IVG swings back to profit in H1 2010

Bonn-based IVG Immobilien swung back to profit in the first half of 2010 with operational results boosted by proceeds from project sales in the development segment. IVG, Germany's largest listed real estate company, said it booked a net profit of EUR 28 mln in the first six months of 2010, compared to a loss of EUR 99 mln in the same period a year before. On a quarterly basis, IVG's net profit rose to EUR 18 mln in Q2 2010, from EUR 10 mln in Q1.

Earnings before interest and tax (EBIT) increased to EUR 156 mln in H1 2010, a four-fold increase on the EUR 37 mln recorded in H1 2009. On a quarter-on-quarter basis, IVG's operational result grew from EUR 72 mln in Q1 2010 to EUR 84 mln in Q2.

IVG's Net Asset Value (NAV) per share showed a positive quarter-on-quarter development for the first time in nine quarters, the company said, with NAV amounting to EUR 6.88 at end-June 2010. IVG's loan-to-value ratio remained virtually stable at around 69%.

'The once again positive result in 2Q 2010 is encouraging and shows that IVG is on the right path. However, this result cannot be extrapolated over the year as a whole on straight-line basis as markets are still characterised by uncertainty,' said Chief Executive Gerhard Niesslein. 'Nonetheless, we stick to our forecast for a positive consolidated net profit for the year as a whole.' Looking forward, Niesslein said that in the second half of the year IVG will 'further improve its cost position and processes and generate growth with its business model of an integrated investment platform and the co-investment approach'.

Amid a recovering economy, the company launched in early July the repositioning of its biggest development project at Frankfurt airport with the name change from Airrail to The Squaire. The building will gradually start opening from October 2010 onwards and currently shows a pre-letting rate of around 60%.