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Homburg Invest Inc. (AMS:HII) Shares issued: Class A - 168,412,323 Class B - 31,514,782
Halifax, Nova Scotia, November 6, 2008 (TSX: HII.A & HII.B and NYSE Euronext Amsterdam: HII) - Richard Homburg, Chairman and CEO of Homburg Invest Inc. ("Homburg Invest" or "the Company") is pleased to announce Homburg Invest has released the September 30, 2008 financial results prepared under both Canadian Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). The complete September 30, 2008 financial results and MD&A will be available for viewing and downloading from the corporation's web site at www.homburginvest.com and at SEDAR at www.sedar.com.
The Company is pleased to announce a substantial increase in the results both under IFRS and Canadian GAAP for the nine months ended September 30, 2008.
Increase in IFRS results: * Property revenue increased 51.8% to $228.6 million compared to September 30, 2007 * Property net operating income (note) increased 38.9% to $168.0 million compared to September 30, 2007 * Funds from operations per share (note) increased 58.3% to $0.38 compared to September 30, 2007 * Funds from operations (note) increased 105.4% to $74.8 million compared to September 30, 2007
Increase in Canadian GAAP results: * Property revenue increased 53.3% to $227.0 million compared to September 30, 2007 * Property net operating income (note) increased 39.0% to $166.4 million compared to September 30, 2007 * Funds from operations per share (note) increased 68.0% to $0.42 compared to September 30, 2007 * Funds from operations (note) increased 118.8% to $82.4 million compared to September 30, 2007
Current market conditions validate the Company's diversification strategy. Year to date, the mark to market adjustment of our Investment Property portfolio has been a decrease of 0.85%, based upon our IFRS Financial Statements.
The Company is currently one of the only Canadian public companies releasing information with respect to the current market value of its real estate.
Operationally, the occupancy levels remain strong with an overall weighted average occupancy rate of 96.3% compared to 97.3% at December 31, 2007.
"Same Property" (properties owned throughout the entire comparative reporting periods) N0I increased by 4.0% in the third quarter and 1.9% year to date compared to the same period in 2007.
The Company prepares it's quarterly and annual statements under both GAAP and IFRS. This reflects the Board's view that the IFRS presentation most accurately reflects the financial position of a real estate investment company, while at the same time the Company continues to comply with requirements to produce its results under GAAP. This also reflects the Company's desire to provide its shareholders with as much information as possible in today's environment of continuing concerns with respect to financial disclosure in the market place.
The most significant differences between IFRS and GAAP statements are that while the IFRS statements reflect the investment properties at fair value and are without depreciation charges, the GAAP statements record the fixed assets at historical cost less accumulated depreciation. In addition, deferred charges relating to leasing fees have been recorded as an asset in the GAAP financial statements and will be charged to expense over the period of the related lease. These charges are written off in the period incurred under IFRS.
Financial Highlights - IFRS Third Quarter ended September 30, 2008 (000's) Nine Months Nine Months Ended Ended September 30 September 30 2008 2007 Increase Property revenue $228,572 $150,582 51.8% Property net operating income $167,969 $120,950 38.9% Funds from operations $74,846 $36,444 105.4% Funds from operations per share - $0.38/$0.37 $0.24/$0.23 58.3% basic and diluted
Financial Highlights - IFRS Third Quarter ended September 30, 2008 (000's) Three Months Three Months Ended Ended September 30 September 30 2008 2007 Increase Property revenue $76,469 $55,621 37.5% Property net operating income $55,757 $42,154 32.3% Funds from operations $18,762 $12,777 46.8% Funds from operations per share - $0.09/$0.09 $0.07/$0.07 28.6% basic and diluted
Property revenue for the third quarter is up 37.5% over the same quarter in 2007 to $76.5 million. At the same time property net operating income (NOI) increased to $55.8 million from $42.2 million, an increase of 32.3%.
The positive aspects of the growth in our portfolio also manifest themselves in our funds from operations ("FFO") which improved to $74.8 million for the nine months ended September 30, 2008, up 105.4% from the $36.4 million to September 30, 2007. On an annualized basis this is a FFO of $0.51 per share, which is a FFO payout ratio (note) of 86.3%. Shareholders' equity increased from $886.3 million at December 31, 2007 to $887.5 million at September 30, 2008.
Net asset value per share (note) at September 30, 2008 under IFRS is $4.44. The current global capital and real estate markets are experiencing significant and dramatic change. As a result, there has been a tightening of access to capital for new debt as well as refinancing existing debt as it matures. We believe we are well positioned to withstand this credit crisis as only $87.6 million, or 3.3%, of our total long term debt is maturing over the next 15 months to the end of 2009; and this maturing debt has a weighted average interest rate of 6.55%. We have already secured refinancing on $42.1 million of that maturing amount at an effective interest rate of 5.4%.
The Company has been very successful in the past in raising non-asset backed debt financing and mortgage bond financing on the global market to the extent of $700 million. The Company can continue to look to these unique financing markets for additional funds.
With the tightening of the capital markets, the Company feels it is prudent to raise cash from various sources and is exploring various alternatives such as partnering of deals, selling (a portion) of specific projects, delaying start of development projects and the potential issue of new equity bonds.
Our objective is to further strengthen the balance sheet.
Financial Highlights - GAAP Third Quarter ended September 30, 2008 (000's) Nine Months Nine Months Ended Ended September 30 September 30 2008 2007 Increase Property revenue $226,981 $148,093 53.3% Property net operating income $166,378 $119,691 39.0% Funds from operations $82,427 $37,674 118.8% Funds from operations per share - $0.42/$0.41 $0.25/$0.24 68.0% basic and diluted
Financial Highlights - GAAP Third Quarter ended September 30, 2008 (000's) Three Months Three Months Ended Ended September 30 September 30 2008 2007 Increase Property revenue $75,740 $53,132 42.6% Property net operating income $55,028 $40,895 34.6% Funds from operations $20,260 $11,638 74.1% Funds from operations per share - $0.10/$0.10 $0.06/$0.06 66.7% basic and diluted
Homburg Invest, with its head office in Halifax, Nova Scotia, owns and develops a diversified portfolio of quality real estate including office, retail, industrial and residential apartment and townhouse properties throughout Canada, the United States and Western Europe. -30- For further information, please contact:
Mr. Richard Homburg, Chairman and CEO Homburg Invest Inc. 902-468-3395
or
J. Richard Stolle President and COO Homburg Invest Inc. 31-20-573-3855
This news release may contain statements which by their nature are forward looking and express the Company's beliefs, expectations or intentions regarding future performance, future events or trends. Forward looking statements are made by the Company in good faith, given management's expectations or intentions however, they are subject to market conditions, acquisitions, occupancy rates, capital requirements, sources of funds, expense levels, operating performance and other matters. Therefore, forward looking statements contain assumptions which are subject to various factors including: unknown risks and uncertainties: general economic conditions; local market factors; performance of other third parties; environmental concerns; and interest rates, any of which may cause actual results to differ from the Company's good faith beliefs, expectations or intentions which have been expressed in or may be implied from this news release. Therefore, forward looking statements are not guarantees of future performance and are subject to known and unknown risks. Information and statements in this document, other than historical information, should be considered forward-looking and reflect management's current views of future events and financial performance that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially include, but are not limited to, the following: general economic conditions and developments within the real estate industry, competition and the management of growth. The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.
Note
Non GAAP and Non IFRS Financial Measures
This news release includes measures widely accepted within the real estate industry which are not defined under CDN GAAP or IFRS. These measures include Funds from Operations, Funds from Operations per share, Property Net Operating Income, Net Asset Value per share, and Payout Ratio. As these are not defined measures under CDN GAAP or IFRS, other issuers' may have different calculations from those used by the Company.
The Company considers these amounts to be measures of operating and financial performance.
a) Funds from Operations ("FFO") and FFO per share are presented by the Company as net income (loss) from continuing operations adjusted for amortization, stock based compensation, deferred and capital income taxes, unrealized and realized valuation changes, and unrealized foreign exchange gains; divided by the weighted average number of shares outstanding b) FFO payout ratio is presented by the Company as dividends per share divided by funds from operations per share c) Property Net operating income ("N0I") is presented by the Company as Property Revenue less Property Operating Expenses d) Net Asset Value per share is presented by the Company as Shareholders' Equity divided by the number of shares outstanding at period end. This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
