Deutsche Euroshop Newsroom

Corporate News

18.04.2008

Deutsche EuroShop: 2007 better than expected as a year of transition – jump in revenue and profit forecast for 2008

 

  • Revenue: Euro 95.8 million, EBIT: Euro 77.2 million

  • Net asset value per share: Euro 26.91

  • Earnings: Euro 94.2 million

  • Tax-free dividend once again at Euro 1.05 per share

     

  • Approximately 16% increase in revenue and profit in 2008

     

 

 

At its annual earnings press conference in Hamburg today, shopping center investor Deutsche EuroShop AG presented its results for the past financial year. The Company exceeded its own forecasts for 2007.

 

Revenue of Euro 95.8 million exceeded the previous year’s figure by 3.1% (Euro 92.9 million, original forecast: Euro 92 million-Euro 94 million). Space-adjusted revenue (like-for-like) increased by 3.0% in the year under review. With an EBIT of Euro 77.2 million (forecast: Euro 71 million-Euro 73 million), operating earnings before tax (EBT) without measured gains amounted to Euro 37.7 million (forecast: Euro 30 million-Euro 32 million).


Claus-Matthias Böge, spokesman for Deutsche EuroShop’s Executive Board, expressed satisfaction with the results: “The fact that we were able to narrowly exceed all three forecasts again emphasises the high quality and high yield of our shopping center portfolio.”

 

The measurement gains and losses item fell year-on-year by Euro 21.5 million from Euro 72.3 million to Euro 50.8 million. Our newly opened center in Gdansk was recognised for the first time at market value. This resulted in the recognition of measurement gains amounting to Euro 4.5 million. The other properties were upgraded in value on average by 3.1%. The average interest rate of 6.38% (previous year: 6.44%) was used for discounting future net income in the discounted cash flow model. On the basis of independent external appraisals, the real estate portfolio has an initial net yield of 5.40% for the 2007 financial year, compared with 5.39% in the previous year. The inclusion of the Galeria Baltycka raises initial net yield to 5.49%.

 

In connection with the corporate tax reform, the corporation tax rate will be reduced from 25% to 15% from 2008. For this reason the deferred tax provisions which were recognised in previous years was correspondingly adjusted. This led to a reversal amount of Euro 29.7 million, recognised in income

Consolidated profit of Euro 94.2 million trailed behind the previous year’s record figure of Euro 100.3 million by 6.1%.

 

Earnings per share (basic) amounted to Euro 2.74, compared with Euro 2.92 in the previous year. Of this amount, Euro 0.91 per share (+18%) is attributable to operations (2006: Euro 0.77) and Euro 0.97 (-35%) to measurement gains (2006: Euro 1.49). Additional operating profit of Euro 0.86 per share was incurred from the reversal of deferred tax provisions. In addition to this extraordinary share of earnings, there were gains of Euro 0.67 per share in the previous year from the disposal of two shopping centers.

 

Due to the successful financial year, the Executive Board and Supervisory Board will propose to the shareholders at the Annual General Meeting on 19 June 2008 in Hamburg that an unchanged dividend of Euro 1.05 per share be distributed for financial year 2007.

 

For the 2008 financial year, Deutsche EuroShop anticipates revenue of between Euro 110 million and Euro 113 million. Not only the openings of Stadt-Galerie shopping centers in Hamelin and Passau have an effect in this regard, but the Galeria Baltycka in Gdansk also delivered revenue contributions for the first time for a full financial year. In 2009, the shopping centers in Hamelin and Passau also will contribute for the first time to revenue over 12 months. Therefore, we are expecting that revenue will increase during the 2009 financial year to between Euro 119 million and Euro 121 million.

 

Earnings before interest and taxes (EBIT) will be in the range of Euro 90 million-Euro 92 million in the current financial year. In 2009, once all properties currently under construction have opened, this is expected to increase to between Euro 100 million and Euro 102 million. Deutsche EuroShop is reckoning with earnings before taxes (EBT) without measured gains, of between Euro 43 million and Euro 45 million for financial year 2008, and with between Euro 49 million and Euro 51 million in financial year 2009.

 

 

The Deutsche Prüfstelle für Rechnungslegung (DPR – German Financial Reporting Enforcement Panel) submitted Deutsche EuroShop AG’s consolidated financial statements for the 2006 financial year to a random audit pursuant to section 342b (2) 3) of the Handelsgesetzbuch (HGB – German Commercial Code). The audit revealed that Deutsche EuroShop AG had made no disclosures in its notes to the consolidated financial statements regarding proportionately consolidated companies in accordance with IAS 31.54 et seq and to operating leases as lessor in accordance with IAS 17.56 (detection of error). The oversight regarding these disclosures has been rectified in the consolidated income statement for the 2007 financial year.


Webcast of the conference call

Deutsche EuroShop will webcast its English conference call on Friday, 18 April 2008, at 04:00 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

2007

2006

+/-

Revenue

95.8

92.9

3%

EBIT

77.2

86.3

-11%

Net interest expense

-50.1

-41.0

-22%

EBT

77.8

117.7

-34%

Consolidated profit

94.2

100.3

-6%

Earnings per share (Euro)

2.74

2.92

-6%

Equity*

974.0

897.9

8%

Liabilities

1,002.3

898.3

12%

Total assets

1,976.3

1,796.2

10%

Equity ratio (%)*

49.3

50.0


Gearing (%)*
103
100

Cash and cash equivalents
109.0
94.2
16%

Net Asset Value

925.1

877.4

5%

Net Asset Value per share (Euro)

26.91

25.53

5%

Dividend per share (Euro)

1.05**

1.05

0%

*incl. Minorities **proposal

 


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