Azrieli Group Ltd. Announces Second Quarter 2011 Results; Reports a 9% Increase in NOI and a 6% Increase in FFO From Real Estate Activity for the Second Quarter 2011
Highlights for the Second Quarter[1]
Acquisitions, Development and Redevelopment Activities
Management Review
Shlomo Sherf, Azrieli Group's CEO: "The strong results in the Group's core business attest to a well-formed and stable business model as well as to a highly experienced and professional management team. During the report period, the Company realized significant business opportunities which supported the group's growth strategy. We intend to continue making wise use of the cash reserves and building additional future growth engines for the Group".
Balance Sheet[3]
Core Business Operations
Second quarter 2011 malls and shopping center segment and offices and others segment operating results:
Shopping Center Portfolio
The increase in the shopping center segment same-property NOI of 5% over the same period in 2010 is in continuation to the 7% increase in that parameter in Q1/2011 and a 7% increase in 2010.
Office Space and Others Portfolio
The increase in offices and others segment same-property NOI of 6% over the same period in 2010 is in continuation to the 6% increase in that parameter in Q1/2011 and a 3% increase in 2010.
Non-Core Operations
Granite (approx. 60% holding) - Profit of approx. NIS 0.1 million in Q2/2011 compared to NIS 2.5 million loss in Q2/2010 (attributed to the shareholders). Revenues increased, and profit improved in most of the segments (particularly Sonol, Tambour and GES).
Bank Leumi (approx. 4.8% holding) - In Q2/2011, the share value on TASE decreased by 10%, dividend-adjusted price (decrease in the Group's holding value of NIS 128 million). Bank Leumi distributed a dividend of NIS 400 million in June 2011 (Group's share, NIS 19.2 million).
Leumi Card (20% holding) - The company has not yet released its financial statements.
2011 Guidance
The Company remains committed to its core business objectives:
Conference Call
The Company will hold its quarterly conference call, hosted by Mr. Shlomo Sherf, CEO and Mr. Yuval Bronstein, CFO, on Wednesday, August 24, 2011 at 16:00 Israel local time (15:00 CET; 14:00 London time and 09:00AMNew York time). The call will include a review of the Company's Q2/2011 performance as well as a discussion of the Company's strategy and expectations for the future. A Question & Answer session will follow the discussion.
To participate, please dial 03-9180650 from Israel, 1-888-668-9141 from the US, 0-800-917-5108 from the UK, 0-800-022-9568 from the Netherlands and 972-3-9180650 internationally.
A replay will be available for 3 days by dialing 03-9255930 from Israel, 1-888-782-4291 from the US & Canada, 0-800-028-6837 from the UK, 0-800-023-4246 from the Netherlands and 972-3-9255930 internationally.
Access to the presentation will be available through the Company's website at http://www.azrieli.com under "Investor Relations > Presentations."
For Additional Information
A full copy of the Company's financial statements is available on Azrieli Group's website at http://www.azrieli.com, in the IR (Investor Relations) section. To be included in the Company's e-mail distributions for press releases, news and other Company notices, please send e-mail addresses to Mr. Moran Goder, Head of Investor Relations, at [email protected], Tel.: +972-3-6081310.
About Azrieli Group
Azrieli Group Ltd. owns and operates Israel's largest portfolio of malls & shopping centers and office space nationwide. The Group is publicly traded on TASE under the symbol AZRG IT, is included in the TA-25 and TA-real-estate 15 indices, and is the only Israeli stock included in the EPRA Index. As of June 30, 2011, the Company has an equity market capitalization of about $3.3 billion. The Group operates mainly in Israel, owns and manages properties with a gross leasable area of 657,000 square meters; As of June 30, 2011, the Company owned interests in 11 shopping centers comprising 230,000 square meters of leasable space across Israel, 8 office properties comprising 280,000 square meters of leasable space across Israel and 5 properties overseas (mainly in Houston, Texas) comprising 147,000 square meters of leasable space. In addition, the Group has 9 projects under development comprising 355,000 square meters of leasable space in Israel. 93% of the fair value of investment properties and properties under development relates to properties in Israel. The Group has a consolidated total asset value of approx. $3.8 million and an annualized NOI of approx. $276 million. The Company has specialized in shopping center and office space development, acquisition, and management for 27 years. For further information, visit the Company's web site at http://www.azrieli.com .
Accounting and Other Disclaimers
The Company believes that publication of the FFO, which is calculated according to EPRA best-practice recommendations, better reflects the operating results of the Company, since the Company's financial statements are prepared in conformity with IFRS. In addition, publication of the FFO provides a better basis for the comparison of the Company's operating results between different reporting periods and strengthens the uniformity and the comparability of this financial measure to that published by European real estate companies.
As clarified in the EPRA and NAREIT position papers, the FFO measures do not represent cash flows from current operations according to accepted accounting principles, nor do they reflect the cash held by a company or its ability to distribute that cash, and they are not a substitute for the reported net income (loss). Furthermore, it is also clarified that these measures are not part of the data audited by the Company's independent auditors.
Forward Looking Statements
This press release may contain forward-looking statements relating to Azrieli Group's operations and the environment in which it operates that are based on Azrieli Group's expectations, estimates, forecasts and projections. These statements may be identified by their use of forward-looking terminology such as "believes", "expects", "may", "should", "would", "will", "intends", "plans", "estimates", "anticipates" and similar words. These statements are not guarantees of future performance and involve risks and uncertainties that are impossible to control or predict. Actual outcomes and results may differ materially from those expressed or implied in these forward-looking statements. We refer you to our latest annual report and current interim financial statements, both of which are available on Azrieli Group's website, for a discussion of the risks and uncertainties associated with forward-looking statements. You therefore should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements speak only as of the date on which such statements are made. Except as required by laws and regulations, Azrieli Group undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.
The Company refers you to the documents filed by the Company from time to time with the Israel Securities Authority, specifically the section titled "Risk Factors" in the Company's Annual Report for the year ended December 31, 2010, as may be updated or supplemented in the Company's immediate filings, which discuss these and other factors that could adversely affect the Company's results.
Please note that this document should not be regarded as a substitute for reading the original Hebrew version of the Company's reports in full. The full and legal version of the Company's reports, in Hebrew, was released by the Company on August 24th, 2011 and may be inspected on the Israeli MAGNA website at http://www.magna.isa.gov.il.
1. Based on the 30.06.2011 extended standalone financial statements.
2. For further details on the method of calculation and the assumptions, see Sections 1.1.4 and 1.1.5 of the board of directors' report as of June 30, 2011. Funds from operations (FFO) are a widely accepted supplemental measure of the performance of income-producing real estate companies and REITs.
3. Based on the 30.06.2011 extended standalone financial statements.
Contact Info
Moran Goder
Head of Investor Relations
Azrieli Group.
Office: +972-3-6081310
[email protected]
