Maia, Portugal - November 10th 2010
Results of the third quarter of 2010
Sonae Sierra recorded a Total Net Profit of €14.9 million
- EBITDA grew 13% to €89.9 million
- NAV grew 2% to €1.25 billion
- Portfolio sales grew 6.9% in Europe and 24.6% in Brazil (in Reais)
- Global occupancy levels grew 0.5% to 96.4%
- LeiriaShopping sold to Sierra Portugal Fund for €92 million
Sonae Sierra, the international shopping centre specialist, presented a Total Net Profit of €14.9 million at the end of the third quarter of 2010, an increase of 116% versus the same period of last year.
The favourable change in the Total Net Profit was mainly driven by a 42% increase of the Direct Results. Value Created was positive, in spite of slight yield increases in Portugal and Greece, thanks to good overall operating performance.
In fact, the Direct Income from Investments recorded an 8% increase compared to the first nine months of 2009, mainly due to the increase of the portfolio with the inaugurations of LOOP5 in Germany and Manauara Shopping in Brazil in 2009, and LeiriaShopping, in Portugal, in 2010.
EBITDA recorded a 13% increase, and is now at €89.9 million, compared to the €79.7 million presented in the first nine months of 2009. This increase derives not only from the inaugurations mentioned above, but also from efficiency gains as a consequence of the pro-active and persistent efforts in containing cost increases in all areas of the Company.
Sonae Sierra's portfolio presented a positive performance when compared with the first nine months of last year, with sales growing 6.9% (+1.5% like-for-like) in Europe and 24.6% (+17.8% like-for-like) in Brazil (in Reais). The Total Rents grew 11.2% when compared with the same period of last year (+4.8% like-for-like).
The Occupancy Rate of the portfolio remained high and stable, recording a value of 96.4% at the end of September 2010.
Value Metrics
The Company measures its performance, in a first instance, on the basis of changes in Net Asset Value (NAV) plus dividends distributed. The Company calculates its NAV according to the guidelines published in 2007 by INREV (European Association for Investors in Non-listed Real Estate Vehicles), an association of which the Company is a member.
On the basis of this methodology, the NAV of Sonae Sierra, as of September 30 2010, was €1.25 billion, an increase of 2.0% compared to the value recorded at the end of 2009.
New project under construction and several agreements for third party property management and leasing
Sonae Sierra continues with its growth and expansion strategy, although the Company has adjusted its development timings to the evolution of the financial and retail markets.
During the third quarter of this year the Company successfully completed the food-court refurbishment of Centro Vasco da Gama (Lisbon, Portugal), and started the construction of Boulevard Londrina (Londrina, Brazil), a 47.800 m2 GLA shopping centre that represents an investment of €97 million which is schedule to open in 2012.
At the end of the first nine months of 2010, the Company has three new shopping centres under construction and 7 projects in different stages of development in Portugal, Italy, Germany, Greece, Romania and Brazil.
In Italy, Sonae Sierra is currently developing Le Terrazze in La Spezia, which is scheduled to be inaugurated in the third quarter of 2011, representing an investment of more than €125 million. Currently, 65% of its GLA is already let. In Brazil, besides Boulevard Londrina, the Company is developing Uberlândia Shopping (Uberlândia) scheduled to open in 2011, and representing a total investment of €62 million.
During the third quarter of the year the company signed three new service contracts to lease and/or manage third-party shopping centres in Spain, Italy and Greece. Also in the services forefront, Sonae Sierra is currently providing Development services to third-party projects in Portugal, Italy, Romania, Cyprus, Serbia, Morocco and China.
Sonae Sierra sells 100% of LeiriaShopping for €92 million to Sierra Portugal Fund (SPF)
The SPF, seeded in 2008 with eight Portuguese shopping centres, now counts with LeiriaShopping to contribute towards its objective of providing investors with capital growth and income return through the investment in a portfolio of high-quality Portuguese shopping and leisure centres.
With this operation Sonae Sierra's interest in the SPF has increased to approximately 47.5%. This transaction reinforces the Company's goal of increasing its asset management activity, while leveraging its investments through long term partnerships.
International recognition
In September Sonae Sierra received the "Best Retail Developer" award for Portugal, Spain and Italy at the Real Estate Awards, an initiative of Euromoney magazine, a leading international banking and economy publication.
The votes for the Real Estate Awards are cast by the readers of the magazine, and award the "Best Retail Developer" amongst the companies with greater dynamic and innovation ability in the creation of investment opportunities in the retail area.
About Sonae Sierra
Sonae Sierra, www.sonaesierra.com , is the international shopping centre specialist, with a passion for bringing innovation and excitement to the shopping centre industry. The Company owns 51 Shopping Centres in Portugal, Spain, Italy, Germany, Greece, Romania and Brazil, with a total Gross Lettable Area (GLA) of 2 million m2. Sonae Sierra is also providing services to third parties in Cyprus, Serbia, Morocco, Colombia and China. Currently, the Company has 3 projects under construction and 7 new projects in different phases of completion in Portugal, Italy, Germany, Greece, Romania and Brazil. In 2009 our Shopping Centres had more than 436 million visits.
