Homburg Invest Inc. announces second quarter 2009 results



    
     Property revenue and net operating income continue to grow strongly

         Shares issued: Class A - 16,618,819      Class B - 3,148,538
    

    HALIFAX, Aug. 7 /CNW/ - (TSX: HII.A & HII.B and AEX:HII ) - Homburg
Invest Inc. ("Homburg Invest" or the "Company") announced today its financial
results for the second quarter ending June 30, 2009, prepared under both
Canadian Generally Accepted Accounting Principles ("GAAP") and International
Financial Reporting Standards ("IFRS").

    
    IFRS Highlights:

    (Three and six months ended June 30, 2009)

    - Property revenue increased 9.6% to $84.7 million compared to
      $77.3 million for the same quarter last year.
    - Property net operating income (note) ("NOI") for the second quarter was
      $58.7 million, a 3.0% increase over $57.0 million net operating income
      in the same quarter last year.
    - Funds from operations (note) ("FFO"), a non-IFRS measure widely used to
      evaluate real estate performance, was $3.5 million for the second
      quarter, compared to $25.8 million for the same quarter last year. This
      $22.3 million reduction in FFO results from the $24.3 million reduction
      in profit from the development pipeline. Factoring this out, FFO
      increased by $2.0 million quarter over quarter.
    - The Company recorded a $50.1 million non-cash mark-to-market write-down
      of its investment properties for the three months ended June 30, 2009,
      as required under IFRS. Under IFRS, the investment properties must be
      carried at fair value. In the current economic environment, property
      values are decreasing despite stable cash flows as the result of
      increasing capitalization rates. GAAP, the standard which all Canadian
      public real estate entities report under, currently does not adjust to
      fair value, but rather does an impairment test based on non-discounted
      cash flows. The Company had no impairment under GAAP.
    - Shareholders' equity increased from $606.8 million at December 31, 2008
      to $609.3 million at June 30, 2009.
    - Net asset value per share (note) at June 30, 2009, is $29.31.

    GAAP Highlights:

    (Three and six months ended June 30, 2009)

    - Property revenue increased 7% to $82.2 million compared to the second
      quarter ended June 30, 2008. For six months, property revenue increased
      7.3% to $162.3 million.
    - Total revenues for the second quarter were $112.1 million compared to
      $125.6 million in the same quarter last year. The decrease in total
      revenues is mainly due to fewer sales of properties developed for
      resale in the Canadian market.
    - Property net operating income increased 0.5% in the second quarter to
      $56.9 million.
    - Funds from operations, a non-GAAP measure widely used by investors to
      evaluate real estate performance, were $4.8 million compared to
      $28.5 million in the second quarter last year. This $23.7 million
      reduction is the result of $23.9 less profit from the development
      pipeline in the second quarter of 2009. The basic underlying operations
      of the Company therefore generated stable FFO.
    - Shareholders' equity increased from $513.7 million at December 31,
      2008, to $540.7 million at June 30, 2009.

    "Homburg Invest's core investment properties in each of our geographical
markets around the world continued to deliver solid returns. Property revenues
are up in all geographical markets. Net operating income from our investment
properties is also up in most geographical markets" said Richard Homburg,
Chairman and Chief Executive Officer of Homburg Invest. "As should be expected
in difficult economic times, our property development business has slowed and
sales of properties held for development were less robust than this time last
year. Fewer property sales is the principle source of the decline in earnings
and funds from operations, and does not reflect the underlying strength of our
income-generating investment property business."

    Table 1 - Property Revenues and Net Operating Income by Geographical
    Segment

    (IFRS: thousands of CDN$, six months ended June 30)

                                          2009           2008       % Change
                                          ----           ----       --------
    Germany
      Property Revenues                   47.3           40.4
      Net Operating income                44.3           39.8
    The Netherlands
      Property Revenues                   23.0           22.2
      Net Operating income                20.1           20.1
    The Baltics
      Property Revenues                   11.4            9.0
      Net Operating income                 8.1            6.7
    Canada
      Property Revenues                   74.0           72.4
      Net Operating income                36.8           39.7
    United States
      Property Revenues                    9.7            8.1
      Net Operating income                 6.7            5.9
    Total(*)
      Property Revenues                  165.4          152.1            8.7%
      Net Operating income               116.0          112.2            3.3%

    "We have begun the process of reducing our debt and strengthening Homburg
Invest's balance sheet," Mr. Homburg continued. "As real estate and financial
markets improve, we want to be in a strong position to take advantage of new
opportunities. Strengthening our balance sheet is an increasingly important
element of our growth strategy as we come out of the recession and liquidity
crisis."
    Additional financial information is included at the bottom of this news
release.

    About Homburg Invest

    Homburg Invest, with its head office in Halifax, Nova Scotia, owns and
develops a diversified portfolio of quality real estate including office,
retail, industrial and residential apartment and townhouse properties
throughout Canada, the United States and Europe.

    This news release may contain statements which by their nature are forward
looking and express the Company's beliefs, expectations or intentions
regarding future performance, future events or trends. Forward looking
statements are made by the Company in good faith, given management's
expectations or intentions however, they are subject to market conditions,
acquisitions, occupancy rates, capital requirements, sources of funds, expense
levels, operating performance and other matters. Therefore, forward looking
statements contain assumptions which are subject to various factors including:
unknown risks and uncertainties: general economic conditions; local market
factors; performance of other third parties; environmental concerns; and
interest rates, any of which may cause actual results to differ from the
Company's good faith beliefs, expectations or intentions which have been
expressed in or may be implied from this news release. Therefore, forward
looking statements are not guarantees of future performance and are subject to
known and unknown risks. Information and statements in this document, other
than historical information, should be considered forward-looking and reflect
management's current views of future events and financial performance that
involve a number of risks and uncertainties. Factors that could cause actual
results to differ materially include, but are not limited to, the following:
general economic conditions and developments within the real estate industry,
competition and the management of growth. The Toronto Stock Exchange has
neither approved nor disapproved of the information contained herein.

    ADDITIONAL FINANCIAL INFORMATION

    The complete six-month period financial results and MD&A can be viewed and
downloaded from the corporation's web site at www.homburginvest.com.
Additional highlights for the second quarter can be found below.
    The Company prepares it's quarterly and annual statements under both GAAP
and IFRS. This reflects the Board's view that the IFRS presentation most
accurately reflects the financial position of a real estate investment
company, while at the same time the Company continues to comply with
requirements to produce its results under GAAP. This also reflects the
Company's desire to provide its shareholders with as much information as
possible in today's environment of continuing concerns with respect to
financial disclosure in the marketplace.
    The most significant differences between the IFRS and GAAP statements are
that while the IFRS statements reflect the investment properties at fair value
and are without depreciation charges, the GAAP statements record the fixed
assets at historical cost less accumulated depreciation. In addition, deferred
charges relating to leasing fees have been recorded as an asset in the GAAP
financial statements and will be charged to expense over the period of the
related lease. These charges are written off in the period incurred under
IFRS.


    FINANCIAL HIGHLIGHTS - IFRS

    SECOND QUARTER ENDED JUNE 30, 2009

    (000's)

                                    Six Months     Six Months
                                         Ended          Ended
                                       June 30        June 30
                                          2009           2008       Increase

    Property revenue                  $165,357       $152,103            8.7%

    Property net operating income     $115,958       $112,212            3.3%

    Unrealized valuation change       ($51,986)       ($4,011)

    Net earnings (loss)               ($22,658)       $34,563

    Funds from operations              $14,445        $56,084

    Funds from operations per share -
     basic and diluted (note)      $0.73/$0.73    $2.86/$2.79



                                  Three Months   Three Months
                                         Ended          Ended
                                       June 30        June 30
                                          2009           2008       Increase

    Property revenue                   $84,717        $77,290            9.6%

    Net operating income               $58,690        $56,972            3.0%

    Unrealized valuation changes      $(50,137)       $(3,389)

    Net earnings (loss)               $(28,202)       $16,709

    Funds from operations               $3,465        $25,828

    Funds from operations per share -
     basic and diluted             $0.17/$0.17    $1.29/$1.26



    FINANCIAL HIGHLIGHTS - GAAP

    SECOND QUARTER ENDED JUNE 30, 2009

    (000's)
                                    Six Months      Six Months
                                         Ended           Ended
                                       June 30         June 30
                                          2009            2008      Increase

    Property revenue                  $162,264        $151,241           7.3%

    Net operating income              $114,046        $111,350           2.4%

    Net earnings (loss)                $(5,041)        $18,543

    Funds from operations              $18,085         $62,166

    Funds from operations per share -
     basic and diluted             $0.91/$0.91     $3.16/$3.09



                                  Three Months    Three Months
                                         Ended           Ended
                                       June 30         June 30
                                          2009            2008      Increase

    Property revenue                   $82,232         $76,879           7.0%

    Net operating income               $56,851         $56,561           0.5%

    Net earnings                        $3,321          $9,325

    Funds from operations               $4,882         $28,532

    Funds from operations per share -
     basic and diluted             $0.25/$0.24     $1.43/$1.39


    Note

    Non GAAP and Non IFRS Financial Measures

    This news release includes measures widely accepted within the real estate
industry which are not defined under GAAP or IFRS. These measures include
Funds from Operations, Funds from Operations per share, Property Net Operating
Income, and Net Asset Value per share. As these are not defined measures under
GAAP or IFRS, other issuers' may have different calculations from those used
by the Company.

    The Company considers these amounts to be measures of operating and
financial performance.

    a) Funds from Operations ("FFO") and FFO per share are presented by the
       Company as net income (loss) from continuing operations adjusted for
       depreciation and amortization, non-recurring stock based compensation,
       deferred and capital income taxes, unrealized and realized valuation
       changes, gain (loss) on financial instruments and derivatives, and
       unrealized foreign exchange gains(losses); divided by the weighted
       average number of shares outstanding
    b) Property Net operating income ("N0I") is presented by the Company as
       Property Revenue less Property Operating Expenses
    c) Net Asset Value per share is presented by the Company as
       Shareholders' Equity less the priority claim for the equity component
       of Homburg Capital Securities A divided by the number of shares
       outstanding at period end.
    
    %SEDAR: 00013330E




For further information:

For further information: Mr. Richard Homburg, Chairman and CEO, Homburg
Invest Inc., (902) 468-3395; J. Richard Stolle, President and COO, Homburg
Invest Inc., 31-20-573-3855

Organization Profile

Homburg Invest Inc.

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