Orco: 3Q08 results below expectations
(Source: KBC Securities/Patria - MORNING CALL 28 November 2008)
Orco: 3Q08 results below expectations (Source: KBC Securities/Patria - MORNING CALL 28 November 2008)
Orco reported its 3Q08 results on Thursday, 27 November.
Net profit after minorities came in at a loss of € 15.7m, versus a profit of € 13.3m in 3Q07, a profit of € 11.3m in 2Q08 and our expectations of € 1.0m profit.
Results are below market expectations (according to Bloomberg consensus).
The company cut its 2008 turnover target from € 343m to € 300m (our
expectations stood at € 329m) mainly on the back of lower commercial
development sales and lower commissions from Endurance Fund, lowered 2009 capex to € 300m (our expectations stood at € 450m), and announced a program for cutting operating expenses by 25%.
Given below estimates results and dimmer outlook for 2009, we see the news as negative.
Total sales came in at € 112.3m, 32.0% higher y/y, 69.8% higher q/q and
32.2% above our expectations. The results were influenced positively by
the development activity where the company continued delivery based on
FPCs signed previously and disposal of Avenue Gardens.
EBITDA (excl. revaluations) came in at € 12.1m, down 0.8% y/y, down
0.5% q/q and 40.5% below our expectations.
Negative influences came from operating expenses above our expectations at staff costs level and other overhead costs while a gain of € 13m net gain of assets disposals contributed positively.
EBIT including revaluation came in at € 13.4m, up 38.1% y/y, down
29.9% q/q and 25.3% below our expectations.
Revaluation gains were not significant in this quarter.
Net financial result came in at € 34.2m loss, 57.3% higher y/y and
94.1% higher than our expectations.
The main difference comes from a € 21m non-cash amortization of repayment premiums and embedded derivatives.
According to management, this is related to an option linked to
the stock price of the company measuring the probability of default.
Excluding this one-off, financial loss would have been 25.1% below our
expectations.
Overview, see:
http://www.postimage.org/image.php?v=Pq24V8oi
Orco Buy
Fair Value 43.90
EPS P/E
FY07 8.1 2.0
FY08E -1.7 n.m.
FY09E 4.7 3.5 | 
