Reported to the Copenhagen Stock Exchange via Company News Service on 23 May
2007
The Supervisory Board of Keops A/S has today held a Supervisory Board meeting
at which the Group's interim report was considered. The report is enclosed.
Summary:
Interim profit before tax for Keops Group of DKK 200.3 million
In December 2006, Keops adopted a six-point plan for the purpose of increasing
focus and consolidation of the Group. The implementation of the six-point plan
proceeds as planned. Therefore, the main part of the adopted initiatives has
now been performed. Also, the work with the final point of the six-point plan,
the Group's future five-year strategy, proceeds as planned. Management expects
to present the plan later in 2007.
The Group's operating profit for the first half of 2006/07 increased by 38% to
DKK 876.7 million.
The profit before tax for the first half of 2006/07 amounted to DKK 200.3
million compared with DKK 325.4 million in the same period last year as a
consequence of increase in net financial expenses of DKK 367.3 million. The
increase in net financial expenses is primarily attributable to increased
interest-bearing debt attributable to acquisition of new portfolios,
considerable one-time expenses in connection with the financing of such
portfolios as well as exchange losses on SEK.
Asset Management contributes with DKK 316.4 million to the consolidated profit
before tax for the period, which the Supervisory Board considers satisfactory.
The profit is DKK 87.8 million higher than for the corresponding period last
year, as realised gains, value adjustments and profits from the operation of
properties more than equal out considerable one-time expenses in connection
with the establishment of new portfolios, bridge financing, early redemption of
debt and exchange rate fluctuations. No value adjustment has been made of
non-sold investment properties.
Profit before tax of DKK 80.6 million in Investment is more or less at the
level of the same period last year. The Supervisory Board considers the
performance satisfactory.
The financial performance in Development is influenced by lower gains, change
in time of final delivery of projects and thereby change in time of recognition
of profit (due to change in accounting policies) as well as declining results
in M2 A/S. In addition to these are costs relating to the ongoing turn-around
which concerns increased focus in terms of organisation, products and
geographic area. As a consequence of these factors, Keops Development has
realised a loss before tax of DKK 193.3 million, which the Supervisory Board
considers very unsatisfactory. The ongoing turn-around, selective focusing of
the project portfolio and improved pipeline management, including addition of
new projects such as Light*house in Aarhus, however, are expected to improve
the earnings ability of this business area in the coming years and ensure a
satisfactory development.
The planned succession process in Keops Group, which was initiated in the
autumn of 2006, will now be completed at 1 July 2007, when CEO Ole Vagner will
be stepping down from Keops' Executive Board. After this, the Executive Board
will consist of CEO Karsten Poulsen and CFO Michael Rosenvold, while Ole Vagner
will be continuing his day-to-day work in Keops Investment, where he will be
assisting with the acquisition and divestment of properties and mediation of
property investments to wealthy key account investors. Ole Vagner established
the Company in 1989 with the very activities in which Keops Investment operates
today.
As a consequence of lower earnings in Development and unfavourable development
in the exchange rate of SEK towards DKK, the expectations of profit before tax
for the full financial year are adjusted from DKK 450-650 million to DKK
350-450 million. Apart from the realised gains and value adjustments of
investment properties and debt already recognised in the first half of 2006/07,
the expectations include an additional positive value adjustment of investment
properties and debt of DKK 100 million.
Please address questions relating to this Notice to CFO Michael Rosenvold or
Head of Communications Susanne Lindø on tel. +45 3341 0000.
This document in the English language is a translation of the Danish original
document. In the event of inconsistency, the Danish version shall apply.
Conference call
On Wednesday 23 May 2007 at 2:00 PM (CPH time), Keops will be hosting a
conference call for investors and analysts:
Tel.: +45 7026 5045
Conference code: 517 2612#
