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Empresas y finanzas

SFL 2006 Results


    SFL (Paris:FLY):

    -- Rental revenues up : +5,4 % to 161,5 MEUR

    -- Net profit up : + 167,8 % to 606,6 MEUR

    -- NAV per share (including transfer costs) up : 28.6% at EUR
    57.4

    Another year of growth in operating profit and portfolio values

    Adoption of the fair value model

    The Board of Directors of Societe Fonciere Lyonnaise, chaired by
    Luis Portillo, met on 8 February 2007 to approve the 2006 financial
    statements prepared for the first time using the fair value model,
    corresponding to the benchmark method under IFRS. These financial
    statements show a continued increase in rental revenues, despite the
    disposals carried out during the year, and a sharp rise in the value
    of the investment portfolio which is reflected in the growth in NAV.

    Results

    Rental revenues for the period totalled EUR 161.5 million, an
    increase of 5.4% compared with EUR 153.3 million in 2005.
    Like-for-like rental revenues were up 2.7%.

    The investment portfolio increased by EUR 533.8 million over the
    year compared with EUR 128.1 million in 2005, reflecting a 22.4% rise
    in fair market values before the effect of property purchases and
    sales.

    Property sales generated a profit of EUR 49.5 million, up from EUR
    8.0 million in 2005.

    Attributable net profit for the year came to EUR 606.6 million
    compared with pro forma profit of EUR 226.5 million for 2005,
    determined by retrospectively applying the fair value model.

    Attributable current cash flow, excluding the effect of property
    disposals, declined to EUR 79.2 million in 2006 from EUR 92.8 million
    the previous year, partly as a result of higher interest payments in
    2006. In addition, 2005 current cash flow was boosted by the proceeds
    from sales of treasury shares and from the disposal of an equity
    investment.

    Business Review

    The occupancy rate at 31 December 2006 stood at a very
    satisfactory 97.8%.

    During the year, seven properties containing residential units
    were sold for a total of EUR 218.1 million, marking the final stage of
    the Company's strategic refocusing on office and retail property. The
    bulk of the sales were completed in the fourth quarter, at prices that
    were higher than the most recent valuations.

    Three properties were purchased for a total of EUR 250 million.
    Two of the buildings - at 247-251 rue Saint-Honore and 103 rue de
    Grenelle in Paris - will be extensively renovated, while the third -
    located in Issy les Moulineaux - was acquired fully let.

    The property at 247-251 rue Saint Honore, which currently
    comprises 22,000 square meters of office and retail space, is being
    converted into a luxury hotel with 150 rooms and suites scheduled for
    delivery at the end of 2010. Ideally located in the first
    arrondissement, between Place Vendome and the Tuileries gardens, the
    building will become the first Mandarin Oriental hotel in Paris, under
    an agreement that provides for the signature of a 12-year renewable
    lease once the necessary permits have been obtained. The architect for
    the building is Jean-Michel Wilmotte.

    Including these acquisitions, renovation programmes underway
    during the period concerned five properties, located for the most part
    in Paris's Central Business District, representing nearly 60,000
    square meters. Renovation of the rue Alfred de Vigny property was
    completed on schedule at the end of December. In all, these properties
    will potentially represent some EUR 40 million in additional rental
    revenues from 2010, once they have all been handed over.

    Portfolio value and NAV

    The estimated market value of the property portfolio at 31
    December 2006 was EUR 3,320 million excluding transfer costs, an
    increase of 27% compared with EUR 2,615 million at 31 December 2005.
    The estimated replacement value - including transfer costs - at 31
    December 2006 was EUR 3,511 million. On a like-for-like basis, the
    underlying market value of the portfolio rose 22.4% over the year,
    attesting to the effectiveness of SFL's strategic focus on office
    properties in the prime business districts of Paris, as well as on
    retail properties on the capital's finest shopping streets.

    At 31 December 2006, the loan-to-value ratio stood at 24.5%.

    On this basis, at 31 December 2006 SFL's fully diluted NAV per
    share including transfer costs stood at EUR 57.4, up 28.6% compared
    with EUR 44.6 at the 2005 year-end. NAV per share excluding transfer
    costs was EUR 53.0 compared with EUR 41.3 at 31 December 2005.

    The Board of Directors will meet again on 12 March to call the
    Annual General Meeting scheduled for 9 May.

    With an exceptional portfolio of properties valued at more than
    EUR 3.3 billion net of transfer costs, essentially located in the
    Paris Central Business District, SFL is a preferred vehicle for
    investors wishing to invest in the Paris office and retail property
    market. As the leading player in this market, the Group is firmly
    focused on pro-actively managing high-quality property assets. SFL has
    elected to be taxed as an SIIC since 2003.

    STOCK MARKET : Eurolist Compartiment A - Euronext Paris ISIN
    FR0000033409 - Bloomberg : FLY FP - Reuters : FLYP PA