Fonciere des Regions SA, France’s second-largest publicly traded office landlord, said full-year earnings before items rose 3.7 percent as its Italian unit qualified for tax exemptions and borrowing costs fell.
Earnings excluding changes in property values and one-time items, known as recurring profit, rose to 288.1 million euros ($382 million), or 5.23 euros a share, the Metz-based company known as FDR said today in a statement. That compared with 277.8 million euros, or 5.33 euros a share a year earlier.
Analysts expected earnings of 5.22 euros a share, the average of 13 estimates in a Bloomberg survey. Chief Executive Officer Christophe Kullmann plans to use the proceeds from divestments to cut debt and invest in a 1 billion-euro development program.
“We beat our targets for 2011,” Kullmann said in the statement. He predicted a “slight” gain in recurring profit this year.
FDR shares declined 40 cents to 54 euros in Paris. The shares climbed 25 percent in the three months through yesterday. That compares with a gain of 16 percent for the French REITs index compiled by Amsterdam-based Global Property Research.
Tax fell by 18.8 million euros as Beni Stabili SpA (BNS), the Italian office owner that FDR controls, qualified for exemptions as an Italian real estate investment trust. Borrowing costs declined by 5 percent after a loan was refinanced.
FDR raised 611 million euros from the sale of properties last year. The proceeds cut net debt to 49.3 percent of the value of FDR’s real estate from 50.4 percent a year earlier.
Net rental income declined 3.7 percent following asset sales. Income generated by properties owned through last year advanced 2.2 percent, the company said.
Net asset value rose 2.8 percent to 83.1 euros a share. Net income (FDR) totaled 349.5 million euros compared with 627.2 million euros a year earlier. The company said it will pay a dividend of 4.2 euros a share, which investors may receive in stock.
FDR controls real estate in France, Italy and Germany through its holdings in other REITs.
Other FDR assets include stakes in Fonciere des Murs SA, a REIT specialized in sale and leasebacks; warehouse owner Fonciere Europe Logistique SCA (FEL); and Fonciere Developpement Logements SA (FDL), a residential investment trust. FDR also has a 9.3 percent holding in Altarea SA (ALTA), France’s biggest out-of-town big box retail-park developer, and controls parking lot owner Parcs GFR.