Banimmo Drops Most in 7 Years on Profit Warning, No Payout

  • Property developer cites problems with Verviers mall project
  • KBC cuts rating to `hold' from `buy' and lowers target price

Banimmo SA plunged the most in more than seven years after saying its 2015 result would be “significantly negative” and scrapping plans to renew dividend payments due to problems at a shopping-mall project in eastern Belgium.

The Belgian property developer’s shares dropped 8.6 percent to 7.169 euros in Brussels trading, the sharpest decline since Oct. 8, 2008.

Banimmo said late Wednesday that there are “a number of parameters jeopardizing the potential profitability” of its shopping-mall project in Verviers, Belgium. As a result, the 2015 net result “shall be significantly negative so that no dividend will be paid,” the company said in a statement.

The Zaventem, Belgium-based company said it has to depreciate part of a subordinated loan to Urbanove, developer of the Verviers project. KBC Securities estimated the impairment would amount to 10 million euros ($10.9 million) to 15 million euros.

“We significantly cut our rental level expectations of the shopping mall in Verviers,” KBC said in a note to clients. “The uncertainty regarding the potential realization of the Urbanove Verviers project leads us to apply a 10 percent to 15 percent discount to our valuation” of the company, it said.

KBC lowered its rating on Banimmo to “hold” from “buy” and cut its price target for the shares to 7.20 euros from 9.50 euros.

Banimmo also said on Wednesday that it has sold its 50 percent holding in the company Charleroi Tirou Promotion to the group IRET, which holds the other 50 percent. The sale will generate a capital gain of about 2.3 million euros to be booked on Dec. 31, Banimmo said.

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