NEW DUTCH ACCOUNTING PRINCIPLES
The 2004 net profit definition has been adapted, following the recent changes in Dutch accounting principles. As a result, net profit now includes formerly indirect results and 100% of the management costs (previously 70%). Indirect results comprise realized results on disposals, unrealized revaluation results on both the standing portfolio of property investments as well as the pipeline project investments and deferred tax on the revaluation. Previously, net profit reflected direct result, while the indirect results were part of the movements in shareholders' equity. Consequently, the reported net profit will become more volatile compared to previous years. Direct result after tax comprises of net rental income minus net financing costs, 100% of management costs and income tax. Based on these changes, the direct result after tax will be less volatile than net profit and will be more in line with net profit figures as reported under the previous Dutch accounting rules. The comparative H1 2003 figures have been adjusted in accordance with the Dutch accounting principles.
Rotterdam, 5 August 2004 - Rodamco Europe, the largest publicly listed property investment and management company in the retail sector in Europe, continued its stable trend in financial results in the first half of 2004. Rodamco Europe reported a 13.5% year-on-year (YoY) rise in H1 2004 net profits to € 184.4 million compared to € 162.5 million in the first half of 2003. The net profit figure has been compiled according to the new Dutch accounting standards, including revaluation results and 100% of management costs. The net profit comprises a 7.1% year-on-year (YoY) rise in direct result after tax to € 160.8 million, (which includes 100% management costs, but excludes revaluation result after tax), the main contributor being a YoY increase of 9.5% in net rental income. The revaluation result after tax was € 23.6 million. Direct result per share increased to € 1.79 for the first half-year of 2004, which compares to € 1.67 in the same period last year.
Net Asset Value per share (before interim dividend 2004) amounted to € 48.59 as of 30 June 2004. In the first half of 2004, Rodamco Europe divested offices and industrials (in Spain) for an amount of € 82 million and invested in retail for an amount of € 27 million, further strengthening Rodamco Europe's high quality retail portfolio.
CEO Maarten Hulshoff: "In the first half of 2004 Rodamco Europe continued its stable growth in both rental income as well as direct result. The majority of the growth was driven by acquisitions made in 2003. The company further experienced a shift towards higher property values in its portfolio, reflecting investors' continuing appetite for retail properties as well as some positive signs in consumer confidence in our home countries. Rodamco Europe will continue to focus on top quality retail in dominant locations in its key markets, whilst further emphasizing active retail management of its retail properties. Retail properties, mostly shopping centres, now make up 86% of the total € 7.2 billion property portfolio.
As previously announced, Rodamco Europe is further expanding its business risk management activities in the unstable economic environment. Coupled with the small, albeit noticeable shift towards increased consumer confidence in its home markets, Rodamco Europe is confident that it will reach its growth target for 2004. "
[1] Before interim dividend 2004 of € 1.15 per share
[2] Before final dividend 2003 of € 1.75 per share
