HALIFAX, Feb. 15 /CNW/ - Homburg Invest Inc. ("Homburg Invest" or the
"Company") (TSX: HII.A & HII.B; AEX: HII ) reported today its financial
results for the fourth quarter and year ended December 31, 2007. (All dollar
amounts are expressed in Canadian currency.)
"2007 was a year of strategic activity that led to extraordinary growth
in earnings for Homburg Invest," said Mr. Richard Homburg, Chairman and CEO.
"Our landmark acquisitions of Alexis Nihon REIT and the Central Station
Complex in Montreal are just two of many transactions during 2007 that
contributed to our strong growth in assets, revenues, earnings, and funds from
operations. These significant transactions, along with our acquisitions in the
Baltic states and the Netherlands in Europe, and in the Eastern United States,
further enhance an internationally diversified, balanced portfolio that
continues to demonstrate our ability to create significant value for our
Key Financial Results for the full year ended December 31, 2007
(Homburg Invest Inc. prepares its financial results under both Canadian
Generally Accepted Accounting Principles (CDN GAAP) and International
Financial Reporting Standards (IFRS)).
IFRS CDN GAAP
Year ended December 31, 2007
2007 2006 2007 2006
---- ---- ---- ----
Thousands of CDN $, except per share items
Total revenue $486,259 $253,094 $465,935 $176,869
Net earnings from
continuing operations $142,654 $94,766 $81,327 $22,962
Net earnings $140,495 $94,766 $79,168 $22,962
Funds from operations
(note) $98,718 $39,237 $127,399 $39,237
Basic earnings per share $0.92 $0.92 $0.52 $0.22
Diluted earnings per share $0.88 $0.86 $0.49 $0.21
Funds from operations per
share (note) $0.65 $0.38 $0.84 $0.38
Revenues under IFRS for the year ended December 31, 2007, were
$486.3 million, a 92% increase over revenues of $253.1 million in 2006. The
increase in revenue was driven by an 81% increase in property revenues, to
$211.0 million, and a 315% increase in sales of properties held for resale.
This strong increase in revenues is a result of significant growth in property
assets, starting in mid 2006; the acquisition of the Alexis Nihon REIT in the
first six months of 2007; the recent acquisition of the Central Station
Complex in Montreal; the acquisition of a portfolio of properties in the
Baltic states of Estonia and Lithuania; the acquisition of the Cedar Shopping
Centers portfolio in the United States; and increased sales from our
Canadian GAAP net earnings for the year ended December 31, 2007, rose 245%
to $79.2 million, or $0.49 per diluted share, compared to net earnings of $23
million or $0.21 per diluted share the previous year. For the same period,
IFRS net earnings rose 48.3% to $140.5 million, or $0.88 per diluted share.
For the three-month period ended December 31, 2007, GAAP net earnings were
$64.0 million, or $0.34 per diluted share, a substantial increase over net
earnings of $5.5 million or $0.04 per diluted share in 2006. IFRS net earnings
for the quarter rose 41% to $73.5 million, or $0.46 per diluted share.
Funds from Operations ("FFO"-note) using CDN GAAP increased to
$127.4 million for the year ended December 31, 2007, from $39.2 million last
year. For the three months ended December 31, 2007, Funds from Operations were
$86.8 million compared to $12.5 million in the same quarter last year. The
increase was driven primarily by the Company's steady portfolio growth and its
development pipeline producing sales.
The Company's acquisition and management strategy has created a strong
portfolio that has a net asset value ("NAV"-note) under IFRS of $4.78 at
December 31, 2007. This NAV does not reflect the inherent values in the
Company's development pipeline, or remaining profit from the sale of Homburg
Harris to be recognized under the percentage of completion accounting method
in 2008 and 2009. Management's opinion is that these items will add
significantly to the existing NAV.
"We achieved solid financial and operating performance in 2007," said
Mr. Homburg. "As a result of our growing asset base, increasing at
December 31, 2007, to approximately $3.5 billion (approximately $3.8 billion
under IFRS) from $2.2 billion ($2.4 billion under IFRS) and our successful
track record, we are increasingly recognized in both North America and Europe
as a partner of choice with a reputation for managing and developing major
urban properties. We are blessed with a strong management team, strong
financial capability, and a reputation that attracts an increasing flow of
potentially attractive transactions."
Fourth Quarter 2007 Transactions Drive Value
Following on the closing in April 2007 of the $1-billion Alexis Nihon REIT
transaction, the subsequent sale of that REIT's industrial and suburban office
portfolio for $592 million in June of 2007, and the Company's $219 million
Class A share issue in July, Homburg was in a strong financial position to
continue to aggressively pursue its growth strategy through the remainder of
During the fourth quarter ended December 31, 2007, Homburg Invest
initiated and or completed several accretive transactions that are expected to
provide significant long term growth.
On November 16, 2007, Homburg Invest announced that it had entered into a
joint venture with a large German pension fund, for the sale to the fund of
the Homburg Harris Centre in Calgary for $376 million. Under the joint venture
agreement, Homburg Invest acquired a 10% interest in the property holding
On November 30, Homburg Invest closed the acquisition of the CN Central
Station Complex for $355 million under a sale-and-leaseback arrangement with
Canadian National Railway ("CN".) Under the agreement, CN leased back its
17-story office tower and the Central Station railway passenger facilities on
a long-term basis.
On December 10, 2007, Homburg announced its arrangement with Cedar
Shopping Centers Inc., ("Cedar") through which Homburg acquired an
80% interest in a joint venture with Cedar to own and operate eight shopping
centres in Pennsylvania and one property in Massachusetts. The properties,
which are managed by Cedar, were purchased for US $170 million.
Finally, on December 21, 2007, Homburg finalized the acquisition of
37 properties in the Baltic states of Estonia and Lithuania from SEB Group.
Twenty-two of the properties are occupied by SEB under long-term leases and
15 properties are primarily leased to other tenants or have short-term leases.
The transaction was completed at an aggregate purchase price of approximately
With the closing of these transactions in the fourth quarter, along with
acquisitions and disposals made earlier in 2007, Homburg Invest has added
approximately $1.4 billion under IFRS in additional assets to its balance
sheet since January 1, 2007, driving both higher revenues and increased funds
from operations going into 2008 and beyond.
Mr. Homburg concluded: "All of the transactions we completed in the fourth
quarter, and indeed throughout 2007, demonstrate our commitment to a strategy
of geographic and sector diversification. We build value in many of these
transactions by negotiating sale-and-leaseback transactions with solid
partners in order to provide stable, long-term cash flows. The combination of
these elements into one strategy provides us with a unique business model that
investors can count on to create value and new growth opportunities on a
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.
Non GAAP and Non IFRS Financial Measures
This news release includes measures widely accepted within the real
estate industry which are not defined under CDN GAAP or IFRS. These
measures include Funds from Operations, Funds from Operations per share,
Net Asset Value, and Net Asset Value per share. As these are not defined
measures under CDN 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
a) Funds from Operations ("FFO") and FFO per share are presented by the
Company as net income (loss) from continuing operations adjusted for
amortization, stock based compensation, deferred and capital income
taxes, unrealized and realized valuation changes, and unrealized
foreign exchange gains; divided by the weighted average number of
b) Net Asset Value ("NAV") and NAV per share are presented by the Company
as total assets less total liabilities, or effectively shareholders'
equity, divided by the year end number of shares outstanding.
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