new investments were in excess of 5%, which was already a difficult feat to achieve at that time. Since then, in view of rising interest rates, this criterion was already in the second quarter increased to 5.5%.

 

The Executive Board is therefore adopting a still reserved short-term approach to further investments in shopping centers. Should favourable opportunities present themselves, however, Deutsche EuroShop would act accordingly. The expansion of the Main-Taunus-Zentrum in Sulzbach, near Frankfurt, Germany, adding a further 13,000 sqm of rental space, could offer an attractive investment opportunity. A positive preliminary decision on the building project has already been made. Intensive work is now being carried out to prepare the application for planning permission. The project cannot be expected to get off the ground before the end of the year, however.

 

Based on the result for the first half-year, the Executive Board is upholding its forecast for the 2007 financial year as a whole. Based on the planning, revenue will be between Euro 92 and 94 million and thus on a par with last year (2006: Euro 92.6 million). Earnings before interest and taxes (EBIT) should be between Euro 71 and 73 million (2006: Euro 86.3 million). In terms of profit before taxes (EBT) excluding measurement gains or losses, a figure of between Euro 30 million and Euro 32 million (2006: Euro 45.4 million) is expected.

 

The Company is confident to be able to distribute a tax-free dividend of Euro 1.05 per share for the 2007 financial year.

 

Webcast of the conference call

Deutsche EuroShop will webcast its English conference call on Tuesday, 14 August 2007, at 4:00 p.m. CET live on the Internet. The webcast can be accessed at the Company's website at http://www.deutsche-euroshop.com/ir.

 

Deutsche EuroShop – The Shopping Center Company

Deutsche EuroShop is Germany’s only public company, that invests solely in shopping centers in prime locations. The MDAX-listed Company currently has equity interests in 16 European shopping centers in Germany, Austria, Hungary and Poland.

 

 

Key Data of Deutsche EuroShop (IFRS)

in Euro million

01.01.-30.06.
2007

01.01.-30.06.
2006

+ / –

Revenue

45.6

45.9

-1%

EBIT

37.8

39.0

-3%

Net interest expense

-19.7

-19.2

-3%

EBT

18.2

28.1

-35%

Consolidated profit

13.5

23.9

-43%

Earnings per share (Euro) 1)

0.79

1.39

-43%

 

 

 

 

 

30.06.2007 

31.12.2006

 

Equity

777.1

796.3

-2%

Minorities

101.4

101.6

0%

Liabilities

839.5

797.5

5%

Total assets

1,815.8

1,796.2

1%

Equity ratio (%) 2)

48.4

50.0

 

Gearing (%)

107

100

 

Cash and cash equivalents

77.6

96.9

-20%

1) undiluted 2) incl. minorities 

 

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