Deutsche Euroshop AG, Germany’s largest shopping-center owner, said second-quarter profit rose 16 percent after the company expanded three of its malls.
Net income climbed to 16 million euros ($20 million), or 31 cents a share, from a restated 13.8 million euros, or 27 cents, a year earlier, the Hamburg-based company said in a statement today. Funds from operations, a measure of a property company’s ability to generate cash, rose 22 percent in the first half to 90 cents a share.
Deutsche Euroshop is benefiting from growing retail sales in Germany, where most of its shopping centers are located. The company increased its rentable space in 2011 by expanding three centers and adding a fourth in the eastern German city of Magdeburg.
The company is seeking building permits to expand three more malls by as much as 20 percent, Chief Executive Officer Claus-Matthias Boege said on a conference call today.
Deutsche Euroshop was down 42 cents, or 1.4 percent, at 30.05 euros at the 5:30 p.m. close in Frankfurt, giving the company a market value of 1.55 billion euros. The shares have gained about 21 percent this year, while the 50-member MDAX stock index for medium-sized companies has risen by 24 percent.
Deutsche Euroshop doesn’t plan to make any more acquisitions soon because prices have become high, Boege said.
Deutsche Euroshop repeated a forecast that FFO for this year will be 1.70 euros to 1.74 euros a share, citing a stable German economy and robust retail sales. That compares with 1.61 euros last year.
German growth slowed less than economists forecast in the second quarter as unemployment at a two-decade low and rising wages bolstered domestic spending. Stores sold an inflation-adjusted 3.8 percent more non-food goods in June than they did a year ago, the government said last month.
The company said it expects to pay a dividend of 1.10 euros a share in 2012, the same amount as in the past two years.
Deutsche Euroshop changed its 2011 earnings after a German court ruled that the company must pay trade tax on its domestic revenue.