IVG reports positive operational performance in 1Q 2009 and considerably reduced charges from market value changes

IVG reports positive pre-tax earnings of € 14.4 million (1Q 2008: € 25.4 million); net rents increase to € 82.6 million (1Q 2008: € 79.2 million)

Negative non-cash market value changes in investment portfolio fell to -€ 33.7 million (4Q 2008: -€ 352.1 million)

Quarterly loss after tax of -€ 44.8 million (1Q 2008: € 12.1 million profit)
Adjusted NAV slightly lower at € 12.11 per share (31 December 2008: € 12.70)

Operationally, IVG has been off to a good start in 2009 despite difficult market conditions. Net rents increased to a volume of € 82.6 million (1Q 2008: € 79.2 million); current revenues from the funds business increased to € 16.6 million (1Q 2008: € 14.6 million), and revenues from the caverns business increased to € 3.8 million (1Q 2008: € 1.2 million). At the same time, the decline in other revenue components (e.g. revenues from project sales) led to a drop in total revenues to € 123.2 million (1Q 2008: € 171.5 million).
IVG’s performance continues to be affected by the consequences of the international financial market crisis. Negative non-cash market value changes amounted to -€ 69.5 million (4Q 2008:
- € 727.1 million), of which market value changes of properties in the Investment Division only accounted for -€ 33.7 million (4Q 2008: -€ 352.1 million), equivalent to 0.6 percent. In selected European markets, IVG has observed the first signs suggesting that the increase in initial yields has reached a preliminary peak.

EBIT decreased to € 16.9 million (1Q 2008: € 102.1 million). With -€ 72.0 million (1Q 2008:
-€ 82.6 million), IVG’s financial result showed an improvement, which was mainly supported by the favourable development of interest rates and lower debt amount. Overall, IVG posted a Consolidated Net Loss of -€ 44.8 million (1Q 2008: Consolidated Net Profit of € 12.1 million). When adjusted for negative unrealised market value changes, IVG reported positive pre-tax earnings of € 14.4 million (1Q 2008: € 25.4 million). IVG’s adjusted Net Asset Value (NAV adj.) decreased slightly to € 12.11 per IVG share (31 December 2008: € 12.70).

For the investment portfolio, the gross rental yield amounted stable to 6.8 percent, the NRI yield (Net Rental Income) was 5.5 percent, and the NOI yield (Net Operating Income) was 5.2 percent. At the end of the first quarter, the occupancy rate of the portfolio was 91.7 percent (1Q 2008: 92.5 percent), with the slight decline being mainly due to the sale of properties. Like for like, net rents were 2.2 percent higher than in the same quarter in the previous year, and they were almost at the same level as in the previous quarter. At the same time, new tenancy agreements were concluded for a total space of 35,500 square metres (rental period beginning in 2009) and 24,500 square metres (rental period beginning in 2010).
In the first quarter of 2009, IVG’s Investment Division closed three sales with a volume of approx. € 140 million. Negotiations on the sale of additional single properties have reached the home stretch. IVG´s Funds Division has completed the structuring of the “IVG Protect Fund” for institutional investors. In this fund, IVG has combined properties worth approx. € 300 million from its investment portfolio. In addition, IVG’s Funds Division will soon launch two new closed-end funds for private investors. While EuroSelect 17 will invest in KPMG’s new headquarters in Amsterdam (Netherlands), EuroSelect 18 will provide a portfolio of five attractive properties from IVG’s own portfolio in three German cities. Additional fund products are currently being prepared for the second half of 2009.

Gerhard Niesslein, Spokesman of IVG’s Board of Management, made the following comments with regard to this development: “We took an important step in March when, based on term sheets, we extended our financing. Our task now is to properly implement the ambitious programme for 2009.”

source : IVG