Earnings Release • Nov 6, 2012
Earnings Release
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Maia - Portugal, November 6th 2012
Sonae Sierra, the international shopping centre specialist, recorded in the first nine months of 2012 a Net Result of €16.8 million, which represents a 38% decrease compared to the same period of 2011.
The variation of the Net Profit was due to unfavourable Indirect Results, -€29.3 million in the first nine months of 2012 compared to -€16.9 million in the same period of 2011, mainly as a consequence of yields expansion in Europe which were only partially compensated by yields compression in Brazil.
However, Direct Profits increased 4%to €46.1 million compared to €44.2 million in the same period of 2011, leveraged by the increased portfolio in operation in Europe and Brazil, operational efficiency gains and the improvement of financial results.
Among this quarter's main events were the signing of three new letting and management contracts in Algeria and the strengthening of our business in Morocco, where we signed our third development service contract for another shopping centre in Casablanca.
In Algeria, Sierra Cevital, a partnership between Sonae Sierra and Cevital, will provide letting and management services to Uno Shopping Centre Mostaganem, Uno Shopping Centre Ain Defla and Uno Shopping Centre Bouira. Together, these centres total 40,390 m2 of Gross Lettable Area (GLA), 92 shops, including 22 restaurants and 2,700 parking spaces. Sierra Cevital will provide its expertise to these new centres which are scheduled to open in late 2012 and early 2013.
As a result of the refurbishment and expansion of the current Marjane Californie gallery and hypermarket, in Casablanca Sonae Sierra has signed a new development management service contract. Scheduled to open in 2015, this newly refurbished expanded Centre will have a total Gross Lettable Area (GLA) of 37,510 m², 168 shops and 2,078 parking spaces.
The Company's EBITDA grew 2% (€86.4 million, compared to €84.6 million in the same period of 2011), reflecting the efficiency gains from the cost reduction efforts in all areas of the Company, the strengthening of our activity in Europe and Brazil and the growth in service provisions to third parties.
In the global portfolio managed by Sonae Sierra, tenant sales decreased 0.3% compared to the same period of 2011, mainly due to the decrease of economic activity in Greece, Portugal and Spain. We highlight the excellent operational performance of Brazil, with sales growing 15.4% in Reais, compensating the European portfolio performance.
The Global Occupancy Rate of the portfolio was 96%, a slight decrease of 0.8% compared to the same period of 2011, which demonstrates the Company's highly resilient portfolio in face of the natural impact of the current economic situation on occupancy and letting rates in the European retail real estate sector.
The Company's total assets under management reached €6.4 billion, a €115 million increase compared to the end of 2011, mainly due to the opening of Le Terrazze (Italy) and Uberlândia Shopping (Brazil).
Sonae Sierra calculates its NAV according to the guidelines published in 2007 by the INREV (European Association for Investors in Non-Listed Real Estate Vehicles), an association of which the Company is a member.
On the basis of this methodology, the Company's NAV, as of September 30 2012, was €1.128 billion a decrease of 3.9% compared to the value recorded in December 2011, mainly due to distribution of dividends to shareholders and adverse FX variations.
| Net Asset Value (NAV) amounts in € 000 |
30 Sep 12 | 31 Dec 11 |
|---|---|---|
| NAV as per the financial statements | 904.382 | 941.090 |
| Revaluation to fair value of developments | 9.821 | 10.430 |
| Deferred tax for properties | 231.275 | 238.686 |
| Goodwill related to deferred tax | -35.808 | -36.073 |
| Gross-up of Assets | 17.953 | 18.765 |
| NAV | 1.127.623 | 1.172.899 |
| NAV per share (in €) | 34,68 | 36,07 |
Currently, Sonae Sierra owns 48 Shopping Centres in operation, 27 of which are located outside Portugal, namely in Spain (9), Italy (5), Greece (1), Germany (3), Romania (1) and Brazil (8). The Company has three Shopping Centres under construction which represent a total investment of about €375 million, and will add 155,000 m2 of Gross Lettable Area (GLA) to the company's portfolio after their inauguration.
In Germany and in a 50% partnership with MAB Development, Solingen Shopping is under construction, a €120 million investment which will have a gross lettable area (GLA) of 29.000 m² and is scheduled to open in late 2013.
There are two Centres under construction in Brazil, Boulevard Londrina and Passeio das Águas Shopping. The former, located in Londrina, state of Paraná, will have 47,800 m² of GLA, corresponding to a total investment of € 88 million. The latter, in the city of Goiânia, state of Goiás, will be the Company's 13th development in the country. With a GLA of 78,100 m², this new Centre represents a total investment of about €167 million. Both centres are scheduled to be inaugurated in 2013.
Sonae Sierra is also developing four shopping centres for Clients: Point Shopping Center in Zagreb (Croatia), Marina Casablanca, Ibn Tachfine and Californie all in Casablanca (Morocco).
In total, Sonae Sierra is responsible for the management of more than 70 shopping centres comprising a total Gross Lettable Area (GLA) of about 2.2 million m2 with more than 8,500 tenants.
Sonae Sierra, www.sonaesierra.com, is the international Shopping Centre specialist, with a passion for creating innovative shopping experiences. The Company owns 48 shopping centres and is present in 11 countries: Portugal, Spain, Italy, Germany, Greece, Romania, Croatia, Morocco, Algeria, Colombia and Brazil. Sonae Sierra manages more than 70 Shopping Centres with a market value of more than 6.4 billion euros, and a total Gross Lettable Area (GLA) of about 2.2 million m2 with about 8,500 tenants. In 2011, the Company welcomed more than 428 million visits in the shopping centres it manages. Currently, Sonae Sierra has 7 projects under development, including 4 for clients, and 7 new projects in pipeline.
| (unaudited accounts) | |||
|---|---|---|---|
| Consolidated Profit and Loss Account (€ 000) |
9M12 | 9M11 | % 12/11 |
| Direct income | 155.544 | 154.059 | 1% |
| Direct costs | 69.108 | 69.572 | -1% |
| EBITDA | 86.435 | 84.487 | 2% |
| Net financial costs | 27.795 | 28.143 | -1% |
| Other non-recurrent income/cost | -1.693 | -2.496 | 32% |
| Direct result before taxes | 56.947 | 53.848 | 6% |
| Corporate tax | 10.845 | 9.640 | 12% |
| Direct result | 46.102 | 44.208 | 4% |
| Gains realized on sale of investments | 3.286 | -4.304 | 176% |
| Impairment & development funds at risk provision | -1.489 | -3.269 | 54% |
| Value created on investments | -26.359 | 329 | -8120% |
| Indirect income | -24.562 | -7.245 | -239% |
| Deferred tax | 4.691 | 9.676 | -52% |
| Indirect result | -29.253 | -16.921 | -73% |
| Net result | 16.849 | 27.286 | -38% |
| Consolidated Balance Sheet | 30-09-2012 | 31-12-2011 | Var. 12 - 11 |
|---|---|---|---|
| (€ 000) | |||
| Investment properties | 2.113.650 | 2.058.594 | 55.056 |
| Properties under development and others | 207.194 | 255.841 | -48.647 |
| Other assets | 128.398 | 135.300 | -6.902 |
| Cash & equivalents | 120.076 | 113.798 | 6.277 |
| Total assets | 2.569.317 | 2.563.533 | 5.784 |
| Net worth | 904.382 | 941.090 | -36.7080 |
| Bank loans | 1.133.634 | 1.107.428 | 26.206 |
| Deferred taxes | 282.196 | 286.956 | -4.760 |
| Other liabilities | 249.104 | 228.058 | 21.045 |
| Total liabilities | 1.664.934 | 1.622.443 | 42.492 |
| Net worth and liabilities | 2.569.317 | 2.563.533 | 5.784 |
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