Deutsche Euroshop Newsroom

Corporate News

09.11.2007

Deutsche EuroShop: Raised Forecast after good First Nine Months Result

  • Revenue Euro 68.9 million (+0%)
  • EBIT Euro 55.6 million (-3%)
  • Positive impact of German business tax reform
  • Profit Euro 44.5 million (+47 %)
  • Earnings per share Euro 1.29 (Euro 0.88) 

In the first nine months of financial year 2007 Deutsche EuroShop realised with a revenue increased from Euro 68.7 million to Euro 68.9 million an EBIT of Euro 55.6 million (Euro 57.2 million). The consolidated profit increased by 47% to Euro 44.5 million (Euro 30.2 million) as a positive result of the German business tax reform. On the basis of the good first nine months result the Executive Board raises the forecast for the full year 2007 slightly.

 

Revenue maintained at previous year's level

Revenue for the first nine months of 2007 was Euro 68.9 million and thus on a par with the same period of the previous year. A 2.9% rise in revenue was recorded with regard to the portfolio properties, based on comparable floor space. Other operating income fell from Euro 1.5 million to Euro 0.8 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.

 

Higher operating and administrative costs for property

Due to the expenses relating to the construction projects that were not eligible for capitalisation, current property expenses rose by Euro 0.2 million to Euro 10.6 million. Other operating expenses rose by Euro 0.7 million year-on-year, from Euro 2.7 million to Euro 3.4 million. This was primarily due to realised currency effects relating to the Polish investment in Gdansk, which are included in this item.

 

EBIT slightly down

Earnings before interest and taxes (EBIT) fell by Euro 1.6 million (-3%), from Euro 57.2 million to Euro 55.6 million.

 

Net finance costs as planned

Net finance costs amounted to Euro 29.7 million, Euro 0.6 million more than the Euro 29.1 million recorded during the previous year. This can be attributed to higher interest expenses in relation to the portfolio properties and lower interest income from time deposit investments. Additionally, investment income from the Polish investment in Wroclaw was included under this item last year, and this fell slightly in 2007.

 

Normal development of measurement gains/losses during the financial year

Measurement gains/losses fell from Euro 5.1 million to - Euro 0.3 million. This figure was 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 25.6 million. This was Euro 7.6 million (23%) down on the same figure for the previous year (Euro 33.2 million), which was influenced by the afore-mentioned one-off effects.

 

Positive impact of German business tax reform

The reform of German business taxation, which will take effect from 1 January 2008, and the resulting reduction in the rate of corporation tax from 25% to 15% meant that a portion of the provisions for deferred taxes created in previous years was written back during the third quarter. This one-off positive effect contributed Euro 23.8 million to profit.

 

Consolidated profit: Euro 44.5 million, earnings per share: Euro 1.29

Consolidated profit was Euro 44.5 million, up by Euro 14.3 million (+47%) on the same period of the previous year (Euro 30.2 million). Earnings per share increased from Euro 0.88 to Euro 1.29 (+47%). Of this, Euro 0.61 related to the operating result, Euro 0.69 to the reversal of deferred taxes and
- Euro 0.01 to measurement gains/losses.

 

Forecast

Galeria Baltycka in Gdansk opened its doors for business on 4 October 2007. The Executive Board expects this shopping center, in which Deutsche EuroShop holds a 74% stake, to contribute Euro 11.3 million per year to the Group's revenue. DES’ shopping center portfolio currently still comprises two construction projects. The Hamelin property is due to be opened in March 2008. The topping-out ceremony for the Stadt-Galerie in Passau was held on 11 October, with the center scheduled to open in autumn 2008. Preletting rates for both properties are already high, at 95% for Hamelin and 76% for Passau.

 

As investor interest in retail properties in German and Europe is maintained, prices for portfolio properties and planned new builds are remaining high. Deutsche EuroShop is therefore continuing to adopt a reserved approach and is not expecting to make any new investments in 2007.

 

The Executive Board is able to raise the forecast for the 2007 financial year as follows, on the basis of the figures for the first nine months: Revenue of Euro 93 to 95 million (previous forecast: Euro 92 to 94 million / 2006: Euro 92.9 million), earnings before interest and taxes (EBIT) of Euro 72 to 74 million (Euro 71 to 73 million / Euro 86.3 million), earnings before tax (EBT) excluding measurement gains and losses of Euro 31 to 33 million (Euro 30 to 32 million / Euro 45.4 million).

 

The Executive Board and the Supervisory Board will, as things currently stand, propose to the Annual General Meeting on 19 June 2008 that an unchanged dividend of Euro 1.05 per share be distributed.

 

 

Webcast of the conference call

Deutsche EuroShop will webcast its English conference call on Friday, 9 November 2007, at 10:00 a.m. CET live on the Internet. The webcast can be accessed at the Company's website at http://www.deutsche-euroshop.com/ir.

At the same internet address the complete Interim Report is available as PDF file and as interactive online version.

 

 

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.-30.09.
2007

01.01.-30.09.
2006

+ / –

Revenue

68.9

68.7

0%

 

EBIT

55.6

57.2

-3%

Net interest expense

-29.7

-29.1

-3%

EBT

25.6

33.2

-23%

Consolidated profit

44.5

30.2

47%

Earnings per share (Euro) 1)

1.29

0.88

47%

 

 

 

 

 

30.09.2007 

31.12.2006

 

Equity

812.5

796.3

2%

Minorities

101.0

101.6

-1%

Liabilities

858.8

797.3

8%

Total assets

1,850.1

1,796.2

3%

Equity ratio (%) 2)

49.4

50.0

 

Gearing (%)

102

100

 

Cash and cash equivalents

63.1

96.9

-35%

1) undiluted 2) incl. minorities 

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