Results of operations

Retail sales in Germany declined by 2.4% in nominal terms in the year under review. This effect was also felt by the tenants of our shopping centers, whose revenue fell by 2.5% on a like-for-like basis. If our international properties are included in this comparison, then our tenants generated a like-for-like drop in revenue of 2.0%.

Consolidated revenue up 11%

Consolidated revenue was up 11.0% from €115.3 million to €127.6 million in the financial year. The Stadt-Galerie in Hameln, the Stadt-Galerie in Passau (first full year for both) and the full consolidation of the property company in Kassel contributed to this growth in revenue.

Higher rental income for almost all portfolio properties

For the most part, rental income for the portfolio properties developed positively. Total revenue rose by 2.0% on a like-for-like basis.

REVENUE € thousand	2009	2008	2007
* = proportionally consolidated
** = fully consolidated in 2009 for the first time
Rhein-Neckar-Zentrum, Viernheim	16,988	16,686	16,307
Main-Taunus-Zentrum, Sulzbach*	10,285	10,378	10,011
Allee-Center, Hamm	9,010	9,591	9,398
City-Arkaden, Wuppertal	8,655	8,559	8,233
City-Galerie, Wolfsburg	8,522	8,323	8,326
Forum, Wetzlar	8,498	8,265	8,137
Rathaus-Center, Dessau	8,195	8,149	8,207
Altmarkt-Galerie, Dresden*	6,673	6,548	6,386
Phoenix-Center, Hamburg*	5,758	5,634	5,538
Stadt-Galerie, Hameln	6,546	5,484	0
City-Point, Kassel**	7,285	3,057	3,031
Stadt-Galerie, Passau	8,588	2,925	0
Total Germany	105,003	93,599	83,574
Galeria Baltycka, Gdansk	13,150	12,794	3,439
City Arkaden, Klagenfurt*	5,329	5,256	5,159
Árkád, Pécs*	3,736	3,694	3,590
Other revenue	345	0	0
Total abroad	22,215	21,744	12,188
Total	127,563	115,343	95,762

Vacancy rate stable at under 1%

As in the previous year, the vacancy rate was under 1%. At €0.6 million (2008: €0.2 million) or 0.4% (2008: 0.2%), the need for write-downs for rent losses remained at a very low level.

Operating and administrative costs for property unchanged

On balance, there was no change in the operating and administrative costs for our shopping centers compared to the previous year. Property operating costs were €5.8 million (2008: €5.8 million), while property management costs amounted to €7.2 million (2008: €7.2 million). Various higher costs arising due to the new properties were offset, in particular, by the absence of the center opening costs incurred in the previous year.

Net finance costs rise

Net finance costs were up €6.5 million to €-55.9 million (2008: €-49.4 million) This rise is attributable firstly to a higher interest expense (€+3.6 million compared with the previous year) and secondly to a decline of €1.7 million in interest income, which fell from €2.4 million to €0.7 million. In addition, the share of operating profit attributable to minority shareholders was €2.0 million above the level of the previous year (€6.2 million) at €8.2 million.

The higher interest expense and the higher profit share for minority interests were due almost exclusively to the first-time inclusion of City-Point Kassel and the properties opened in Hameln and Passau during the previous year.

The results from the property companies measured at equity, which in the previous year had been incorporated in the measurement gains/losses at €-1.3 million, were also reported in the net finance costs for the first time at €-0.1 million. Income from investments fell from €1.7 million to €1.5 million.

Measurement gains lower

Measurement gains fell by €53.0 million year-on-year from €38.2 million to €-14.8 million. Measurement of the portfolio properties led to net measurement losses for the first time; these amounted to €-20.5 million. This corresponds to average depreciation of around 1.1% in the market values of the shopping centers compared with the previous year. Market values increased for six of the properties in a range from +0% to +4.7%. Depreciation affected nine properties, with market values falling short of the previous year’s level by between 0.7% and 5.1%.

At the same time, gains of €5.7 million were realised in connection with the first-time full consolidation of our property company City-Point-Kassel GmbH & Co. KG, as the shares acquired in the company were purchased at less than their corresponding market value.

The share of measurement gains attributable to minority shareholders was €+0.8 million. Unrealised exchange gains and other measurements produced gains of €0.5 million.

Tax item almost exclusively comprises deferred income taxes

The tax burden in the year under review amounted to €5.7 million and was attributable almost exclusively to deferred income taxes.

Consolidated profit totals €34.4 million

Earnings before interest and taxes (EBIT) climbed 12.8% from €98.1 million to €110.7 million in the year under review. At €40.1 million, pre-tax profit (EBT) was 53.9% lower than in the previous year (€87.0 million). Consolidated profit fell by 50% from €68.9 million to €34.4 million.

Earnings per share

Undiluted earnings per share amounted to €0.93 compared with €1.96 in the previous year. Of this amount, €1.25 (+13%) was attributable to operations (2008: €1.11) and €-0.32 (-138%) to measurement gains/losses (2008: €0.85).

Funds from operations (FFO)

FFO is used to finance ongoing investments in portfolio properties, scheduled payments on our long-term bank loans and the distribution of dividends. An FFO of €54.8 million or €1.49 per share was generated in the year under review, up from €49.8 million or €1.38 per share in the previous year.

€ thousand	2009	2008
Net income for the period	34,367	68,872
plus deferred taxes	5,664	18,010
plus/less measurement gains/losses	14,772	-38,326
FFO	54,803	48,556
FFO per share (€)	1.49	1.38

Dividend proposal: €1.05 per share

In view of the successful financial year, the Executive Board and Supervisory Board will propose to the shareholders at the Annual General Meeting on 17 June 2010 in Hamburg that an unchanged dividend of €1.05 per share be distributed for the 2009 financial year.

Back to: Results of operations, financial position and net assets