Colonia Real Estate AG reports positive quarterly figures
Consolidated earnings of 7.7 million Euros / Increase in rental income and strongly reduced costs in Q1 / NAV of 11.92 Euros also improved over Q4 2008
In absence of rental income of the hotel portfolio sold in 2008, net rental income (NRI) increased in annual comparison from 21.6 to 22.2 million Euros. Net operating income (NOI) rose disproportionately from 10.1 to 10.6 million Euros. As a visible result from the comprehensive cost reduction program the general administrative costs declined by 54 percent from 6.3 to 2.9 million Euros. This figure includes restructuring costs totaling € 0.3 million. The positive developments of rental income, a tight cost management and the extraordinary revenues from refinancing the north German real estate portfolio of 8.7 million Euros mainly led to the first quarter profit. Without any necessary revaluation and due to the positive result NAV per share grew to 11.92, up from 11.65 Euros as of the end of 2008.
Besides the positive rental development the vacancy rate fell from 15.3 percent in the first quarter of 2008 to 13.2 percent. Average rent per square meter increased by 2 percent to 4.62 Euros year on year. Although the Asset Management business boosted revenues by 12 percent to 1.4 million Euros (Q1 2008: 1.2 million Euros), the contribution to earnings was negative at 0.3 million Euros due to a traditionally weak first quarter, as compared to -0.4 million Euros for the same period last year. The cost reduction measures implemented in this segment in the past three months will likely appear in the following quarters.
CEO Stephan Rind expressed cautious optimism about the outlook for the rest of 2009. "The good result of the first quarter 2009 is a signal for the turnaround of the company. The German residential real estate market shows first signs of stabilization. From a historical point of view rents are relatively independent from economic cycles and crisis-proofed. Our active local letting management and extensive capital expenditures in prior years are the basis for further earnings improvements. Based on strong cost reductions and before any sales revenues and revaluations we expect a positive operative result for 2009."
However, sales will be a topic for fiscal 2009. "We adjusted our sales activities to the current market situation. The increasing interest of investors for defensive German residential real estate and the good financing conditions for smaller investments in good city locations were triggers to focus on single apartment buildings and apartments," says Rind. "With already sealed contracts for the second quarter we expect revenues for the whole year of about 30 million Euros. Rising fear of inflation may even further increase this number."
A conference call with analysts will take place today, May 14, 2009, at 2:00 pm CET. Anyone wishing to can follow it live online at http://cre140509-live.cyber-presentation.de. The complete quarterly report will be available for downloading starting at 12:00 pm at www.cre.ag/31/Investor_Relations/Finanzberichte.htm.
Colonia Real Estate AG
With around 20,000 residential units and total assets of approximately 900 million Euros, Colonia Real Estate is Germany's third largest listed residential property company. The asset management of the CRE Group has more than 2.1 billion Euros real estate assets under management.