Homburg Invest reports 2009 Canadian GAAP financial results

Shares issued: Class A - 17,094,490 Class B - 3,148,538

HALIFAX, March 31 /CNW/ - (TSX: HII.A & HII.B and NYSE Euronext Amsterdam: HII) - Richard Homburg, Chairman and Chief Executive Officer of Homburg Invest Inc. ("Homburg Invest" or the "Company"), is pleased to announce that Homburg Invest has released its financial results for the year ended December 31, 2009 prepared under Canadian Generally Accepted Accounting Principles ("GAAP").

"Despite extremely difficult market conditions in 2009, funds from operations ("FFO") were strong at $46.9 million in 2009, a 18.7% increase over the $39.5 million in 2008, property revenues continued to grow and net operating income ("NOI") was only down marginally," said Richard Homburg, Chairman and Chief Executive Officer of Homburg Invest. "While market conditions in 2009 were such that we had to write down the value of our properties in some markets, the fourth quarter of 2009 was our strongest FFO quarter of the year and improving economic conditions in most markets are stabilizing our yields and rents as we move into 2010."

Financial Results (Year ended December 31, 2009)

Property revenues rose 2.8% to $307.7 million during the twelve months ended December 31, 2009 compared to $299.3 million in 2008. Property revenue in the European portfolio increased 4.3% to $150.6 million during 2009 compared to $144.4 million in 2008. The increase is due mainly to positive movement on the Euro/CAD exchange rate. Canadian property revenue increased slightly to $138.7 million in 2009 compared to $136.9 million during 2008, reflecting the stable base of investment properties, tenants, leasing and occupancy rates over the course of the fiscal year.

Operationally, the occupancy levels remained strong with an overall weighted average occupancy rate of 93% as at December 31, 2009, compared to 97.1% as at December 31, 2008. Weighted average remaining lease term is 7.65 years as at December 31, 2009.

Revenue from the sale of properties developed for resale decreased to $63.9 million for the twelve months ended December 31, 2009 compared to $191.3 million in 2008. The drop in revenue reflects the lower levels of development activity, the softening of real estate prices in the condominium market as a result of slower economic activity and the completion of the construction of the Penn West Plaza project in Calgary, Alberta.

NOI decreased marginally to $207.4 million for the twelve months ended December 31, 2009, compared to $217.2 million for the same period in 2008. Despite the economic slowdown that started in 2008, NOI remained relatively stable during 2009.

Net loss from continuing operations increased to $247.3 million for the twelve months ended December 31, 2009, compared to a net loss of $98.7 million in 2008. The increased loss is primarily due to a $182 million impairment loss on investment properties, compared to no impairment loss in 2008; and to a $49.1 million impairment loss on development properties compared to no impairment loss in 2008. The loss was offset in part by income tax recovery of $45.2 million. The impairment loss on investment properties is primarily on the Nurnburg property in Germany, where the major tenant Karstadt Quelle vacated the property on December 31, 2009. Pursuant to GAAP, the Company was required to write the Nurnburg property down to fair value despite the non-recourse financing of the property and the fact that the Company can produce a substantial gain by returning the property to the lender, a strength of the Company's limited partnership structure.

FFO for the twelve-month period ended December 31, 2009 were $46.9 million compared to $39.5 million for the same period in 2008, representing a 18.7% increase compared to 2008.

Total assets as at December 31, 2009 were $3.4 billion, compared to restated total assets of $4.0 billion as at December 31, 2008. The decrease was due primarily to a $492.9 million reduction in investment properties, due to a strengthening of the Canadian dollar against the Euro and to normal depreciation in assets.

The weighted average fixed interest rate on long term debt increased slightly to 6.00% as at December 31, 2009 from 5.94% as at December 31, 2008.

Net asset value per share was $15.51 as at December 31, 2009.

    
         Key Financial Results for the Year Ended December 31, 2009

                                                  2009                2008
                                                  ----                ----
                                                    (millions of CDN $,
                                                   except per share items)
    -------------------------------------------------------------------------
    Property revenue                             307.7               299.3
    Sale of properties developed for resale       63.9               191.3
    Total revenues and other gains               401.3               495.9
    -------------------------------------------------------------------------
    Net operating income                         207.4               217.2
    Net loss from continuing operations         (247.3)              (97.8)
    Net loss                                    (247.7)              (96.1)
    -------------------------------------------------------------------------
    Funds from operations                         46.9                39.5
    -------------------------------------------------------------------------
    Basic earnings per share                    (12.54)              (4.85)
    Diluted earnings per share                  (12.54)              (4.85)
    Funds from operations per share               2.37                1.99
    -------------------------------------------------------------------------
    For complete financial statements, along with the Management's Discussion
    and Analysis of Results as at and for the year ended December 31, 2009,
    please refer to the Company's website at www.homburginvest.com or
    www.sedar.com.
    

Financial Results: Fourth quarter ending December 31, 2009

In the fourth quarter of 2009, property revenue was $77.3 million compared to $80.2 million in the fourth quarter of 2008. Total revenue was $99 million in the fourth quarter of 2009 compared to $93.2 million in the same quarter of 2008.

FFO in the fourth quarter of 2009 was strong at $16.5 million, up from $10.0 in the same period in 2008.

Long term debt decreased by $275 million in the last quarter of 2009 to $2.64 billion. The reduction was due to foreign exchange rate changes, which decreased from CAD$1.72 : 1 EUR at December 31, 2008 to CAD$1.50 : 1 EUR at December 31, 2009, and to normal principal payments.

The Company expects to release its financial statements prepared in accordance with the International Financial Reporting Standards (IFRS) prior to April 14, 2010.

About Homburg Invest

Homburg Invest Inc. 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. The head office of the Company is located in Halifax, Nova Scotia.

Forward-looking Statements

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, which 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. 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 the information contained herein.

Note

Non-GAAP Financial Measures

This news release includes measures widely accepted within the real estate industry which are not defined under GAAP. 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, 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
       amortization, non-recurring stock based compensation, deferred and
       capital income taxes, gain on sale of investment properties, net
       adjustments to fair value of investment properties, held for trading
       financial assets and derivative financial instruments and net exchange
       differences; divided by the weighted average number of shares
       outstanding.
    b) Property net operating income ("NOI") is presented by the Company as
       property revenue less property operating expenses.
    c) Net asset value per share is presented by the Company as equity
       attributable to shareholders divided by the number of shares
       outstanding at year 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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