Bloomberg News

Unibail-Rodamco Earnings Fall as Disposals Crimp Rent Income

February 02, 2012

(Updates with forecast from chief financial officer in fourth paragraph, rental income in seventh.)

Feb. 1 (Bloomberg) -- Unibail-Rodamco SE, Europe’s largest publicly traded property company, said full-year profit fell 2.6 percent after it sold properties and paid a special dividend.

Earnings excluding changes in the value of properties and interest-rate derivatives, known as recurring profit, fell to 829.6 million euros ($1.1 billion), or 9.03 euros a share, from 847.9 million euros, or 9.27 euros, a year earlier the Paris- based company said in a statement.

The earnings per share exceeded the average 8.92-euros-a- share estimate of 22 analysts and were better than the 3 percent drop Chief Executive Officer Guillaume Poitrinal had predicted as a result of disposals and a 1.8 billion-euro special dividend.

“We’re shifting gears,” Chief Financial Officer Peter van Rossum said on a conference call. He forecast a 4 percent increase in recurring earnings per share in 2012.

Since he led Unibail’s acquisition of Rodamco in 2007, Poitrinal has sold 5.6 billion euros of properties to focus the company’s investments on large dominant malls that attract shoppers and higher-paying retail brands.

Unibail-Rodamco said this enabled it to sign 104 leases with “premium” retail brands, including Superdry and Holister, compared with 48 in 2010 and 14 in 2009.

Net rental income excluding acquisitions and disposals increased by 4.4 percent, after the company attracted tenants like Apple Inc. and Forever 21 Inc. Rents for renewed leases rose by more than 19 percent.

Tenant Sales Rise

Sales generated by tenants at the company’s centers rose 2.8 percent last year, compared with a 0.8 percent decline in retail sales nationally in the same countries, van Rossum said. The company has a “positive outlook,” he added, even though many European economies face recession this year.

Net asset value rose 2.9 percent in the six months to Dec. 31 to 130.70 euros, the company said today.

Gains in property values contributed 498.2 million euros to Unibail-Rodamco’s 1.33-billion-euro net income. In 2010, a larger appreciation of its properties prompted the company to report a restated net income of 2.19 billion euros.

Net rental income was little changed at 1.26 billion euros after Unibail-Rodamco sold 1.3 billion euros of real estate last year. The company plans to pay a dividend of 8 euros a share.

Unibail-Rodamco reported its full-year earnings after the market close. The shares rose 2.7 percent to 150.80 euros in Paris. The stock has declined 1.9 percent during the past six months, compared with a 9.9 percent drop for the FTSE EPRA- Nareit Real Estate Index.

--Editor: Ross Larsen

To contact the reporter on this story: Simon Packard in Paris at

To contact the editor responsible for this story: Andrew Blackman at

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