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Deutsche Wohnen SE — Interim / Quarterly Report 2007
May 31, 2007
113_10-q_2007-05-31_cda9c698-47c8-490b-acc8-8b07d96f3319.pdf
Interim / Quarterly Report
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INTERIM REPORT January 1 – March 31, 2007
CONTENTS
| Summary | 3 |
|---|---|
| Results and Core Data | 4 |
| Deutsche Wohnen Shares | 7 |
| Outlook | 8 |
| Key Figures | 9 |
| Consolidated Balance Sheet | 10 |
| Consolidated Income Statement | 12 |
| Consolidated Statement of Changes in Equity | 13 |
| Consolidated Cash Flow Statement | 14 |
| Consolidated Segment Reporting | 15 |
| Notes to the Consolidated Financial Statements | 16 |
| Additional Information | 18 |
SUMMARY
- | Number of housing sales recorded in the first quarter of 2007 in line with projections and prior-year level.
- | However, the significantly smaller pipeline from 2006 means few housing sales recognized on the balance sheet and reduced book gains from sales.
- | Consolidated profit reduced by non-recurring effect of impairment loss on undeveloped land.
- | Profit from residential property management up year-on-year due to the consolidation of DB Immobilienfonds 14 properties.
- | Consolidation of DB Immobilienfonds 14 also increases interest expense.
- | Around 1,000 additional residential units purchased up to early April 2007.
RESULTS AND CORE DATA
| Residential property management
By the end of fi scal year 2006, the 2,625 residential units and 27 commercial units managed by DB Immobilienfonds 14 had been fully consolidated. This generated additional rental income for the Group for the fi rst time at the end of the period under review. Around 13 % (EUR 3.2 million) of all estimated rental income totaling EUR 23.7 million is attributable to the consolidation of the DB 14 real estate investment fund. As of March 31, 2007, DB 14's apartments generated average monthly rent of EUR 5.21 per m2 (compared with EUR 5.01 per m2 in the core portfolio).
Deducting vacancies (7.2 %) from the above-mentioned estimated rental income resulted in actual rental income of approximately EUR 21.7 million (March 31, 2006: EUR 19.5 million). Income from the allocation of operating costs also rose by around EUR 0.9 million to EUR 7.0 million due to the consolidation of DB 14. Revenue from residential property management (as reported in the consolidated income statement) totaled EUR 22.6 million (Q1 2006: EUR 20.2 million). Maintenance expenses, on the other hand, remained almost constant at approximately EUR 3.4 million (average of EUR 2.46 per m2).
After depreciation, amortization and impairment losses of EUR 4.0 million (Q1 2006: EUR 3.5 million), the segment result from residential property management improved by EUR 1.4 million or around 11 % to EUR 14.4 million as of March 31, 2007 (Q1 2006: EUR 13.0 million).
| Housing privatization
156 housing sales were reported in the first three months of 2007 on the basis of the sales program (Q1 2006: 193 sales). Because there were only 45 units in the pipeline in 2006 (Q1 2006: pipeline of 173 units from 2005), these sales – with the exception of four residential units that are already recognized on the balance sheet as sold in Q1 2007 – will not be recognized on the balance sheet until later in 2007.
With sales revenue therefore only around EUR 1.2 million (Q1 2006: EUR 7.4 million), unrealized gains from housing privatization amounted to approximately EUR 0.2 million as of March 31, 2007 (Q1 2006: EUR 3.3 million). After deducting selling expenses (around EUR 0.7 million) and vacancies due to sales (around EUR 1.3 million), the gross profit from sales therefore also fell to EUR – 1.8 million (Q1 2006: EUR +1.4 million).
It must be emphasized that, as in past fiscal years, the profit for 2007 will be driven by strong sales in the second half of the year. The Management Board remains confident that sales of between 1,000 and 1,200 residential units will be recognized by the end of 2007.
In addition to the reduction in the number of recognized housing sales already mentioned, revenue was also reduced by a non-recurring effect. In 2005 Deutsche Wohnen sold undeveloped land with building space of approximately 20,000 m2 for which a definitive planning right has yet to be obtained. As the buyer has now indicated its intention to withdraw from the transaction, it is no longer sufficiently likely that the purchase agreement will actually become effective when the planning right is granted as anticipated. An impairment loss in the amount of EUR 2.2 million was therefore recognized. This matter is not expected to further impact consolidated profit in the future. The undeveloped space can in principle be resold, however.
| Other core Group data
Apart from boosting the Group's assets, the fund consolidation referred to earlier increased the Group's fi nancial liabilities compared with Q1 2006 by around EUR 151.4 million. This pushed up interest expense to EUR 2.1 million in the fi rst quarter of 2007, which, netted against interest income, led to a higher fi nance cost year-on-year of EUR 7.9 million (Q1 2006: EUR – 5.9 million).
The "other operating expenses" item in the consolidated income statement increased by approximately EUR 2.6 million compared with Q1 2006 (EUR 3.1 million) to EUR 5.7 million. This is mainly due to a valuation allowance of EUR 2.2 million (see the section on housing privatization). As another component of "other operating expenses", other administrative expenses decreased by approximately EUR 0.4 million. In addition, employee expenses fell by EUR 0.3 million. We aim to reduce administrative expenses in particular even further.
The above-mentioned effects of housing privatization and the consolidation of the DB 14 real estate investment fund were the main factors contributing to the decline in consolidated EBDIT and EBIT to EUR 9.0 million and EUR 5.0 million respectively (Q1 2006: EUR 12.8 million and EUR 9.3 million respectively).
The effects from the housing sales outlined above and the impairment loss on the sale of unde v eloped land are the causes of the consolidated loss before tax of EUR – 2.9 million and the loss after tax of EUR – 3.2 million (Q1 2006: consolidated profi t after tax of EUR 3.1 million).
OUTLOOK
The forecast released in February 2007 puts consolidated profi t in 2007 at EUR 15.0 million. All things being equal, the Management Board is unable to rule out that the impairment loss of EUR 2.2 million recognized in the fi rst quarter of 2007 will not impact the consolidated profi t for the year as a whole. Positive effects on earnings from the 1,000 or so residential units acquired in the fi rst quarter of 2007 (in Münster, the new federal states, Offenbach) have not yet been factored in, however.
The Management Board of Deutsche Wohnen is planning further portfolio acquisitions in the course of fi scal year 2007. The fi nancial preconditions for the target growth are in place in view of the Company's low level of gearing (loan to value ratio currently 50 %) and a number of options for capital increases. The Management Board continues to stress that growth must have a positive effect on profi tability and the Net Asset Value. Nevertheless, the Management Board is reiterating its growth target of doubling the portfolio by the end of 2009.
KEY FIGURES AS OF MARCH 31, 2007
| Key figures – Group | Jan 1 – Mar 31, 2007 |
Jan 1 – Mar 31, 2006 |
Jan 1 – Dec 31, 2006 |
|
|---|---|---|---|---|
| Profit before tax | EUR m | – 2.9 | 3.3 | 31.3 |
| Profit after tax | EUR m | – 3.2 | 3.1 | 31.1 |
| EBIT | EUR m | 5.0 | 9.3 | 46.2 |
| EBITDA | EUR m | 9.0 | 12.8 | 68.0 |
| Gross operating cash flow | EUR m | 1.8 | 10.8 | 101.8 |
| Housing privatization | ||||
| Number of housing units sold in the reporting period reported on the balance sheet date |
units | 4 | 128 | 1,645 |
| Number of privatizations recorded in the reporting period |
EUR per m2 | 156 | 193 | 1,525 |
| Unrealized gains from the sale of properties | EUR m | 0.2 | 3.3 | 43.2 |
| Selling and pre-sale expenses | EUR m | 0.7 | 0.7 | 8.0 |
| Gross profit from sales | EUR m | – 1.8 | 1.4 | 30.1 |
| Residential property management | ||||
| Residential stock | units | 21,000 | 21,658 | 21,005 |
| Total residential space | millions of m2 | 1.33 | 1.38 | 1.33 |
| Revenue from estimated rent* | EUR m | 23.7 | 21.2 | 83.7 |
| Revenue from estimated rent* | EUR per m2 | 5.01 | 4.97 | 5.05 |
| Revenue from actual rent* | EUR m | 21.7 | 19.5 | 76.7 |
| Maintenance expenses* | EUR m | 3.4 | 3.2 | 17.5 |
| Maintenance expenses* | EUR per m2 | 2.46 | 2.42 | 13.43 |
| Gross profit from residential property management | EUR m | 14.4 | 12.9 | 46.0 |
* Not including North Hesse portfolio (acquired in 2004)
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2007
| Assets in EUR | Mar 31, 2007 | Mar 31, 2006 | Dec 31, 2006 |
|---|---|---|---|
| A. Noncurrent assets | |||
| I. Investment property |
949,041,553.49 | 813,693,290.29 | 956,579,764.60 |
| II. Property, plant and equipment |
3,799,267.60 | 4,156,721.15 | 3,897,897.89 |
| III. Intangible assets | 167,444.00 | 40,134.00 | 188,805.00 |
| IV. Noncurrent financial assets | 152,703.52 | 23,691,255.50 | 172,921.87 |
| V. Noncurrent receivables and other noncurrent assets |
146,772.00 | 2,514,013.79 | 145,326.00 |
| VI. Deferred tax assets | 42,420,000.00 | 40,840,000.00 | 42,420,000.00 |
| Total noncurrent assets | 995,727,740.61 | 884,935,414.73 | 1,003,404,715.36 |
| B. Current assets | |||
| I. Properties held for sale and other inventories |
|||
| a) Land without buildings | 2,479,657.75 | 2,636,372.66 | 2,479,657.75 |
| b) Land with finished buildings | 5,908,222.87 | 7,677,592.60 | 5,907,943.42 |
| c) Work in progress, other inventories | 34,476,245.05 | 30,079,996.97 | 28,152,724.93 |
| 42,864,125.67 | 40,393,962.23 | 36,540,326.10 | |
| II. Current receivables and other current assets |
|||
| a) Receivables from rental activities | 3,800,859.84 | 4,266,152.19 | 4,284,329.28 |
| b) Recievables from property sales | 27,879,085.41 | 3,258,227.06 | 47,160,064.98 |
| c) Current tax receivables | 2,057,005.26 | 1,802,732.41 | 1,652,277.65 |
| d) Current receivables and other current assets | 55,349,484.30 | 14,808,386.08 | 10,249,862.73 |
| e) Derivatives | 0.00 | 5,635,000.00 | 0.00 |
| 89,086,434.81 | 29,770,497.74 | 63,346,534.64 | |
| III. Cash and bank balances | 28,154,831.88 | 55,410,386.45 | 33,515,685.27 |
| C. Noncurrent assets held for sale | 6,395,331.58 | 2,767,896.73 | 2,709,053.66 |
| Total current assets | 166,500,723.94 | 128,342,743.15 | 136,111,599.67 |
| Total assets | 1,162,228,464.55 | 1,013,278,157.88 | 1,139,516,315.03 |
| Equity and Liabilities in EUR | Mar 31, 2007 | Mar 31, 2006 | Dec 31, 2006 | |
|---|---|---|---|---|
| A. | Equity | |||
| I. | Subscribed capital | 20,000,000.00 | 10,225,837.62 | 20,000,000.00 |
| II. | Capital reserves | 170,754,317.92 | 228,340,307.30 | 170,754,317.92 |
| III. | Retained earnings | 29,733,706.21 | 29,417,398.46 | 29,702,430.21 |
| IV. | Consolidated net retained profits | 171,866,308.37 | 151,578,368.52 | 175,098,444.00 |
| V. | Minority interests | 0.00 | 379,635.79 | 0.00 |
| Total equity | 392,354,332.50 | 419,941,547.69 | 395,555,192.13 | |
| B. | Noncurrent liabilities | |||
| I. | Bank loans and overdrafts | 523,547,916.26 | 400,261,688.65 | 503,587,203.03 |
| II. | Liabilities to other lenders | 55,663,849.27 | 25,040,679.41 | 58,599,066.68 |
| III. | Interest rate swaps | 34,618.87 | 0.00 | 54,795.07 |
| IV. | Post-employment benefit obligation | 4,975,213.29 | 5,394,238.38 | 5,083,618.00 |
| V. | Other noncurrent provisions | 256,568.75 | 4,291,499.66 | 254,480.27 |
| VI. | Liabilities to fund limited partners | 50,391,280.88 | 0.00 | 49,783,237.83 |
| VII. | Other noncurrent liabilities | 219,139.70 | 3,440,713.28 | 219,139.70 |
| VIII. Deferred tax liabilities | 6,179,849.51 | 2,278,000.00 | 6,179,849.51 | |
| IX. | Deferred income | 35,074,848.51 | 36,561,671.11 | 35,446,554.16 |
| Total noncurrent liabilities | 676,343,285.04 | 477,268,490.49 | 659,207,944.25 | |
| C. | Current liabilities | |||
| I. | Bank loans and overdrafts | 16,353,324.59 | 19,096,215.62 | 9,004,049.09 |
| II. | Liabilities to other lenders | 3,875,991.25 | 2,114,969.05 | 2,499,798.29 |
| III. | Provisions for taxes; current provisions | 4,520,792.00 | 6,232,484.11 | 4,184,292.00 |
| IV. | Other current provisions | 651,371.76 | 839,115.89 | 599,197.02 |
| V. | Prepayments received | 40,969,686.25 | 39,546,238.81 | 32,763,820.82 |
| VI. | Liabilities from rental activities | 9,645,600.99 | 8,109,537.14 | 10,401,092.18 |
| VII. | Trade payables and other liabilities | 17,514,080.17 | 33,572,809.08 | 25,300,929.25 |
| VIII. Derivatives | 0.00 | 6,556,750.00 | 0.00 | |
| Total current liabilities | 93,530,847.01 | 116,068,119.70 | 84,753,178.65 | |
| Total equity and liabilities | 1,162,228,464.55 | 1,013,278,157.88 | 1,139,516,315.03 |
CONSOLIDATED INCOME STATEMENT FOR THE PERIOD FROM JANUARY 1 TO MARCH 31, 2007
| Jan 1 – Mar 31, | Jan 1 – Mar 31, | Jul 1 – Dec 31, | Jan 1 – Jun 30, | |
|---|---|---|---|---|
| in EUR | 2007 | 2006 | 2006 | 2006 |
| 1. Revenue | ||||
| a) from residential property management | 22,556,937.86 | 20,205,019.08 | 59,857,079.53 | 46,592,380.00 |
| b) from property sales | 0.00 | 100,000.00 | 2,790,888.00 | 526,000.00 |
| c) from management activities | 311,799.48 | 537,470.46 | 962,775.61 | 1,177,635.84 |
| d) from other services | 10,320.92 | 26,523.87 | 21,061.60 | 47,875.12 |
| 22,879,058.26 | 20,869,013.41 | 63,631,804.74 | 48,343,890.96 | |
| 2. Profit from housing privatization | ||||
| a) Sale proceeds | 1,241,520.00 | 7,361,613.34 | 78,473,527.84 | 18,728,995.44 |
| b) Carrying amounts of assets disposed | 1,069,848.66 | 4,051,204.05 | 44,391,366.76 | 10,987,137.93 |
| 171,671.34 | 3,310,409.29 | 34,082,161.08 | 7,741,857.51 | |
| 3. Changes in inventories | 6,323,520.12 | 5,404,654.18 | – 6,343,612.34 | 6,263,729.91 |
| 4. Other operating income | 1,153,393.93 | 942,150.31 | 2,347,102.36 | 2,435,936.57 |
| 5. Cost of purchased services | ||||
| a) Residential property management | 11,908,479.55 | 10,327,138.34 | 26,086,404.55 | 24,310,820.22 |
| b) Property sales | 0.00 | 62,233.48 | 1,665,552.85 | 286,044.70 |
| 11,908,479.55 | 10,389,371.82 | 27,751,957.40 | 24,596,864.92 | |
| Gross profit | 18,619,164.10 | 20,136,855.37 | 65,965,498.44 | 40,188,550.03 |
| 6. Employee expenses | 3,951,936.85 | 4,220,457.42 | 8,354,117.06 | 8,995,318.50 |
| 7. Depreciation, amortization and impairment losses |
3,981,687.45 | 3,523,627.37 | 14,757,639.92 | 7,096,420.35 |
| 8. Other operating expenses | 5,696,099.68 | 3,115,025.39 | 10,961,379.87 | 9,815,242.30 |
| 9. Income from business combination | 0.00 | 0.00 | 8,779,377.52 | 0.00 |
| 10. Income from financial assets | 2,295.89 | 159,979.40 | 317,674.74 | 318,436.48 |
| 11. Other interest and similar income | 450,690.21 | 226,800.66 | 570,658.30 | 783,220.52 |
| 12. Impairment losses on financial assets | 0.00 | 0.00 | 691.63 | 163,107.00 |
| 13. Interest and similar expenses | 8,327,710.26 | 6,245,329.01 | 12,574,539.42 | 12,411,126.25 |
| 14. Net finance costs | – 7,874,724.16 | – 5,858,548.95 | – 11,686,898.01 | – 11,472,576.25 |
| 15. Gains and losses on financial derivatives | 0.00 | – 86,000.00 | 344,000.00 | 167,000.00 |
| 16. Profit before tax | – 2,885,284.03 | 3,333,196.24 | 28,640,841.10 | 2,641,992.63 |
| 17. Income tax expense | 336,500.00 | 203,000.00 | – 726,988.55 | 904,726.07 |
| 18. Other taxes | 10,351.60 | 18,700.91 | 23,474.04 | 31,289.75 |
| 19. Profit after tax | – 3,232,135.63 | 3,111,495.33 | 29,344,355.61 | 1,705,976.81 |
| Profit attributable to: Shareholders of the parent |
– 3,232,135.63 | 3,122,402.90 | 29,344,355.61 | 1,705,976.81 |
| Minority interests | 0.00 | –10,907.57 | 0.00 | 0.00 |
| Earnings per share | – 0.16 | 0.78 | 1.47 | 0.09 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FISCAL YEAR FROM JANUARY 1 TO MARCH 31, 2007
| Consolidated | |||||||
|---|---|---|---|---|---|---|---|
| Subscribed | Capital | Retained | net retained | Minority | |||
| in EUR thousand | capital | reserves | earnings | profits | Subtotal | interests | Total |
| Balance at June 30, 2006 | |||||||
| in accordance with IFRS | 10,226 | 207,053 | 29,553 | 171,830 | 418,662 | 0 | 418,662 |
| Distributions | – 52,600 | – 52,600 | – 52,600 | ||||
| Profit for the year | 29,344 | 29,344 | 29,344 | ||||
| Withdrawals | – 36,298 | – 36,298 | – 36,298 | ||||
| Appropriations | 9,774 | 26,524 | 36,298 | 36,298 | |||
| Adjustment from pensions | 149 | 149 | 149 | ||||
| Balance at December 31, 2006 | |||||||
| in accordance with IFRS | 20,000 | 170,755 | 29,702 | 175,098 | 395,555 | 0 | 395,555 |
| Distributions | 0 | 0 | |||||
| Profit for the year | – 3,232 | – 3,232 | – 3,232 | ||||
| Withdrawals | 0 | 0 | |||||
| Appropriations | 0 | 0 | |||||
| Adjustment from pensions | 31 | 31 | 31 | ||||
| Balance at March 31, 2007 | |||||||
| in accordance with IFRS | 20,000 | 170,755 | 29,733 | 171,866 | 392,354 | 0 | 392,354 |
CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD FROM JANUARY 1 TO MARCH 31, 2007
| Jan 1 – Mar 31, | Jan 1 – Mar 31, | ||
|---|---|---|---|
| in EUR thousand | 2007 | 2006 | |
| 1. | Consolidated profit before interest paid and received and income taxes | ||
| (insofar as recognized in the income statement for the reporting period) | 4,980 | 8,829 | |
| 2. | Depreciation and amortization expense | 3,982 | 3,524 |
| 3. | Increase/decrease (–) in provisions | 282 | – 678 |
| 4. | Profit from privatization (disposal of investment property) | – 172 | – 3,310 |
| 5. | Interest paid (–)/received incl. previous year's deferred interest | – 7,875 | – 5,589 |
| 6. | Income taxes paid (–)/received | – 337 | – 129 |
| 7. | Increase (–)/decrease in deferred taxes | 0 | 0 |
| 8. | Increase (–)/decrease in inventories, trade receivables, derivatives and other assets that are not attributable to investing or financing activities |
– 32,065 | 2,215 |
| 9. | Increase/decrease (–) in trade payables, derivatives and other liabilities that are not attributable to investing or financing activities |
– 336 | 7,271 |
| 10. Change in other balance sheet items | 1,180 | 24 | |
| 11. Cash flows from operating activities | – 30,361 | 12,157 | |
| 12. Proceeds from disposal of investment property | 1,242 | 7,355 | |
| 13. Payments to acquire investment property | – 1,036 | – 1,392 | |
| 14. Payments to acquire intangible assets | – 7 | 0 | |
| 15. Proceeds from disposal of financial assets and capital repayments | 0 | 0 | |
| 16. Payments to acquire minority interests in consolidated companies | 0 | 0 | |
| 17. Payments to acquire financial assets | 0 | 0 | |
| 18. Payments to acquire limited partner shares in DB IF 14 | 0 | 0 | |
| 19. Cash flows from investing activities/housing sales | 199 | 5,963 | |
| 20. Payments to owners (dividend) | 0 | 0 | |
| 21. Proceeds from issuance of loans | 30,000 | 0 | |
| 22. Repayments of loans | – 5,199 | – 9,913 | |
| 23. Change in other current financial liabilities | 0 | 0 | |
| 24. Cash flows from financing activities | – 24,801 | – 9,913 | |
| 25. Change due to changes in the Group of consolidated companies | |||
| Change in balance sheet items due to initial consolidation of DB IF 14 | 0 | 0 | |
| Cost | 0 | 0 | |
| Profit from initial consolidation | 0 | 0 | |
| 26. Net change in cash and cash equivalents | – 5,361 | 8,207 | |
| 27. Cash provided by initial consolidation | 0 | 0 | |
| 28. Cash and cash equivalents at beginning of period | 33,516 | 47,203 | |
| 29. Cash and cash equivalents at end of period | 28,155 | 55,410 |
The Group has funds amounting to EUR 270.0 million from financing commitments, EUR 30.0 million of which had been drawn down on the reporting date.
Cash and cash equivalents comprise cash (EUR 11 thousand; March 31, 2006: EUR 11 thousand) and bank balances (EUR 28,143 thousand; March 31, 2006: EUR 55,400 thousand).
In fiscal year 2007, cash funds of EUR 10,332 thousand (March 31, 2006: EUR 10,518 thousand) were pledged to a bank as cash collateral.
CONSOLIDATED SEGMENT REPORTING
| in EUR m | Mar 31, 2007 | Mar 31, 2006 |
|---|---|---|
| Revenue from estimated rent | 23.7 | 21.2 |
| Revenue from actual rent | 21.7 | 19.5 |
| Revenue from operating cost allocations | 7.0 | 5.9 |
| = Revenue from property management | 28.7 | 25.3 |
| Expenses from operating costs | 7.8 | 6.6 |
| Maintenance expenses | 3.4 | 3.2 |
| Other expenses from property management | 0.4 | 0.3 |
| Depreciation, amortization and impairment losses on noncurrent assets | 4.0 | 3.5 |
| = Expenses from property management | 15.5 | 13.6 |
| Adjustments for vacancies due to sales | 1.3 | 1.3 |
| Segment result – Residential Property Management | 14.4 | 12.9 |
| Sales revenue | 0.1 | 7.4 |
| Disposal of consolidated carrying amounts | 0.0 | 4.0 |
| = Consolidated book gains | 0.1 | 3.3 |
| Selling and pre-sale expenses | 0.7 | 0.7 |
| = Sales segment result for | ||
| core Rhine-Main / Rhineland-Palatinate portfolio | – 1.8 | 1.4 |
| Result from privatization of other development properties | 0.1 | 0.0 |
| Net selling proceeds from North Hesse portfolio | 0.0 | 0.0 |
| Segment result – Housing Privatization | – 1.8 | 1.4 |
| Income from management activities | 0.3 | 0.5 |
| Other income | 1.1 | 1.0 |
| Write-downs of receivables | 2.6 | 0.4 |
| Employee expenses | 4.0 | 4.2 |
| Administrative expenses | 2.5 | 2.0 |
| EBDIT | 9.0 | 12.8 |
| EBIT | 5.0 | 9.3 |
| Interest income | 0.5 | 0.4 |
| Interest expenses | 8.3 | 6.3 |
| = Net finance costs | – 7.9 | – 5.9 |
| Profit before tax | – 2.9 | 3.3 |
| Income tax expense | 0.3 | 0.2 |
| Consolidated profit for the period | – 3.2 | 3.1 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The fi nancial statements of the Deutsche Wohnen Group as of March 31, 2007, were prepared in accordance with International Financial Reporting Standards (IFRS). The consolidated fi nancial statements were not reviewed by an auditor. The fi nancial statements give a true and fair view of the Group's results of operations for the period from January 1 to March 31, 2007. The interim fi nancial statements of the companies included are based on uniform accounting policies. The consolidation methods and accounting policies are unchanged as against the 2006 consolidated fi nancial statements and are presented in Deutsche Wohnen's 2006 Annual Report. The 2006 Annual Report can be downloaded from the Company's website (http://www.deutsche-wohnen.de). Please contact the Company for a printed copy.
The Group's profi t before tax and profi t after tax as of March 31, 2007, were signifi cantly infl uenced by two effects of sales transactions.
Due to the signifi cantly smaller pipeline from 2006, only four sales were recognized on the balance sheet as of March 31, 2007. The 156 housing sales in the fi rst quarter of 2007 will be reported in the consolidated fi nancial statements over the rest of 2007. In view of the fact that the number of sales is traditionally much higher in the second half of the year, it can be assumed that a further 1,000 to 1,200 housing sales will be recognized on the balance sheet before the end of 2007.
In 2005 Deutsche Wohnen sold undeveloped land with building space of approximately 20,000 m2 for which a definitive planning right has yet to be obtained. As the buyer has now indicated its intention to withdraw from the transaction, it is not sufficiently likely that the purchase agreement will actually become effective when the planning right is granted as anticipated. An impairment loss in the amount of EUR 2.2 million was therefore recognized. This matter is not expected to further impact consolidated profit in the future. The undeveloped space can in principle be resold, however.
As part of the full consolidation of DB Immobilienfonds 14 effective December 31, 2006, the 2,625 residential units and 27 commercial units in the fund initially increased the estimated rental income by approximately EUR 3.2 million. Allocable management expenses and higher interest expense due to consolidation means that the fund has almost broken even.
As of March 31, 2007, the loss before tax amounted to EUR –2.9 million (March 31, 2006: profit before tax of EUR 3.3 million). The loss after tax for the quarter was EUR – 3.2 million (Q1 2006: profit after tax of EUR 3.1 million).
The forecast for the consolidated profit before tax in 2007 is EUR 15.0 million (not including acquisitions). All things being equal, the Management Board is unable to rule out that the impairment loss of EUR 2.2 million will not affect this projection.
ADDITIONAL INFORMATION
MANAGEMENT BOARD
(as of May 2007)
Andreas Lehner (Chairman) Dr. Michael Gellen
SUPERVISORY BOARD
(as of May 2007)
Helmut Ullrich (Chairman) Dr. Andreas Kretschmer (Deputy Chairman) Jens Bernhardt Matthias Hünlein Hans-Werner Jacob Dr. Florian Stetter
CALENDAR
May 30, 2007 Kempen Conference in Amsterdam
May 31, 2007 HVB Conference in Stockholm
June 20, 2007 Deutsche Bank German Corporate Conference in Frankfurt
June 21, 2007 Annual General Meeting 2007 in Frankfurt
June 22, 2007 Dividend payment for the short fiscal year July 1 to December 31, 2006
August 28, 2007 Publication of the Half-Year Report 2007 September 12/13, 2007 UBS Conference in New York
September 25/27, 2007 HVB Conference in Munich
October 8/10, 2007 EXPO REAL in Munich
October 25/26, 2007 7th "Real Estate Share Initiative" Conference in Frankfurt
November 14/15, 2007 WestLB Conference in Frankfurt
November 27, 2007 Publication of the Interim Report as of September 30, 2007
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ACKNOWLEDGEMENTS
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| Picture credits
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