DGAP-News: ORCO Germany with an increase in operating result and progress on asset disposal program

ORCO Germany S.A. / Quartalsergebnis

21.05.2010 09:00

Veröffentlichung einer Corporate News,übermittelt
durch die DGAP – ein Unternehmen der EquityStory AG.
Für den Inhalt der Mitteilung ist der Emittent / Herausgeber verantwortlich.

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– Operating result of EUR 6.8 million vs. EUR -2.0 million in Q1 2009
– Company restructuring on track
– Asset disposal volume of EUR 62.7 million

In the first quarter of 2010, ORCO Germany improved its operational result
by EUR 8.8 million to EUR 6.8 million thanks to an acceleration of the
operational restructuring and a further improvement of the leasing
performance of the core business (GSG) despite a difficult market
environment. Leasing revenues were up 4.2 % due to an improvement of the
occupancy rate from 75.0% to 76.8% YoY and a 2.4% increase of the average
commercial rent to 6.29 EUR per sqm (based on the commercial business line
which represents 79% of the total GSG portfolio).

The net result of EUR -7.2 million has improved by EUR 11.8 million
compared to EUR -19.1 million (Q1/2009) but is still negative as financial
charges are still exceeding the operating result in Q1/2010. Whereas the
impact of lower interest charges as a consequence of asset disposals is not
yet reflected in Q1/2010 numbers, the operating result is starting to
reflect the positive impact of the restructuring efforts.

ORCO Germany has made significant progress on the announced asset disposal
program:

In Q1/2010 the company managed to transfer or sell properties worth
EUR62.7million at non distressed prices and at a premium to DTZ Valuation
of Q4/2009. The total sales price exceeded the corresponding loans (EUR
47.1 million) by EUR 15.6 million leading to a reduction in annualized
interest expenses of EUR 2.6 million compared to rental income generated of
EUR 2.1 million. Not only will this have a positive impact on the P&L of
the company but also strengthen the balance sheet by freeing up liquidity.

Assets sales contracted in Q1/2010 amounted to EUR 41.5 million (7.6% above
DTZ Valuation of Q4/2009).The disposals also include three non-strategic
assets with a volume of EUR 21.2 million which were sold in 2009 and
accounted for in Q1/2010. These assets were sold EUR 1.5m respectively 7.6%
above DTZ Valuation of Q2/2009 and on the level of the adjusted DTZ Value
of Q4/2009.

Further, on 5 May 2010 ORCO Germany announced the sale of a healthcare
portfolio. The transaction volume amounted to about EUR 40 million compared
to bank liabilities of around EUR 28.4 million and corresponded to a
premium compared to the DTZ Valuation of Q4/2009.

Hence, as of today, ORCO Germany managed to sell more than EUR 100 million
from the announced disposal program of EUR 230 million.

“Next to the good operating performance, we achieved a significant progress
in the ongoing disposals of non-strategic assets and we are well on track
with the restructuring of ORCO Germany“, says Rainer Bormann, CEO of ORCO
Germany.

Outlook
Even in a challenging environment Orco Germany“s core business GSG was able
again to increase both prices and occupancy rates. We expect this trend to
continue in the near future.
In the last quarters the results of ORCO Germany were much affected by the
fair value measurements of financial derivative instruments. We do not
expect the interest rates to decrease further,which would stop the decline
of fair values of derivative instruments.
ORCO will continue the announced disposal program. Most remaining asset
disposals processes are far advanced and expected to be finalized in the
coming months. At the end of the disposal process the company will have
expected leasing revenues of EUR 59.2 million per year and corresponding
financial charges of EUR 25.8 million (without revaluation of financial
instruments and bond interests). Over the course of 2010 the restructuring
process will be completed and lead to recurrent economies of approximately
EUR 10 million excluding financial charges.
Once the refocusing and operational restructuring completed the main
challenge will be the refinancing of the EUR 100 million corporate bond and
the EUR 300 million loan for GSG both maturing in mid 2012. The already
announced conversion of the EUR 17.6 million shareholder loan of ORCO
Property Group S.A. at EUR 1.60 per share and the related issue of free
warrants for existing shareholders will further support the stabilization
of the Company and strengthen the equity basis. The approval by the stock
exchange supervisory board for the conversion is expected to be obtained
shortly.

The complete quarterly report can be downloaded at
http://www.orcogermany.de/quartalsabschlusse.html.

About ORCO Germany
ORCO Germany S.A. is a property company that is listed in the Prime
Standard on the Regulated Market at Frankfurt Stock Exchange and has its
registered office in Luxembourg. The ORCO Germany Group, which acts
consistently under its registered name of ORCO Germany, has been operating
in Germany since 2004 and concentrates on commercial property as well as on
asset management and project development. ORCO currently has about 169
employees in Germany. ORCO Germany is a subsidiary of ORCO Property Group,
which is one of the leading Central European property companies. The
company established in 1991 is based in Luxembourg and has Euronext,
Prague, Budapest and Warsaw Stock Exchange listings.

IR/PR contact:

Kirchhoff Consult AG
Daphne Miller
T +49 40 60 91 86 18
daphne.miller@kirchhoff.de

21.05.2010 09:00 Ad-hoc-Meldungen, Finanznachrichten und Pressemitteilungenübermittelt durch die DGAP. Medienarchiv unterwww.dgap-medientreff.deundwww.dgap.de—————————————————————————

Sprache: Deutsch
Unternehmen: ORCO Germany S.A.
40, Parc d“Activités Capellen
8308 Capellen
Luxemburg
Telefon: +49 (0)30-440 123 190
Fax: +49 (0)30-440 123 299
E-Mail: seilers@orcogroup.com
Internet: www.orcogermany.de
ISIN: LU0251710041
WKN: A0JL4D
Börsen: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Düsseldorf, Stuttgart

Ende der Mitteilung DGAP News-Service

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