Sonae Sierra to focus on Germany and Italy in 2012

Portuguese shopping centre specialist Sonae Sierra said on Friday it will continue its search for investment opportunities in mature markets in 2012 with a focus on Germany and Italy.

The company recorded net profit of EUR 9.7 mln in 2011, up 12% on the year-earlier period, reflecting a 6% increase in direct profit. Sonae Sierra attributed the improvement to increased operational efficiency and its capital recycling strategy, which saw the sale of two shopping centres in Spain and 'significant' funds raised from the intitial public offering of its Brazilian business.

Annual direct income fell 8% to EUR 209.2 mln in 2011 from EUR 226.7 mln in 2010, due to the sale of the Plaza Eboli and El Rosal shopping centres in Spain and the IPO in Brazil. As a result, EBITDA fell 9% to EUR 112.8 mln from EUR 123.4 mln a year earlier. The company's net asset value (according to INREV guidelines) was EUR 1.17 bn at end-2011, down from EUR 1.25 bn a year earlier. The global occupancy of the portfolio was 96.8%, up 0.5% on 2010.

Sonae Sierra currently has five shopping centres under construction, representing a total investment of EUR 522 mln. The company plans to open Le Terraze shopping centre in Italy in 2012, as well as two malls in Brazil (Uberlandia Shopping and Boulevard Londrina Shopping).

The Portuguese retail specialist said its geographic spread across emerging as well as mature markets would help it weather the economic recession in 2012. 'There is no doubt that the economic conditions with particular impact in Portugal, Greece and, to a lesser extent, Spain and Italy, will affect our operational performance in Europe,' said Sonae Sierra's CEO Fernando Guedes de Oliveira. 'However, we are confident that we will continue to show positive results, thanks in part to our geographical spread, which enables us to be present in countries where economic growth is a reality.'

Sonae Sierra established a presence in Morocco and Algeria last year as a service provider to third parties, as well as delivering development services to a client in Croatia. Guedes de Oliveira said the company was 'actively exploring further opportunities in the Mediterranean Basin (Morocco and Algeria) and Colombia.

In total, Sonae Sierra has 49 shopping centres in operation, 28 of which are located outside Portugal, in Spain (9), Italy (4), Greece (1), Germany (3), Romania (1) and Brazil (10).