Final Results 2008

RNS Number : 9939N

Wereldhave NV

27 February 2009

 



Results 2008 Wereldhave

• Higher direct result per share

• Lower profit due to negative revaluations

• Optional dividend of EUR 4.65 per share

Profit

The profit for 2008 - including minority interest - amounted to EUR 8.8 million (2007: EUR 229.6 million). The profit decreased due to a downward revaluation of the portfolio and due to lower profits on disposals than in 2007. The revaluation of the portfolio was negative in all countries, with the exception of Belgium and Finland. The value of the portfolio decreased by in total EUR 112.6 million. The surplus on disposals amounted to EUR 4.3 mln, mainly caused by property disposals. Profit per share, net of minority interests, amounted to EUR 0.02 per share (2007: EUR 10.42). 

Direct result

The direct result for 2008 (including minority interest) amounted to EUR 109.4 million and is thus EUR 1.4 million higher than in 2007. The increase was (including exchange rate differences) the result of higher net rental income (EUR 1.1 million), lower interest expenses (EUR 2.3 million) and lower other income and expenses (EUR - 1.7 million). Lower average exchange rates of the British Pound and the US dollar had a negative effect of EUR 2.5 million in total. 

The decrease in interest expenses was due to lower interest rates, in particular in the United States. Lower interest rates are advantageous to Wereldhave because approximately 75% of its loans have been financed at variable interest rate. The average interest rate at year-end 2008 stood at 3.7% (2007: 5.4%). As a result of a non-recurring gain in 2007 in connection with the buying out of a lease, other income and expenses decreased in 2008 by EUR 1.7 million. 

The occupancy rate increased compared to 2007 to 94.7% (2007: 94%). By sector, occupancy rates during 2008 were as follows: offices 90.9%, retail 98.6%, industrial 97.2% and residential 92.1%.

Indirect result

The indirect result for 2008 (including minority interest) amounted to EUR - 100.6 million (2007: EUR 121.6 million). The average yield on the portfolio used in the valuation increased by approximately 0.3% in 2008, whereby the weighted net initial yield of the portfolio amounted to approximately 6.2%. The rise in the initial yields has resulted in a negative revaluation of the property portfolio as at 31 December 2008. The negative effect of the increase in the yield (EUR 174.7 mln) was partially set off by a valuation effect of higher rents and by other effects (EUR 62.1 mln), resulting in a negative revaluation of property of EUR - 112.6 million. The revaluation of financial instruments (interest derivatives) amounted to EUR 4.7 million. 

The surplus on disposals amounted to in total EUR 4.3 million in 2008 (2007: EUR 17.4 million). Lower property valuations resulted in a decrease in deferred taxes on the indirect result by EUR 10.0 million (2007: EUR - 22.6 million). Other financial income and expense increased to EUR -5.9 million (2007: EUR - 0.5 million). This comprises exchange rate differences and higher pension costs due to an extra payment to the pension fund.

Equity

The balance sheet total rose by EUR 20.1 million. An increase from the acquisition of the San Diego office building was offset by lower valuations and exchange rate effects. At the end of 2008, equity including minority interests before appropriation of the proposed dividend amounted to EUR 1,860.2 million. This represents 65.9% of the balance sheet total (2007: 70.4%). No new shares were issued during 2008 and no convertible bonds opted for conversion. As at 31 December 2008, a total of 20,781,735 ordinary shares were in issue. The net asset value per share before profit appropriation as at 31 December 2008 was EUR 83.74 (2007: EUR 89.06).

Dividend proposal

An optional dividend of EUR 4.65 will be proposed to the General Meeting of Shareholders for 2008, of which EUR 2.55 in cash in order to comply with the fiscal distribution obligation, after deducting withholding tax, and EUR 2.10 in cash or in shares, at the option of the shareholder. This distribution will be charged to the reinvestment reserve and therefore no dividend tax will be due. The ratio of the dividend that is to be paid out in shares will be announced on March 20, 2009 after trading hours. With a dividend of EUR 4.65, the payout ratio amounts to 94.5%.

Composition of the Board of Management

At the Annual General Meeting of Shareholders on 2 April 2009, it will be proposed to appoint Mr J. Pars as a statutory director of Wereldhave N.V.. Mr Pars joined the Board of Management of Wereldhave as of January 1, 2009. 

Prospects

Wereldhave has a strong financial position. In recent years, Wereldhave deliberately made conservative use of funding with loan capital and therefore Wereldhave has a strong financial base. Wereldhave has no refinancing obligations in 2009. The existing credit facilities are sufficient for Wereldhave to be able to complete its property development programme up to and including 2010. As these projects are carried out for Wereldhave's own account and risk, Wereldhave has no obligations to third parties to complete or purchase. Wereldhave is able to profit from lower interest rates as approximately 75% of its loans are at variable interest rates.

At the end of 2008, vacancies arose in the portfolio in France and the United States. Although Wereldhave is doing everything possible to let the vacant space, a lower occupation rate will have to be taken into account for 2009. Given the quality of the portfolio, Wereldhave is convinced that it will be able to find new tenants as soon as corporate investments recover. 

Wereldhave expects the cap rates on property to rise further in 2009, and expects property values to fall. The completion of Wereldhave's own development programme in the United States and in Belgium will be continued.

The Hague, February 27, 2009

Board of Management Wereldhave N.V.

 

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