Atrium sees losses widen in Q1

Atrium European Real Estate reported a pre-tax loss of EUR 260 mln in the first quarter of 2009, resulting in an after-tax loss per share of EUR 1.036. The losses reflected a downward adjustment to the value of the development and land portfolio by EUR 110 mln to EUR 701 mln.

Cash flow from operating activities to EUR 16 mln from EUR 26 mln a year ago due to higher average interest expenses in the first quarter. As a result, net asset value per share decreased to EUR 9.22 from EUR 10.66 at end-December.

Earnings before interest, tax, depreciation and amortisation amounted to EUR 21 mln. Gross rental income increased by 19% to EUR 37 mln but fell 5% to EUR 29 mln on a like-for-like basis. Net rental income grew by 13% to EUR 29 mln but also fell on a like-for-like basis by 2% to EUR 25 mln. Borrowings fell from EUR 1.51 bn at end-December 2008, to EUR 1.26 bn as at 31 March 2009. The average occupancy rate slipped slightly to 93.4% from 93.6% at end-2008.

Commenting on the results, Rachel Lavine, CEO of Atrium European Real Estate, said: 'Throughout the period, yields have continued to move outwards, albeit at a slower pace than was witnessed in the final quarter of last year. Our focus will remain on maintaining cash flow from our operational assets, continuing our programme of improving operational efficiencies and working with our tenants to ensure that we can all trade through the current market conditions together. This will inevitably put further pressure on rental incomes, particularly those where tenants are also affected by currency devaluations, but we do take comfort that we have maintained occupancy during the first quarter at 93% and by the fact that both asset extensions which came on line this year are almost 100% let.'

Lavine said she maintained her 'firm belief' that centres like Atrium's, which are anchored by supermarkets selling food and other everyday necessities, are amongst the most resilient asset classes.