28 August 2012 13:46
Price Sensitive economic-financial results

The Board of Directors approves the half-year financial statemet at 30 June 2012

In first half 2012, revenue from core business rose despite the persistent drop in consumption and the difficult financial environment:

  • Revenue from core business: €61.5 million (€59.2 million in first half 2011, with an increase of 3.9%)
  • Like-for-like revenue inItaly:€50.8 million (€50.2 million in first half 2011, with an with an increase of 1.2%)
  • Core business EBITDA: €43.1 million (€43.6 million in first half 2011)
  • The Group’s portion of net profit: €8.3 million; down with respect to first half 2011 (€30.2 million) due primarily to the impact of property writedowns and fair value adjustments
  • Net financial debt:  unchanged at €1.095 billion (versus €1.094 billion at 31 December 2011)
  • Gearing ratio : 1.39 (compared to €1.38 at 31 December 2011)

 

Today,  in a meeting chaired by Gilberto Coffari, the Board of Directors of IGD – Immobiliare Grande Distribuzione SIIQ S.p.A. (“IGD” or the “Company”), a company active in the retail real estate sector and listed on the Star segment of the Italian Stock Exchange, examined and approved the Half-Year Financial Report at 30 June 2012.

“The growth in our Group’s revenue from core business in the first half of 2012, posted despite what continues to be a very difficult environment,  confirms the ability of our real estate assets to generate income and, overall, the validity of our business model, thanks also to the focus on the Shopping Center sector” Claudio Albertini, Chief Executive Officer of IGD – Immobiliare Grande Distribuzione SIIQ S.p.A. stated. “Even in the current complex phase, characterized by a significant drop in consumption and substantial financial stress due to elevated spreads, we expect to see stable core business revenue and profitability in the second half of the year, in line with the trend reported in the first half ”.

 

Principal consolidated results at 30 June 2012

In first half 2012 the IGD Group’srevenue from core business amounted to  €61.5 million, an increase of 3.9% with respect to the €59.2 million posted in first half 2011, thanks to the positive impact of the new acquisitions made in 2011.  More in detail, rental income at 30 June 2012 rose 4.1%, while revenue from services was basically unchanged with respect to 30 June 2011. Rental income in Italy amounted to €53.4 million at 30 June 2012, an increase of 5.1% with respect to first half 2012 and of 1.2% like-for-like.

In first half  2012 the IGD Group’s core business EBITDA came in at €43.1 million, a drop of 1.2% with respect to the €43.6 million recorded at 30 June 2011 due to an increase in direct costs pertaining to the core business (including personnel expenses),  which rose by 24.1% with respect to the prior year to €13.7 million. This change is attributable primarily to the estimated increase in charges linked to IMU (+54%) and provisions for doubtful accounts.  These costs amounted to 22.3% of revenue. General expenses for the core business (including payroll costs at headquarters), reached €4.7 million versus €4.6 million in first half 2011. General expenses as a percentage of core business revenue reached 7.7%, unchanged with respect to the prior year.

EBITDA margin for the core business reached 70.1%versus 73.7% at 30 June 2011, due primarily to the more than proportional increase in direct costs with respect to revenue.

The IGD Group’s EBIT at 30 June 2012 amounted to €30.8 million, versus €56.2 million at 30 June 2011. The change is explained primarily by the impact of property writedowns and fair value adjustments.

The tax burden, current and deferred, at 30 June 2012 amounted to a positive €1.7 million versus a negative €5 million in the same period of the prior year.

The Group’s portion of net profit at 30 June 2012 amounted to €8.3 million, versus €30.2 million in first half 2011; as explained above, this change is due to the impact of property writedowns and fair value adjustments on EBIT, as well as the increase in financial charges.

The Funds from Operations(FFO), an indicator used widely in the real estate market to define the cash flow generated by a company’s core business[1], reached approximately €18 million at 30 June 2012,compared to €22.3 million at 30 June 2011.

At the end of first half 2012 the gearing ratio came in at 1.39 (1.38 at 31 December 2011). The average cost of debt reached 4.3% at 30 June 2012, versus 4.1% at 31 December 2011.

The IGD Group’s net debt at 30 June 2012 amounted to €1.095 billion, largely unchanged with respect to the €1.094 billion recorded at 31 December 2011.

The Real Estate Portfolio at 30 June 2012

As previously disclosed to the market on 1 August 2012, based on the appraisals of the independent experts CB Richard Ellis and Reag, the market value of the IGD Group’s real estate portfolio at 30 June 2012 reached  €1,913.66 million,largely unchanged with respect to the €1,924.6 million recorded at 31 December 2011.

 

[1] It is calculated based on pre-tax profit, net of non-monetary items (deferred tax, writedowns, fair value adjustments, amortization, depreciation and other), as well as the impact of income from equity investments and revenue from property sales. The figure recorded at 31 December 2011, however, included extraordinary items and gains relating to disposals, while in2012, in order to highlight the core business revenue streams, these items were excluded.  The figure for first half 2011 was, consequently, adjusted.