IVG expects to break even by end-2012

IVG Immobilien reported a consolidated net loss of EUR 11. 2 mln for the second quarter, up 57% on the EUR 4.8 mln loss in the first three months of 2012.

But Germany's largest listed real estate company said it expected to break even by year end in accordance with its earlier forecast.

Revenues in Q2 climbed by EUR 9 mln to EUR 111 mln, predominantly as a result of an increase in net rents in the Investment area and greater structuring income for the placement of IVG EuroSelect 21 Munich fund in the segment Funds (Private Funds). Other revenues also increased as a result of the successful start-up of hotel operations at The Squaire at Frankfurt Airport in the segment Investment (Development).

Reported net asset value changed slightly from EUR 4.83 per share on 31 March 2012 to EUR 4.76 per share at end-June 2012.

IVG attributed the earnings decline in Q2 compared to the previous quarter to further losses in the market value of investment property, which widened to -EUR 15.4 mln in the second quarter of 2012 from - EUR 1.7 mln in Q1. Results were also dampened by non-recurring effects on earnings from the disposal of properties in connection with the placement of the IVG EuroSelect 21 Munich funds.

A total of five caverns still under construction will be measured under fair value accounting when sufficiently completed in the second half of the year, therefore contributing to an almost break-even consolidated net result for the year in addition to the further decline in interest expenses, the company said in a statement.

Wolfgang Schäfers, CEO of IVG Immobilien, said: 'By repaying a total of EUR 520 mln in financial liabilities this year alone, IVG is successfully continuing its consolidation. In addition to the group’s ongoing and scheduled debt reduction by a further EUR 800 to EUR 900 mln in the next two years, we will gradually expand our business activities to include new and lucrative asset classes in the fields of real estate and infrastructure, therefore again growing from a stable basis in the medium term. The recently implemented listing of IVG Immobilien Management REIT-AG is just one example of the expansion of the integrated real estate and infrastructure platform.'

IVG Immobilien AG is one of the major real estate and infrastructure companies in Europe and manages assets worth EUR 21.6 bn.