SONAE IMOBILIÁRIA SGPS, SA - Sociedade Aberta
Lugar do Espido - Via Norte, 4471-909 Maia
Capital Social: Eur 187 125 000
C.R.C. Porto (Matricula nº. 2252A)
Pessoa Colectiva Nº. 502 290 811
1st quarter of 2002
Sonae Imobiliária: Net consolidated profit grows 124.6%
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First Iberian Real Estate Company to adopt IAS (2001)
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Net consolidated Profit reaches € 36.6 million, 124.6% growth
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The Profit before Tax is € 56.1 million, an increase of 133.0% on 2001
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Profits from Investments reached € 61.1 million
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Direct Income totaling € 76.2 million, an increase of 15.1 %
INTRODUCTION
Sonae Imobiliária's Net Consolidated Profit after Minority Interests (non-audited) for the 1st quarter of 2002 increased by 124.6 %, reaching € 36.6 million versus € 16.3 million in the corresponding period of 2001 (restated to IAS format).
In 2001 Sonae Imobiliária decided to adopt the International Accounting Standards (IAS) in its Consolidated Accounts. This decision was based on several reasons. The Company Results from now on will include two basic components. The first, as up to now, corresponds to the Result realised on investments held, both current and arising on any disposal. The second component corresponds to the change in value of the investments portfolio, as determined by independent valuation.
As at 31 December 2001, the real estate assets of Sonae Imobiliária were independently valued at € 2.348 billion, of which € 1.362 billion are attributable to the Company. The Net Asset Value corresponding to those assets was € 934 million.
In accordance with the IAS, the Company obtained an independent valuation of Parque D. Pedro (SP, Brazil) as at inauguration date, and recognized the valuation surplus in relation to book cost as income of the period. The centre was valued at € 150 million (R$ 304 million), including € 6.8 million for the expansion capacity, amount that is excluded from IAS calculations. The book cost of the centre was € 101.5 million. This translates into a valuation gain attributable to Sonae Imobiliária (holder of a 97.5% position) of € 40.7 million. This amount, after deduction of deferred tax, was recognized as income of the year.
After the closing of the 1st quarter, Sonae Imobiliária has agreed with Sonae Capital the sale of Praedium, since the Company's strategy is to focus on the shopping center business.
SHOPPING CENTRES
The overall performance of our shopping centres was in line with expectations, with sales continuing their overall growth.
Total sales in our centres in Portugal increased by 28% in relation to the corresponding period in 2001. Part of the growth had to do with the inclusion in the portfolio of MadeiraShopping (Madeira, Portugal) and AlgarveShopping (Guia, Portugal), inaugurated in March and April 2001, and the acquisition of 50% of Arrábida Shopping (Vila Nova de Gaia, Portugal) in December 2001. On a like-for-like basis, growth was more than 9,8%.
Total rents in this portfolio increased by 28%, whereas on a like-for-like basis, the growth was 8%.
Sonae Imobiliária became owner or co-owner of 12 shopping centres, 3 shopping galleries and 1 retail park, in Portugal, with a total gross letable area (GLA) of 597,291 m2.
The shopping centres managed in Spain by Sonae Imobiliária had a satisfactory performance, in line with last year's. Total sales increased by 18.8% but most of this increase resulted from the inclusion of the Abadino and Jaca centres in the portfolio and the expansion of Centro Puente de la Ribera. Like-for-like, sales increased by 6%.
Plaza Mayor (Málaga, Spain), a leisure and retail centre held 75% by Sonae Imobiliária and 25% by Castle City was inaugurated in the 18th of April.
We continue work on other projects in Europe already discussed in the past: Aegean Park in Athens (Greece), Avenida M40 in Madrid (Spain), Toledo Shopping in Toledo (Spain), Viena Mitte in Viena (Austria), 3DO in Dortmund (Germany) and Brescia Centre in Brescia (Italy).
In Europe we continue to look for new projects, namely in Italy, France and Greece.
In Brazil, the performance of the five shopping centres co-owned by Sonae Enplanta (held 50% by Sonae Imobiliária) and managed by Unishopping (held 100% by Sonae Enplanta) were in line with expectations. Sales grew by 7.5% in relation to the first quarter of 2001, due to the opening of Parque Dom Pedro in March.
Parque D. Pedro (SP, Brazil) was inaugurated in March with strong public success. It represents an investment of € 100 million, with 360 shops distributed over 108,000 m2 of gross letable area (GLA) and should generate during this year, total sales of € 273 million and 30 million visitors.
Parque Dom Pedro (SP, Brazil) is the first development undertaken by Sonae Imobiliária outside Portugal. The Company holds 95% of Parque D. Pedro with the other 5% held by Sonae Enplanta, a joint-venture incorporated in 1999 and held jointly by Sonae Imobiliária and Enplanta Engenharia, a Brazillian company.
We continue to analyze other projects for shopping centres in Brazil, and during 2001 a new development called Center Sul was approved. It's a project for a shopping and leisure centre in the City of São Paulo, parish of Santo Amaro, State of S. Paulo, in Brazil. The estimated investment is € 30 million.
In ICSC Europe that took place in Monaco in April, MadeiraShopping (Madeira, Portugal) was awarded the first prize in the medium-sized shopping centre category. Sonae Imobiliária received also three prizes in the ICSC Jean Louis Solal Marketing Awards.
CAR PARKS
During this quarter, SPEL, has continued work on its investment program in the car parks of Praça de Lisboa (expansion) and Boavista, in Porto and Matosinhos (Marisqueiras).
In March, SPEL opened two new car parks: Brito Capelo in Matosinhos, and Estádio Universitário, in Lisbon.
The performance of this business was below our expectations since the parks inaugurated recently in Porto are being adversely affected by the lack of a consistent parking policy in the city. The lack of policing namely leads to anarchic parking in the street and consequent traffic problems but, more importantly, makes surface parking in effect, free and this is a strong disincentive to using paid car parks.
RESIDENTIAL DEVELOPMENT
Praedium is the Sonae Imobiliária subsidiary specializing in high-quality residential development in Portugal. During the 1st quarter, it started the delivery of the apartments of Edificio Seda I and continued the construction and marketing of Edifício Seda II, the second residential building in Quinta das Sedas in Matosinhos, Portugal.
FINANCIAL POSITION AND RESULTS
In consolidated terms, Sonae Imobiliária closed the 1st quarter of 2002 with Direct Income totaling € 76.2 million, an increase of 15.1 %. This increase resulted from the growth in rental and other operating income in our shopping centres, the additional income from MadeiraShopping (Madeira, Portugal), AlgarveShopping (G uia, Portugal), Parque Principado (Oviedo, Spain), inaugurated in March and April, and from the acquisition of 50% of Arrábida Shopping (Vila Nova de Gaia, Portugal) in December 2001, plus the sales registered in Praedium.
The indirect income from valuation of investments increased 362.7%, and refers to the valuation surplus of Parque D. Pedro (SP, Brazil) - in 2001, the gain corresponded to the valuation surplus in MadeiraShopping (Madeira, Portugal) valuation.
Profits from investments reached € 61.1 million, an increase of 116.5 % on last year. The Net Financial Cost continues to increase (€ 4.5 million) given that additional assets in operation are being added to the portfolio.
The Profit before Tax is € 56.1 million, an increase of 133.0% on 2001.
Out of that Profit before Tax, the share attributable to Minority Interests is € 0.5 million relating to profits in Praedium and Parque D. Pedro (SP, Brazil).
The Net Profit (after Minorities) is € 36.6 million and corresponds to a growth of 124.6 % on the first quarter of 2001.
PROFIT & LOSS ACCOUNTS BY BUSINESS (PRO-FORMA)
We are presenting pro-forma Profit & Loss accounts by business, according to the IAS . The 2001 accounts have been to restated to the IAS format.
Maia, 1st May 2002.
The Board of Directors