10 November 2011 13:37
Price Sensitive economic-financial results

The Board of Directors approves the Interim Management Statement at 30 September 2011

Significant new growth of all the consolidated results also posted in the first nine months of 2011 (vs.the first nine months of 2010):

  • Total operating revenue: €92.8 million (an increase of 10.3% with respect to the €84 million posted at 30 September 2010)
  • Revenue from core business: €91.1 million (an increase of  8.3% with respectto the €84 million posted at 30 September 2010)
  • Total EBITDA: €66.8 million (an increase of 10.6% with respect to the €60.4 million recorded at  30 September 2010)
  • Core business EBITDA MARGIN: 72.9%(an improvement with respect to the 71.9% reported at 30 September 2010)
  • The Group’s portion of net profit: €39.6 million (an increase of 74.9% with respect to the €22.6 million posted at 30 September 2010)

Today, in a meeting chaired by Gilberto Coffari, the Board of Directors of IGD – Immobiliare Grande Distribuzione SIIQ S.p.A. (“IGD”), leading owner and manager of retail shopping centers in Italy and listed on the STAR segment of the Italian Stock Exchange, examined and approved the Interim Management Statement at 30 September 2011 which shows the Group’s portion ofnet profit for the period a t€39.6 million, in increase of 74.9% with respect to the €22.6 million posted at 30 September 2010, in addition to a rise intotal operating revenue (+10.3%) and in EBITDA (+10.6%).

Principal consolidated results for the first nine months of 2011

The IGD Group’s total operating revenue at 30 September 2011 amounted to €92.8 million, an increase of 10.3% with respect to the €84.1 million posted for the first nine months of 2010. This growth is attributable to an increase in the sales generated by the core business and the new acquisitions made between the end of 2010 and the first months of 2011, as well as the sale of the first properties relative to the “Porta a Mare” project in Livorno.

The IGD Group’s revenue from core business at 30 September 2011 amounted to €91.1million, an increase of 8.3%with respect to the €84.1 million recorded in the first nine months of 2010.

In Italy, the LFL growth in rental income during the first nine months of the year with respect to the same period 2010 reached 3.5%, approximately 40% of which is explained by the automatic indexing of the contracts and 60% by the effective contract renegotiation and pre-letting activities.

A total of 82 contracts were signed during the year, 45 of which were renewals and 37 turnovers with an average upside of 7.7% (versus 6.8% in the first half).

Particularly positive results were recorded in shopping centers which underwent restyling, such as Le Porte di Napoli in Afragola (where the interior work was largely completed) and ESP in Ravenna (the works will be completed by the end of 2011) and in a few centers which will undergo restyling and/or expansion in the near term such as Centro d’Abruzzo, Porto Grande and ESP.

Of note is the completion of the pre-letting phase relative to the B block of the shopping center I Bricchi di Asti.

The market continues to be difficult in Rumania, where, moreover, consolidation of the tenant portfolio is still underway (which resulted in contracts being signed with Billa – the Rewe Group – for the opening of two supermarkets between the end of 2011 and the beginning of  2012, as well as with Drogerie Markt for the opening of two new stores in December 2011);  overall average rents dropped further.

As a whole, rental incomeat 30 September 2011 rose 8.1% due to the effective contract renegotiation and pre-letting activities, as well as to the new openings and acquisitions made in 2010 and the first half of 2011.

Revenue from services  in the first nine months of 2011 rose 13% with respect to the same period in 2010 due primarily to the mandates granted for the management of both newly opened and third party centers.

At 30 September 2011, revenue from trading – a new type of revenue stream found in the Group’s income statement related to the “Porta a Mare” project in Livorno – amounted to €1.7 million and are attributable to the sale of a portion of the office building found inside Palazzo Orlando.

Direct costs, pertaining to the core business and including personnel expenses, in the first nine months of 2011 amounted to €18.2 million, an increase of 8.8% with respect to the same period in the prior year.

This item was impacted, in particular, by the increase in provisions for receivables relative to the Darsena City Shoppping Center. These costs represent 20.01% of core business revenue. General expenses for the core business, including payroll costs at headquarters, amounted to €6.5 million at 30 September 2011, a drop of  5.9%. These costs represent 7.10% of operating revenue.

Total EBITDA in the first nine months of 2011 amounted to €66.8 million, an increase of 10.6% with respect to the €60.4 million recorded at 30 September 2010.

The IGD Group’s core business EBITDA at 30 September 2011 reached €66.4 million, an increase of 9.7%  with respect to the €60.5 million posted at 30 September 2010.

EBITDA margin for the core business at 30 September 2011 reached 72.89%, an improvement when compared to the 72.02% recorded in the first nine months of 2010.

The IGD Group’s pre-tax profit in the first nine months of 2011 rose 76.92% from the €25.6 million reported at 30 September 2010 to €45.3 million.

The IGD Group’s tax burden, current and deferred, at 30 September 2011 amounted to €5.7 million, reflecting a tax rate of 12.6% compared to 11.7% in the same period of the prior year.  The increase is primarily attributable to the increase in fair value which, as noted, under the SIIQ regime is still subject to ordinary tax rates.  Net of this effect and of contingencies, the tax rate comes in at 8.01%.

The Group’s portion of net profit at 30 September 2011 amounted to €39.6 million, an increase of 74.9% with respect to the €22.6 million recorded at 30 September 2010.

The Funds from Operations (FFO) rose from €32.1 million at 30 September 2010 to approximately €33.7 million at 30 September 2011, an increase of 4.8%.

The IGD Group’s net debt at 30 September 2011 amounted to €1.124 billion, compared to €1.017 billion at 31 December 2010. The increase is primarily attributable to the new investments made during the period.

At 30 September 2011 the gearing ratio (debt to equity ratio) came in at 1.44, compared to 1.37 at 30 June 2011.  The “adjusted” gearing ratio – calculated as the ratio of net adjusted financial debt and net adjusted equity (which do not reflect the mere accounting effect of the fair value valuation of derivatives) – at 30 September 2011 came in at 1.37, compared to 1.34 at 30 June 2011.

“In the fourth quarter of the year the Group believes that it will be able to confirm the positive results reported at 30 September. The trend in rental income will not, in fact, be impacted by substantial changes over the next few months thanks to the effective management of the tenant mix, pre-letting and of the centers’ occupancy” Claudio Albertini, IGD – Immobiliare Grande Distribuzione SIIQ S.p.A.’s Chief Executive Officer stated.  “More specifically, in line with the company’s targets and plans, in FY2011 we expect to see growth in all the key financial and economic indicators such as revenue, ebitda, ebitda margin and funds from operations. We are also aware that, due to the difficult reference scenario, over the next few months we must constantly assess and monitor the market, while also, as a Group, paying particular attention to the economic sustainability of the tenants, as we have, moreover, done quite effectively over the past few years.”