International Property News

Czech Property - Developer Orco's loss up at CZK 5.2bn in Jan-Sept

19th November 2009

The loss of developer Orco increased to EUR201.2m (about Kc5.2bn) in the first three quarters of 2009, compared to a loss of EUR29.8m (about Kc761m) in the same period a year ago, the company said in a press release Thursday.

The results more or less correspond to expectations of analysts.

Orco's loss widened mainly owing to portfolio revaluation, which the company already disclosed when announcing its first-half results. The firm does not usually make changes to portfolio value in the third quarter.

The value of Orco's real estate fell to EUR1.8bn (about Kc46bn) in the first half of this year, compared to EUR2.1bn (about Kc54bn) a year ago.

Orco's sales amounted to EUR186.8m (about Kc4.8bn)in Jan-Sept, while analysts had expected sales of EUR197.1m (about Kc5bn) on average. In the first three quarters of 2008, Orco generated sales worth EUR225.6m (about Kc5.8bn).

The debt-ridden Orco has been under court protection from creditors since March. In September, a court in Paris extended the protection period by another six months until March 25, 2010. According to the latest available information, Orco's debts amount to around EUR1.6bn (almost Kc50bn).

Orco has been trying to resolve its financial situation through restructuring of its debt, and it has also launched talks with US investment company Colony Capital about a capital investment. Colony Capital's investment is conditioned by a successful debt restructuring.

In September, however, Orco bondholders rejected the management's plan to transform bonds into a new debt and are now waiting for a new offer.

Besides the Czech Republic, Orco is also running business in Germany, Slovakia, Poland, Hungary, Croatia and Russia. Orco shares are traded on stock exchanges in Prague, Warsaw, Budapest and Paris.

The company was established in 1991 by French Jean-Francois Ott, its current CEO. Orco's biggest shareholder is the investment company Prosperita, based in north Moravia, which holds around 5 percent of shares.

Source: Prague Monitor