Babis Vovos posts EUR 172m loss, scraps dividend

Greek property developer Babis Vovos swung to a pre-tax loss of EUR 172 mln in 2008 from a profit of EUR 12 mln a year following a EUR 83.4 mln depreciation of its investment portfolio. Net Asset Value per share plunged by 26.6 % in 2008 to EUR14.66.

The company said that its management has undertaken a more conservative strategy aimed at minimizing corporate risk after a 'turbulent' 2008. For the next two years, the company will seek to restructure its short-term bank borrowings, and has initiated negotiations with its lending banks in order to extend the repayment schedule of the bank loans, as well as restructure the respective loan contracts.

'So far, we have already completed the refinancing of EUR 125 mln of debt, associated to the Votanikos project, representing 58% of the total short-term loans,' the company said. It added that in the future new developments will be undertaken only where funding is in place and sales will be avoided in light of the current negative market conditions.

The group’s bank debt increased by 20.7% to EUR 260 mln in 2008 mainly due to new loan facilities of EUR 113.7 mln to cover the development costs at Votanikos, Poros and Sounio, as well as to provide working capital. The company has scrapped its 2008 dividend as a result of limited property sales in 2008, and a significant development pipeline under construction.