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Icade First-Half Earnings Rise as French Home Sales Surge

Icade (ICAD) SA, the commercial property arm of France’s Caisse des Depots et Consignations, said profit excluding items rose 23 percent in the first half on higher sales at its homebuilding unit.

Earnings excluding disposal proceeds and other one-time items, known as net current cash flow, rose to 100.3 million euros ($145 million), or 1.94 euros a share, the Paris-based company said today in a statement. A year earlier, Icade earned 81.8 million euros, or 1.62 euros a share.

In February, Chief Executive Officer Serge Grzybowski predicted “strong growth” in net current cash flow in 2011 as Icade delivered homes and apartments it pre-sold in 2010. Sales at Icade’s property-development arm rose almost 20 percent, led by its residential unit as low borrowing costs, tax breaks on rental property investment and government subsidies to encourage first-time buyers lifted demand.

Buoyant new-home sales and income from its investment properties following October’s purchase of Cie. La Lucette mean Icade “can look forward calmly to the future,” it said in the statement. It forecast “strong” growth in net current cash flow in 2012.

Icade fell 17 cents to 83.32 euros in Paris trading. The shares advanced 5.6 percent in the six months through yesterday, lagging behind the 14 percent gain for an index of French REITs compiled by Amsterdam-based Global Property Research.

Residential Development

Revenue rose 10 percent to 717.2 million euros as a result of sales growth at Icade’s residential-development arm. Homes sold by the unit in the first six months generated 349 million euros, a 32 percent increase from a year earlier. Pre-sales amounted to 423 million euros at the end of June and the company said it has the capacity to build more homes representing 1.4 billion euros in potential revenue.

Icade’s purchase of Cie. La Lucette repositioned the company as an owner and developer of more profitable commercial real estate. Grzybowski sold 2 billion euros of residential assets and disposed of peripheral property management businesses.

Revenue from Icade’s various property investment arms fell 16 percent to 179 million euros, reflecting last year’s sale of 23,000 low-income homes. There was a 3.5 percent increase in rental income generated by Icade’s offices, clinics and business parks before acquisitions and new building openings.

Affordable Housing

Net income fell to 48.4 million euros, or 94 cents a share, from 906.2 million euros, or 17.89 euros a share, a year earlier. Last year’s profit included 902 million euros in proceeds from asset sales, mainly Icade’s affordable housing assets.

Net asset value rose 3.1 percent from Dec. 31 to 83.9 euros a share. Icade doesn’t include changes to the valuation of its properties in its income, and it books a profit or loss only when it sells a building.

State-owned Caisse des Depots et Consignations, France’s largest financial institution, owns about 56 percent of Icade shares.

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To contact the editor responsible for this story: Andrew Blackman at

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