Renta Corporacion switches tack, gives priority to liquidity

Renta Corporacion has warned that the 'serious liquidity crisis' in the financial markets is having a direct impact on its business. The Spanish property company reported losses of EUR 8.7mln in the first quarter of 2008 as housing demand in Spain fell by 24% year-on-year in February after falling another 27% year-on-year in January, according to the Spanish Statistics Institute, INE. 'The financial conditions affecting possible buyers have a decisive impact on the company's turnover', the company said in a statement. For the financial year 2007, Renta Corporacion posted net income of EUR 35mln.

The company's sales stood at EUR 126mln in the first quarter of 2008, four times higher than in the last quarter of 2007, but still 50% below the same period last year. 'It is precisely because of the current tough conditions that the group has given priority to liquidity over margin, with the aim of adapting its portfolio to the new context', the company added. To this effect, the Barcelona-based firm said it is making 'significant' efforts to reduce its net debt - which fell from EUR 736 mlnat end-2007 to EUR 669mln at the end of the first quarter - as well as to strengthen its financial position. Leverage stood at 76% at the end of March, a slight improvement compared to December 2007 (77%).

Looking ahead, Renta Corporacion said it will give priority to the transformation and sale of buildings, with less emphasis on land and development.