Atrium reports EUR 325m H1 loss due to writedowns

Atrium European Real Estate posted a EUR 325 mln loss for the first half of 2009 compared to a EUR 2 mln pre-tax profit for the first six months of 2008.
The CEE shopping centre specialist attributed the pre-tax loss mainly to devaluations of its standing investments, developments and land.

Atrium's standing assets were revalued downwards by EUR 237 mln to around EUR 1.49 bn in the first half. The land and development portfolio shed EUR 139 mln to EUR 712 mln. The writedowns were felt predominantly in Q1, with a noticeable slowdown in the rate of decline in Q2.

But Atrium stressed it was making solid progress in strengthening its financial and operational position. The company converted Austrian depositary certificates (ADCs) into ordinary shares in Vienna on Thursday and also began trading on Euronext Amsterdam via a dual listing.

Atrium reported net rental income grew 19.9% to EUR 59 mln in the first half, but fell 4.3% to EUR 50 mln on a like-for-like basis. Operating margin improved to 79% for the first half from 71% in 2008.

The company also said its balance sheet remained strong, with a cash balance at end-June of EUR 855 mln (2008: EUR 1.25 bn). Borrowings were reduced to EUR 1.08 bn from EUR 1.51 bn at end-December 2008 following the buyback of EUR 441 mln of shares. This reduced annualised interest payments by EUR 34 mln.

Rachel Lavine, CEO of Atrium European Real Estate, said: 'Against an ongoing difficult and unpredictable market backdrop, we have been quick to react and made good progress across all areas of the business. The economic climate and lower rental income in some countries have clearly impacted the value of our portfolio. However, despite yields continuing to move out in the second quarter of 2009, movements appear to be getting smaller and we are reaching a more stable level.'