International Property News

Analysts: Orco profit up at CZK 3bn in 2007

21st March 2008

Developer group Orco Property Group raised profit by 20 percent to some Kc3bn last year, according to estimates of the company's results.

Orco will announce the results on March 27.

The lower growth in profit was caused mainly by higher costs linked with increased developer activities.

The fall in net asset value (NAV) per share against the first half of last year was caused by lower prices of the group's subsidiaries in Germany.

Karel Potmesil of the firm Cyrrus puts Orco's net profit for 2007 at EUR115.7m (Kc2.9bn).

Ceska sporitelna analyst Petr Bartek expects Orco's profit at EUR100.9m (roughly Kc2.6bn).

The lower profit-to-sales ratio came thanks to higher operating and financial costs linked to the group's intense activities in the last two years. They influenced the company's debts and the level of paid interest.

Bartek expects sale of the company's hotel portfolio, completed last year in November, to have a positive influence on the profit.

Orco puts net value of its assets at EUR104 (Kc2,646) per share. The assets' current market value, not based on the price of shares of Orco's subsidiaries, should move around EUR110 (Kc2,797) per share, Potmesil said. Bartek puts NAV per share only EUR2 lower.

Orco announced some unaudited results on January 30 already. By these figures, sales reached EUR275.2m (Kc7.1bn). Revenues grew by 59 percent against 2006.

Orco Property has been active on the Central European real estate market since 1991. Shares of the Luxembourg-based company are traded on bourses in Prague, Warsaw, Budapest and Paris.

The value of assets managed by the company was estimated at EUR2.5bn (Kc65bn) at end-2007.

Alongside the Czech Republic, the group is also active in Hungary, Poland, Russia, Croatia, Germany and Slovakia.