ECO Business-Immobilien AG

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ECO Business-Immobilien AG: significant portfolio expansion and strong earnings performance in 2007

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ECO Business-Immobilien AG: significant portfolio expansion and strong earnings performance in 2007

Vienna, 28 March 2008 - Vienna Prime Market-listed ECO Business-Immobilien AG successfully pursued its policy of selective expansion in 2007. Thanks to a series of acquisitions during the year, total real estate assets rose to EUR 1.2 billion. Organic growth combined with active portfolio management resulted in higher revenues and an increase in property values. Intensified trading activities were also reflected in a sharp rise in profits on disposals. Operating profit (EBIT) compared with 2006 was up by 59%, to EUR 60.8 million.

All revenue and earnings measures at ECO increased sharply in 2007. Revenues rose 25% year-on-year to EUR 48.6 million, as a result of organic growth, new rentals from the existing portfolio and selective acquisitions. Trading activities were also stepped up, generating profits on disposals of EUR 16.5 million, a rise of 68% on the previous year. In 2007 ECO sold over 30 properties, with a total value of EUR 69 million. With a margin (sales price to book value) of around 28% and a ratio of profits on disposal to book values of 24%, sales proceeds were also well above the experts´ recent estimates of IFRS carrying values. Trading activities now represent a significant contribution to total earnings, and increase the extent to which the Company is self-financing, which will allow the Company to take advantage of further attractive acquisition opportunities.

The adjustment of real estate asset values to reflect fair values, which is required under IFRS accounting, made a significant contribution to the positive earnings performance of EUR 17.2 million, compared with EUR 6.1 million last year. This appreciation, representing around 1.5% of the value of investment properties held as financial investments, was mainly the result of value-adding asset management measures and increases in market prices for attractive locations.

Earnings in 2007 also grew satisfactorily. Solid operational performance resulted in a 59% rise in operating profit (EBIT) to EUR 60.8 million. Profit before tax (EBT) jumped 68% to EUR 41.7 million, while consolidated net earnings reached a new record level of EUR 32.8 million, up 83% on the previous year. Funds from operations (FFO), which is a better measure of a company´s operational earnings potential because it leaves appreciation of assets out of account, were also at a record high, totalling EUR 24.8 million. Earnings per share were up by some 12% to EUR 1.11.

Net asset value (NAV) per share rose by 5% during 2007, from EUR 11.79 to EUR 12.40. NAV per share has increased by an annual average of 6.4% since 2004.

As a result of selective acquisitions and active management of portfolio properties, the overall value of the ECO portfolio rose from EUR 697.2 million to EUR 1.2 billion in 2007. This impressive EUR 535.9 million increase is primarily attributable to the acquisition of a 60% majority stake in BAWAG-Immobilien at the end of December 2007. As of the end of 2007, the ECO portfolio consisted of 119 properties and eight development projects, compared with 126 properties and two development projects at the end of the previous year. The value of the portfolio increased by 77% year on year, while total usable space amounted to around 668,000 m2 at 31 December 2007.

For 2008, ECO foresees positive trends in its core Austrian and German property markets, and in the CEE region. In order to further increase earnings in this market environment, ECO will be focusing on active real estate management, profitable property trading activities, and increasingly on development projects. Selective acquisitions will also be used to expand the portfolio further, while active property management and innovative sales and letting policies will add to the attractiveness of the existing portfolio. One major focus will be on the former BAWAG properties acquired at the end of 2007.

Development projects in collaboration with well established partners in the core Austrian and German markets and in the CEE will also be a high priority, allowing ECO to benefit from increased added value and earnings opportunities. The development projects which began in Austria, Germany, Hungary, Luxembourg and Ukraine in 2007 will be continued in 2008, while possible new projects are currently under review.

These factors will be reflected in the company´s revenue and earnings figures. ECO is expecting rental income to continue to grow, with profits on sales rising as a result of intensified disposal activities. These revenues will make a key contribution to earnings in future. Increasing rents and profitable disposals should lead to a jump in ECO´s cash earnings in 2008.

In its financing, ECO´s policy in 2008 will be to continue to employ a balanced mix of own funds and debt capital. The Company´s solid equity capital base, its positive cash flows, and its ongoing real estate trading activities, which make it to a large extent self-financing, will be a major contribution to implementing its future plans.

Key financial indicators in EUR ´000 (in accordance with IFRS)

01-12/2007         01-12/2006
Revenues                                            48,589             38,803
 of which rental income                             39,959             32,129
Profits on disposal of non-current assets           16,508              9,819
Changes in fair value of investment property        17,146              6,068
Earnings before interest and tax (EBIT)             60,801             38,280
Earnings before tax (EBT)                           41,654             24,739
Consolidated net profit (after minority interests)  32,772             17,900

Earnings per share (EUR)                              1.11               0.99
Average number of shares                        29,550,000         17,997,115

Cash flow from operating activities                  1,673              1,532
Funds from operations (FFO)*                        24,723             16,957
NAV per share (EUR)                                  12.40              11.79
* Earnings before tax + depreciation +/- changes in fair value - tax payable

Property Data

                                                 31/12/2007        31/12/2006
Number of properties                                    127               128
 of which hold portfolio                                 73                55
 of which trading portfolio                              46                71
 of which development projects                            8                 2
Total usable space in m2*                           668,000           471,900
 of which trading portfolio                          42,800            57,400
 of which development portfolio                      53,100             8,500
Garage spaces (number)                                3,380             2,340
  of which trading portfolio                            280               290
  of which development portfolio                        230                 0
Total real estate assets (EUR ´000)               1,233,083           697,223
  of which properties under construction             34,746             3,892
  of which trading portfolio                         58,319            94,445
* Garage spaces calculated at 20 m2 per space 
end of announcement                               euro adhoc

Further inquiry note:

ECO Business-Immobilien AG
Friedrich Scheck, Chairman of the Management Board
Tel +43 1 535 2199

Roland Mayrl
Tel +43 1 504 6987 31

Branche: Real Estate
ISIN: AT0000617907
Börsen: Wiener Börse AG / Regulated free trade

Original-Content von: ECO Business-Immobilien AG, übermittelt durch news aktuell

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