Regulatory News:
The Board of Directors of Societe Fonciere Lyonnaise (Paris:FLY),
chaired by Mariano Miguel, met on 14 February 2008 to approve the
financial statements for the year ended 31 December 2007. Presented by
Yves Mansion, these financial statements show further growth in
property rentals, operating profit and current cash flow, along with
increases in the value of the property portfolio and NAV.
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Consolidated results (EUR millions)
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2007 2006
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Property rentals 170.4 161.5
Operating profit before fair value
adjustments 147.3 134.8
Attributable profit 416.5 606.6
Attributable current cash flow 97.2 79.2
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31 December 31 December
2007 2006
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Portfolio value excluding transfer costs 3,909 3,320
Portfolio value including transfer costs 4,132 3,511
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Diluted NAV/share excluding transfer costs EUR 58.8 EUR 53.0
Diluted NAV/share including transfer costs EUR 63.6 EUR 57.4
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Results
- Property rentals for the year amounted to EUR 170.4 million, an
increase of 5.5% compared with EUR 161.5 million in 2006. Based on a
comparable scope of consolidation, the increase was 3.6%.
- Operating profit before fair value adjustments rose 9.3% to EUR
147.3 million from EUR 134.8 million in 2006.
- Fair value adjustments to investment properties, as determined
by independent valuers, came to a positive EUR 365.1 million,
representing a 12% increase in aggregate market value over the year on
a comparable portfolio basis. Fair value adjustments in 2006 were a
positive EUR 533.8 million.
- Net gains from property disposals during the year amounted to
EUR 3.3 million versus EUR 49.5 million in 2006 when the volume of
disposals was significantly higher.
- Profit attributable to equity holders of the parent came to EUR
416.5 million in 2007. The decline compared with 2006 was entirely due
to lower fair value adjustments to the property portfolio. All other
profit indicators increased year-on-year.
- Current cash flow attributable to equity holders of the parent
(excluding disposals) rose 22.8% to EUR 97.2 million in 2007 from EUR
79.2 million the previous year, primarily led by higher rents and a
reduced impact of rent-free periods. Current cash flow per share -
based on the average number of shares outstanding during the year -
rose 15.8% to EUR 2.13 from EUR 1.84 in 2006.
Business review
At 98.9%, the occupancy rate at 31 December 2007 remained very
satisfactory. During the year, the Company let the remodelled 12,000
square-meter building at 104/110 boulevard Haussmann, as well as two
renovated properties on avenue Velasquez and rue Alfred de Vigny.
In addition, SFL acquired full ownership of two properties, as
follows:
-- Predica sold its 50% interest in SCI Paul Cezanne to SFL for
EUR 198.7 million, paid in newly-issued SFL shares, thereby
raising SFL´s interest in the Cezanne Saint-Honore property to
100%.
-- SFL and Teachers agreed to an asset swap, whereby SFL acquired
75% of the building at 96 avenue d´Iena for EUR 75 million, in
addition to the 25% it already held.
In October 2007, SFL signed an agreement with Semapa (the Paris
city authorities´ development agency) for the acquisition of building
rights for the T8 project comprising some 35,000 square metres of
offices, retail units and residential units. The building will be
constructed above the railway tracks leading into Austerlitz station
in the Paris Rive Gauche district. The cover will be built by Semapa
and the building is scheduled to be delivered at the end of 2012.
Disposals for the year concerned the sale to Teachers of minority
stakes in the Tour Areva (La Defense) for EUR 72.4 million, as part of
the asset swap referred to above, and the sale of the 46 avenue Kleber
building owned jointly with IDF, for which SFL´s share of the proceeds
amounted to EUR 20.7 million.
Renovation and remodelling projects in progress at 31 December
2007 concerned four properties together representing some 47,000
square metres. In the first quarter of 2008, remodelling work will
begin on 12,000 square metres of offices in the Centre d´Affaires Le
Louvre that have recently been vacated. These transactions represent a
potential EUR 40 million in incremental rental revenue over the period
2008 to 2010.
NAV and Financing
The estimated market value of the portfolio at 31 December 2007
was EUR 3,909 million excluding transfer costs, an increase of 17.7%
compared with EUR 3,320 million at 31 December 2006. The estimated
replacement value, including transfer costs, at 31 December 2007 was
EUR 4,132 million. On a like-for-like basis, portfolio value rose 12%
over the year.
SFL continues to focus on high quality office properties in the
prime business districts of Paris.
The $125 million in US Private Placement Notes were redeemed in
advance at the beginning of the year, as planned, and three new 5 and
7-year corporate lines of credit were set up for a total of EUR 250
million at a spread of around 50 bps.
Net debt at 31 December 2007 amounted to EUR 1,043 million,
representing a loan-to-value ratio of 25.2%. The average cost of debt
in 2007 was 5.3%.
On this basis, at 31 December 2007 fully diluted NAV per share
including transfer costs stood at EUR 63.6, up 10.7% compared with EUR
57.4 at 31 December 2006. NAV per share excluding transfer costs was
EUR 58.8 versus EUR 53.0 at 31 December 2006.
Governance
Following its decision on 5 February to open a data room for
Investment Corporation of Dubai (ICD), the Board has today decided to
create a Committee of Independent Directors made up of Tony Wyand,
Jean Arvis, Jacques Calvet and Yves Defline.
This temporary committee will be responsible for making
recommendations to the Board concerning any proposed transactions
related to a possible change of control of the Company.
With an exceptional portfolio of properties valued at more than
EUR 3.9 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:
Euronext Paris Compartment A - Euronext Paris ISIN FR0000033409 -
Bloomberg: FLY FP - Reuters: FLYP PA
