25 August 2011 12:31
Price Sensitive economic-financial results

The Board of Directors approves the half-year financial report at 30 June 2011

The consolidated results in the first half of 2011 show further growth (vs. the first half of 2010):

  • Total operating revenue: €61.7 million (an increase of 9.9% with respect to the €56.2 million recorded at 30 June 2010)
  • Revenue from core business1: €60 million (an increase of 6.8% with respect to the €56.2 million reported at 30 June 2010)
  • Core business EBITDA: €43.6 million (an increase of 9.1% with respect to the €40 million reported at 30 June 2010)
  • Core business EBITDA MARGIN: 72.7% (a rise of 1.5 percentage points when compared to the 71.2% recorded at 30 June 2010)
  • EBIT: €56.2 million (an increase of 73.8% with respect to the €32.3 million recorded at 30 June 2010)
  • The Group’s portion of net profit for the period amounts to €30.2 million (an increase of 115.2% with respect to the €14 million posted at 30 June 2010)
  • Funds From Operations (FFO): €22.8 million (+3.7% with respect to 30 June 2010)
  • Net financial debt: €1.073 billion (versus €1.017 billion at 31 December 2010)
  • Market Value: €1,893.66 million (versus €1,803.98 million at 31 December 2010)

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 2011 which shows consolidated net profit of €30.2 million (+115.2% with respect to 30 June 2010).

 

Principal consolidated results for first half 2011

The IGD Group’s revenue from core business at 30 June 2011 amounted to €60 million, an increase of 6.8% with respect to the €56.2 million posted in first half 2010. More in detail, rental income in first half 2011 increased by 6.5% thanks to the pre-letting of new spaces and contract renewals, as well as the adjustment of rents for inflation, the new openings made in 2010 and the new acquisitions made in the first part of 2011. Revenue from services rose by 12.7% due to the mandates granted for the management of newly opened and third party centers. The IGD Group’s total operating revenue at 30 June 2011, therefore, amounted to €61.7 million, an increase of 9.9% with respect to the €56.2 million posted in the first half of the prior year.

The IGD Group’s EBITDA from core business at 30 June 2011 amounted to €43.6 million, an increase of 9.1% with respect to the €40 million recorded at 30 June 2010. More in detail, in first half 2011 the margin from freehold properties increased 6.9%, from leasehold properties 18%, while the margin from services rose by 17% with respect to first half 2010. Total EBITDA in first half 2011 reached €44 million, an increase of 10.3% with respect to the €39.9 million posted in first half 2010.

Direct costs, pertaining to the core business and including direct personnel expenses, at 30 June 2011 amounted to €11.8 million, an increase of 4.9% with respect to the same period in the prior year. These costs represent 19.6% of core business revenue. General expenses for the core business, including payroll costs, amounted to €4.6 million at 30 June 2011, a drop of 7.5% These costs represent 7.60% of operating revenue, a marked improvement with respect to the same period in the prior year.

EBITDA margin for the core business reached 72.7%, an increase of 1.5 pp with respect to the 71.2% reported in first half 2010. The growth confirms the solid operating trend and the stability of the cost structure.

The IGD Group’s EBIT at 30 June 2011 amounted to €56.2 million, an increase of 73.8% compared to the €32.3 million reported at 30 June 2010. This result benefited from the positive trend in EBITDA and confirms the quality and solidity of the Group’s real estate portfolio.

The IGD Group’s pre-tax profit in first half 2011 rose 127.3% from the €15.5 million reported at 30 June 2010 to €35.3 million.

The IGD Group’s tax burden, current and deferred, at 30 June 2011 amounted to €5 million, reflecting a tax rate of 14.4% compared to 9.80% in the same period of the prior year. The increase is primarily attributable to the increase in fair value.

The Group’s portion of net profit at 30 June 2011 amounted to €30.2 million, an increase of 115.2% with respect to the €14.03 million reported in first half 2010.

The Funds from Operations (FFO) , a significant indicator used in the real estate market to define the cash flow from a company’s operations based on net profit, net of current tax, writedowns, fair value, amortization and depreciation, rose from €22 million at 30 June 2010 to approximately €22.8 million at 30 June 2011, an increase of 3.7%.

The IGD Group’s net debt at 30 June 2011 amounted to €1.073 billion, compared to €1.017 billion at 31 December 2010.

At 30 June 2011 the gearing ratio (debt to equity ratio) came in at 1.37, compared to 1.31 at 31 December 2010.

The Real Estate Portfolio at 30 June 2011

Based on CB Richard Ellis’s and Reag’s independent appraisals, the market value at 30 June 2011 of the Igd Group’s real estate portfolio reached €1,893.66 million, compared to €1,803.98 million at 31 December 2010. In the first half of the year the hypermarket found in the Coné Shopping Center in Conegliano Veneto, where IGD already owns the shopping mall, as well as a retail property (City Center Project) on Via Rizzoli in the historic heart of Bologna in via Rizzoli and a portion of an office building in Bologna of which IGD already owns the lower floors and where its headquarters are located, were added to the portfolio.

Claudio Albertini, Chief Executive Officer of IGD – Immobiliare Grande Distribuzione SIIQ S.p.A. stated: “The results achieved in first half 2011 confirm, once again, the validity of the strategies we have adopted to reach our economic-financial targets and the capacity of our rental contracts to generate steady, visible revenue streams over time. The quality and the profitability of our real estate assets also finds confirmation in the appraisals issued by the independent experts at 30 June which were positive for the first time in three years”. “In a very uncertain and volatile environment – Albertini continued – IGD can count on a solid asset structure and a revenue base which are able to both fuel and sustain cash generation. For this reason we look ahead at our future commitments, in terms of both our ability to move forward with our investment pipeline and provide our shareholders with interesting returns, as serenely as ever.”