Homburg Invest Inc. announces third quarter 2009 results
Property revenue and net operating income continue to grow strongly
Shares issued: Class A - 16,618,819 Class B - 3,148,538
IFRS Highlights:
(Nine months ended September 30, 2009)
- Property revenue increased 6.2% to $242.7 million compared to
$228.6 million for the same period in 2008..
- Funds from operations (note) ("FFO"), a non-IFRS measure widely used to
evaluate real estate performance, net of the development pipeline, was
$34.4 million for the nine month period, compared to $36.1 million for
the same period last year.
- The Company recorded a $62.7 million non-cash mark-to-market write-down
of its investment properties for the nine months ended September 30,
2009, as required under IFRS. Under IFRS, the investment properties
must be carried at fair value. In the current economic environment,
property values are decreasing despite stable cash flows as the result
of increasing capitalization rates. GAAP, the standard which all
Canadian public real estate entities report under, currently does not
adjust to fair value, but rather does an impairment test based on non-
discounted cash flows. The Company had no impairment of investment
properties under GAAP.
- Shareholders' equity decreased from $606.8 million at December 31, 2008
to $589.3 million at September 30, 2009.
- Net asset value per share (note) at September 30, 2009, is $28.40.
GAAP Highlights:
(Nine months ended September 30, 2009)
- Property revenue increased 5.0% to $238.4 million compared to
$227.0 million for the nine month period ended September 30, 2008.
- Total revenues for the nine month period ended September 30, 2009 were
$310.2 million compared to $415.9 million in the same period last year.
The decrease in total revenues is due to $127.8 million less revenue
from sales of properties developed for resale in the Canadian market.
- Funds from operations a non-GAAP measure widely used by investors to
evaluate real estate performance, net of the development pipeline were
$36.2 million compared to $36.1 million in the same period last year.
The basic underlying operations of the Company therefore generated
stable FFO.
- Shareholders' equity increased from $513.7 million at December 31,
2008, to $521.3 million at September 30, 2009.
"Property revenues are up in all geographical markets. Net operating income from our investment properties is also up in most geographical markets" said
Table 1 - Property Revenues and Net Operating Income by Geographical
Segment
(IFRS: thousands of CDN$, nine months ended September 30)
2009 2008 % Change
---- ---- --------
Germany
Property Revenues 69.0 61.0
Net Operating income 65.4 60.0
The Netherlands
Property Revenues 33.0 33.4
Net Operating income 28.6 29.9
The Baltics
Property Revenues 16.8 14.3
Net Operating income 11.7 10.5
Canada
Property Revenues 110.0 107.7
Net Operating income 55.1 58.7
United States
Property Revenues 14.0 12.2
Net Operating income 9.8 8.8
Total*
Property Revenues 242.7 228.6 6.2%
Net Operating income 170.6 168.0 1.5%
"We are in the process of reducing our debt and strengthening Homburg Invest's balance sheet through the sale of selected assets,"
Additional financial information is included at the bottom of this news release.
About Homburg Invest
Homburg Invest, with its head office in
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 however, they 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. Therefore, 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
ADDITIONAL FINANCIAL INFORMATION
The complete nine-month period financial results and MD&A can be viewed and downloaded from the corporation's web site at www.homburg.com. Additional highlights for the third quarter can be found below.
The Company prepares its quarterly and annual statements under both GAAP and IFRS. This reflects the Board's view that the IFRS presentation most accurately reflects the financial position of a real estate investment company, while at the same time the Company continues to comply with requirements to produce its results under GAAP. This also reflects the Company's desire to provide its shareholders with as much information as possible in today's environment of continuing concerns with respect to financial disclosure in the marketplace.
The most significant differences between the IFRS and GAAP statements are that while the IFRS statements reflect the investment properties at fair value and are without depreciation charges, the GAAP statements record the fixed assets at historical cost less accumulated depreciation. In addition, deferred charges relating to leasing fees have been recorded as an asset in the GAAP financial statements and will be charged to expense over the period of the related lease. These charges are written off in the period incurred under IFRS.
FINANCIAL HIGHLIGHTS - IFRS
THIRD QUARTER ENDED SEPTEMBER 30, 2009
(000's)
Nine Months Nine Months
Ended Ended
September 30 September 30
2009 2008 Increase
Property revenue $242,685 $228,572 6.2%
Property net operating income $170,624 $167,969 1.6%
Net adjustment for fair value
of investment properties ($62,719) ($29,414)
Net earnings (loss) ($39,260) $25,412
Funds from operations
net of development pipeline $34,423 $36,072
Funds from operations per
share -
basic and diluted (note) $1.73/$1.73 $1.83/$1.78
Three Months Three Months
Ended Ended
September 30 September 30
2009 2008 Increase
Property revenue $77,328 $76,469 1.1%
Net operating income $54,666 $55,757 (2.0%)
Unrealized valuation changes ($10,733) ($25,403)
Net earnings (loss) ($16,604) ($9,151)
Funds from operations, net
of development pipeline $11,317 $10,081
Funds from operations per share
- net of development pipeline
basic and diluted $0.57/$0.57 $0.50/$0.50
FINANCIAL HIGHLIGHTS - GAAP
THIRD QUARTER ENDED SEPTEMBER 30, 2009
(000's)
Nine Months Nine Months
Ended Ended
September 30 September 30
2009 2008 Increase
Property revenue $238,395 $226,981 5.0%
Net operating income $167,734 $166,378 0.8%
Net earnings (loss) ($25,693) $22,850
Funds from operations, net of
development pipeline $36,177 $36,074
Funds from operations per share
- net of development pipeline
basic and diluted $1.82/$1.82 $1.83/$1.78
Three Months Three Months
Ended Ended
September 30 September 30
2009 2008 Increase
Property revenue $76,131 $75,740 0.5%
Net operating income $53,688 $55,028 (2.4%)
Net earnings (loss) ($20,922) $4,307
Funds from operations, net of
development pipeline $11,893 $10,079
Funds from operations per share
- net of development pipeline
basic and diluted $0.60/$0.60 $0.50/$0.49
Note
Non GAAP and Non IFRS Financial Measures
This news release includes measures widely accepted within the real estate industry which are not defined under GAAP or IFRS. 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 or IFRS, 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
depreciation and amortization, non-recurring stock based compensation,
deferred and capital income taxes, unrealized and realized valuation
changes, gain (loss) on financial instruments and derivatives, and
unrealized foreign exchange gains(losses); divided by the weighted
average number of shares outstanding
b) Property Net operating income ("N0I") is presented by the Company as
Property Revenue less Property Operating Expenses
c) Net Asset Value per share is presented by the Company as
Shareholders' Equity less the priority claim for the equity component
of Homburg Capital Securities A divided by the number of shares
outstanding at period end.
%SEDAR: 00013330E
For further information: Mr. Richard Homburg, Chairman and CEO, Homburg Invest Inc., (902) 468-3395; J. Richard Stolle, President and COO, Homburg Invest Inc., 31-20-573-3855
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