Homburg Invest reports 2009 Canadian GAAP Financial Results
Shares issued: Class A - 17,094,490 Class B - 3,148,538
HALIFAX, Nova Scotia. March 31, 2010 - (TSX: HII.A & HII.B and NYSE Euronext
Amsterdam: HII) - Richard Homburg, Chairman and Chief Executive Officer of
Homburg Invest Inc. ("Homburg Invest" or the "Company"), is pleased to announce
that Homburg Invest has released its financial results for the year ended
December 31, 2009 prepared under Canadian Generally Accepted Accounting
Principles ("GAAP").
"Despite extremely difficult market conditions in 2009, funds from operations
("FFO") were strong at $46.9 million in 2009, a 18.7% increase over the $39.5
million in 2008, property revenues continued to grow and net operating income
("NOI") was only down marginally," said Richard Homburg, Chairman and Chief
Executive Officer of Homburg Invest. "While market conditions in 2009 were such
that we had to write down the value of our properties in some markets, the
fourth quarter of 2009 was our strongest FFO quarter of the year and improving
economic conditions in most markets are stabilizing our yields and rents as we
move into 2010."
Financial Results (Year ended December 31, 2009)
Property revenues rose 2.8% to $307.7 million during the twelve months ended
December 31, 2009 compared to $299.3 million in 2008. Property revenue in the
European portfolio increased 4.3% to $150.6 million during 2009 compared to
$144.4 million in 2008. The increase is due mainly to positive movement on the
Euro/CAD exchange rate. Canadian property revenue increased slightly to $138.7
million in 2009 compared to $136.9 million during 2008, reflecting the stable
base of investment properties, tenants, leasing and occupancy rates over the
course of the fiscal year.
Operationally, the occupancy levels remained strong with an overall weighted
average occupancy rate of 93% as at December 31, 2009, compared to 97.1% as at
December 31, 2008. Weighted average remaining lease term is 7.65 years as at
December 31, 2009.
Revenue from the sale of properties developed for resale decreased to $63.9
million for the twelve months ended December 31, 2009 compared to $191.3 million
in 2008. The drop in revenue reflects the lower levels of development activity,
the softening of real estate prices in the condominium market as a result of
slower economic activity and the completion of the construction of the Penn West
Plaza project in Calgary, Alberta.
NOI decreased marginally to $207.4 million for the twelve months ended December
31, 2009, compared to $217.2 million for the same period in 2008. Despite the
economic slowdown that started in 2008, NOI remained relatively stable during
2009.
Net loss from continuing operations increased to $247.3 million for the twelve
months ended December 31, 2009, compared to a net loss of $98.7 million in
2008. The increased loss is primarily due to a $182 million impairment loss on
investment properties, compared to no impairment loss in 2008; and to a $49.1
million impairment loss on development properties compared to no impairment loss
in 2008. The loss was offset in part by income tax recovery of $45.2 million.
The impairment loss on investment properties is primarily on the Nurnburg
property in Germany, where the major tenantKarstadt Quelle vacated the property
on December 31, 2009. Pursuant to GAAP, the Company was required to write the
Nurnburg property down to fair value despite the non-recourse financing of the
property and the fact that the Company can produce a substantial gain by
returning the property to the lender, a strength of the Company's limited
partnership structure.
FFO for the twelve-month period ended December 31, 2009 were $46.9 million
compared to $39.5 million for the same period in 2008, representing a 18.7%
increase compared to 2008.
Total assets as at December 31, 2009 were $3.4 billion, compared to restated
total assets of $4.0 billion as at December 31, 2008. The decrease was due
primarily to a $492.9 million reduction in investment properties, due to a
strengthening of the Canadian dollar against the Euro and to normal depreciation
in assets.
The weighted average fixed interest rate on long term debt increased slightly to
6.00% as at December 31, 2009 from 5.94% as at December 31, 2008.
Net asset value per share was $15.51 as at December 31, 2009.
Key Financial Results for the Year Ended December 31, 2009
2009 2008
(millions of CDN $, except per share
items)
+-------------------------------------+-------+--------------------------------+
| | | |
|Property revenue | 307.7 | 299.3 |
| | | |
|Sale of properties developed for | 63.9 | 191.3 |
|resale | | |
| | 401.3 | 495.9 |
|Total revenues and other gains | | |
+-------------------------------------+-------+--------------------------------+
| | | |
|Net operating income | 207.4 | 217.2 |
| | | |
|Net loss from continuing operations |(247.3)| (97.8) |
| | | |
|Net loss |(247.7)| (96.1) |
| | | |
|Funds from operations | 46.9 | 39.5 |
+-------------------------------------+-------+--------------------------------+
| | | |
|Basic earnings per share |(12.54)| (4.85) |
| | | |
|Diluted earnings per share |(12.54)| (4.85) |
| | | |
| | | |
|Funds from operations per share | 2.37 | 1.99 |
+-------------------------------------+-------+--------------------------------+
For complete financial statements, along with the Management's Discussion and
Analysis of Results as at and for the year ended December 31, 2009, please refer
to the Company's website atwww.homburginvest.com
or www.sedar.com .
Financial Results: Fourth quarter ending December 31, 2009
In the fourth quarter of 2009, property revenue was $77.3 million compared to
$80.2 million in the fourth quarter of 2008. Total revenue was $99 million in
the fourth quarter of 2009 compared to $93.2 million in the same quarter of
2008.
FFO in the fourth quarter of 2009 was strong at $16.5 million, up from $10.0 in
the same period in 2008.
Long term debt decreased by $275 million in the last quarter of 2009 to $2.64
billion. The reduction was due to foreign exchange rate changes, which
decreased from CAD$1.72 : 1 EUR at December 31, 2008 to CAD$1.50 : 1 EUR at
December 31, 2009, and to normal principal payments.
The Company expects to release its financial statements prepared in accordance
with the International Financial Reporting Standards (IFRS) prior to April
14, 2010.
About Homburg Invest
Homburg Invest Inc. owns and develops a diversified portfolio of quality real
estate including office, retail, industrial and residential apartment and
townhouse properties throughout Canada, the United States and Europe. The head
office of the Company is located in Halifax, Nova Scotia.
Forward-looking Statements
This news release may contain statements which by their nature are
forward-looking and express the Company's beliefs, expectations or intentions
regarding future performance, future events or trends. Forward looking
statements are made by the Company in good faith, given management's
expectations or intentions, which are subject to market conditions,
acquisitions, occupancy rates, capital requirements, sources of funds, expense
levels, operating performance and other matters. Therefore, forward-looking
statements contain assumptions which are subject to various factors including:
unknown risks and uncertainties; general economic conditions; local market
factors; performance of other third parties; environmental concerns; and
interest rates, any of which may cause actual results to differ from the
Company's good faith beliefs, expectations or intentions which have been
expressed in or may be implied from this news release. Forward-looking
statements are not guarantees of future performance and are subject to known and
unknown risks. Information and statements in this document, other than
historical information, should be considered forward-looking and reflect
management's current views of future events and financial performance that
involve a number of risks and uncertainties. Factors that could cause actual
results to differ materially include, but are not limited to, the following:
general economic conditions and developments within the real estate industry,
competition and the management of growth. The Toronto Stock Exchange has neither
approved nor disapproved the information contained herein.
-30-
Note
Non-GAAP Financial Measures
This news release includes measures widely accepted within the real estate
industry which are not defined under GAAP. These measures include funds from
operations, funds from operations per share, property net operating income, and
net asset value per share. As these are not defined measures under GAAP, other
issuers' may have different calculations from those used by the Company.
The Company considers these amounts to be measures of operating and financial
performance.
a. Funds from operations ("FFO") and FFO per share are presented by the Company
as net income (loss) from continuing operations adjusted for amortization,
non-recurring stock based compensation, deferred and capital income taxes,
gain on sale of investment properties, net adjustments to fair value of
investment properties, held for trading financial assets and derivative
financial instruments and net exchange differences; divided by the weighted
average number of shares outstanding.
b. Property net operating income ("NOI") is presented by the Company as
property revenue less property operating expenses.
c. Net asset value per share is presented by the Company as equity attributable
to shareholders divided by the number of shares outstanding at year end.
For further information, please contact:
Mr. Richard Homburg
Chairman and CEO
Homburg Invest Inc.
(902) 468-3395
or
J. Richard Stolle
President and COO
Homburg Invest Inc.
31-20-573-3855
[HUG#1400098]
PDF version of the press release: http://hugin.info/138798/R/1400098/355495.pdf
