Homburg Invest Inc. announces third 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, Nov. 16 /CNW/ - (TSX: HII.A & HII.B and AEX:HII ) - Homburg Invest Inc. ("Homburg Invest" or the "Company") announced today its financial results for the third quarter ending September 30, 2009, prepared under both Canadian Generally Accepted Accounting Principles ("GAAP") and International Financial Reporting Standards ("IFRS").

    
    IFRS Highlights:

    (Nine months ended September 30, 2009)

    - Property revenue increased 6.2% to $242.7 million compared to
      $228.6 million for the same period in 2008..
    - Funds from operations (note) ("FFO"), a non-IFRS measure widely used to
      evaluate real estate performance, net of the development pipeline, was
      $34.4 million for the nine month period, compared to $36.1 million for
      the same period last year.
    - The Company recorded a $62.7 million non-cash mark-to-market write-down
      of its investment properties for the nine months ended September 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 of investment
      properties under GAAP.
    - Shareholders' equity decreased from $606.8 million at December 31, 2008
      to $589.3 million at September 30, 2009.
    - Net asset value per share (note) at September 30, 2009, is $28.40.

    GAAP Highlights:

    (Nine months ended September 30, 2009)

    - Property revenue increased 5.0% to $238.4 million compared to
      $227.0 million for the nine month period ended September 30, 2008.
    - Total revenues for the nine month period ended September 30, 2009 were
      $310.2 million compared to $415.9 million in the same period last year.
      The decrease in total revenues is due to $127.8 million less revenue
      from sales of properties developed for resale in the Canadian market.
    - Funds from operations a non-GAAP measure widely used by investors to
      evaluate real estate performance, net of the development pipeline were
      $36.2 million compared to $36.1 million in the same period last year.
      The basic underlying operations of the Company therefore generated
      stable FFO.
    - Shareholders' equity increased from $513.7 million at December 31,
      2008, to $521.3 million at September 30, 2009.
    

"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, and the PennWest Towers in Calgary nearing completion are the principle sources of the decline in earnings and funds from operations, and does not reflect the underlying strength and stability of our income-generating investment property business."

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

    (IFRS: thousands of CDN$, nine months ended September 30)

                                           2009          2008      % Change
                                           ----          ----      --------
    Germany
      Property Revenues                    69.0          61.0
      Net Operating income                 65.4          60.0
    The Netherlands
      Property Revenues                    33.0          33.4
      Net Operating income                 28.6          29.9
    The Baltics
      Property Revenues                    16.8          14.3
      Net Operating income                 11.7          10.5
    Canada
      Property Revenues                   110.0         107.7
      Net Operating income                 55.1          58.7
    United States
      Property Revenues                    14.0          12.2
      Net Operating income                  9.8           8.8
    Total*
      Property Revenues                   242.7         228.6           6.2%
      Net Operating income                170.6         168.0           1.5%
    

"We are in the process of reducing our debt and strengthening Homburg Invest's balance sheet through the sale of selected assets," Mr. Homburg continued. "As real estate and financial markets improve, we want to be in a strong position to take advantage of new opportunities, and we are optimistic about the future. Strengthening our balance sheet and reducing our debt levels is a key element of our strategy as the world comes 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 nine-month period financial results and MD&A can be viewed and downloaded from the corporation's web site at www.homburg.com. Additional highlights for the third quarter can be found below.

The Company prepares its 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

    THIRD QUARTER ENDED SEPTEMBER 30, 2009

    (000's)
                                    Nine Months   Nine Months
                                          Ended         Ended
                                   September 30  September 30
                                           2009          2008      Increase

    Property revenue                   $242,685      $228,572           6.2%

    Property net operating income      $170,624      $167,969           1.6%

    Net adjustment for fair value
     of investment properties          ($62,719)     ($29,414)

    Net earnings (loss)                ($39,260)      $25,412

    Funds from operations
     net of development pipeline        $34,423       $36,072

    Funds from operations per
     share -
     basic and diluted (note)       $1.73/$1.73   $1.83/$1.78


                                   Three Months  Three Months
                                          Ended         Ended
                                   September 30  September 30
                                           2009          2008      Increase

    Property revenue                    $77,328       $76,469           1.1%

    Net operating income                $54,666       $55,757          (2.0%)

    Unrealized valuation changes       ($10,733)     ($25,403)

    Net earnings (loss)                ($16,604)      ($9,151)

    Funds from operations, net
     of development pipeline            $11,317       $10,081

    Funds from operations per share
     - net of development pipeline
     basic and diluted              $0.57/$0.57   $0.50/$0.50



    FINANCIAL HIGHLIGHTS - GAAP

    THIRD QUARTER ENDED SEPTEMBER 30, 2009

    (000's)
                                    Nine Months   Nine Months
                                          Ended         Ended
                                   September 30  September 30
                                           2009          2008      Increase

    Property revenue                   $238,395      $226,981           5.0%

    Net operating income               $167,734      $166,378           0.8%

    Net earnings (loss)                ($25,693)      $22,850

    Funds from operations, net of
     development pipeline               $36,177       $36,074

    Funds from operations per share
     - net of development pipeline
     basic and diluted              $1.82/$1.82   $1.83/$1.78


                                   Three Months  Three Months
                                          Ended         Ended
                                   September 30  September 30
                                           2009          2008      Increase

    Property revenue                    $76,131       $75,740           0.5%

    Net operating income                $53,688       $55,028          (2.4%)

    Net earnings (loss)                ($20,922)       $4,307

    Funds from operations, net of
     development pipeline               $11,893       $10,079

    Funds from operations per share
     - net of development pipeline
     basic and diluted              $0.60/$0.60   $0.50/$0.49
    

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

SOURCE Homburg Invest Inc.

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

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Homburg Invest Inc.

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