In the same period, the Direct net profit was €57.6 million, an 8% decrease compared to the previous year, while the EBITDA reached €113.5 million, a 2.5% decrease compared to the same period of 2012. These direct net profits are influenced by the sale of assets in 2012 under the Company's capital recycling strategy, particularly Munster Arkaden in Germany and our stake in three non-strategic shopping centres in Brazil. On a like-for-like basis, the Direct net profit and EBITDA remain stable.
According to Sonae’s CEO, Fernando Guedes de Oliveira, “Overall, Sonae Sierra’s business exceeded expectations for 2013. 2013 saw us consistently outperform the retail sales index in most of the European countries where we operate; continue to expand our business through the inauguration of new shopping centres and secure new mandates for our shopping centre professional services business.”
Sonae Sierra’s CEO also noted that “In Europe, we can identify a clear split in terms of the economic conditions across the year. In the first five months of 2013, we saw decline in sales and expansion in yields as forecast. However, from May onwards we witnessed an uplift in consumer confidence and since October we have achieved month-on-month sales growth across the majority of our portfolio, combined with astabilisingof yields, particularly in Portugal and Spain. We feel confident that the momentum will continue to pick up as we move into 2014 and we have built a strong platform to take advantage of market recovery as soon as it materialises. In Brazil our tenants achieved sales growth in excess of 5%, and we managed to show strong growth in rents.”
Occupancy rates, shop sales and footfall
Sonae Sierra’s global portfolio registered an occupancy rate of 94%, a positive performance in a context whereoccupancy rates and sales performance in the retail real estate market in Europe are affected by the impact of the current economic situation. This result demonstrates the quality of the assets and the company’s management of them.
The resilience of the business can also be seen in the relatively contained decline of tenants’ sales in the European portfolio managed by Sonae Sierra, which decreased 1.8% compared to the same period of 2012, still penalized by the austerity climate, especially in Portugal and Spain. However, we highlight this indicator's improvement in the second half of 2013. There are moderate expectations for further improvement during 2014.
In Brazil, we maintain a positive performance with a 5.5% increase in tenant sales (in local currency), compared to the same period of 2012.
Overall, Sonae Sierra’s global portfolio registered a footfall of more than 406 million visits during 2013.
Events of 2013: International growth, service provision and capital recycling
In 2013, Sonae Sierra strengthened its presence in Brazil with two openings. In May, the opening of Boulevard Londrina Shopping, the company's first development in the southern region of Brazil, located in the city of Londrina. The centre has a Gross Leasable Area (GLA) of 48,400 m2, comprising an investment of about €122 million that created more than three thousand direct jobs.
In October, Sonae Sierra opened two new Shopping Centres - Hofgarten Solingen, in Germany, and Passeio das Águas, in Brazil - and announced a new market, Turkey, with the creation of Sierra Reval, a service provision company that offers development, management and leasing services in the shopping centre sector. In Romania, the first steps were taken in the development of Parklake, located in Bucharest with a GLA of 70,000m2, in a joint venture with Caelum Development.
2013 was, moreover, strongly marked by the increase in the provision of services to third parties across Europe, Africa and Asia, with the company having 56 active service contracts by the end of the year, with a total value of €20 million, representing an increase of 30% compared to 2012.
In Portugal, we highlight the investment in the acquisition of 50% of CascaiShopping, the company's first shopping centre built from the greenfield.
Concerning expansions and refurbishments, in Portugal we inaugurated the expansion of AlgarveShopping, a €4.5 million investment that added 3,000 m2 of GLA, enabling the opening of the largest C&A and H&M shops in the Algarve. This strengthened the Centre's commercial supply as well as its quality and asset attractiveness. We also announced and started the investment in the refurbishment of NorteShopping, which will be €5 million, carried out in stages and scheduled to be completed this year.
In 2013, the Company began the expansion and refurbishment of Franca Shopping, in Brazil, which is scheduled to be completed by the end of 2014. This expansion, which represents a €31 million investment, will add around 11,000 m2 of GLA and 68 new shops, for a total of 30,000 m2 of GLA.
The capital recycling strategy adopted by the company, which aims to ensure sustainable growth, continued during 2013, through the sale of three centres owned by Sierra Fund:Parque Principado shopping centre in Spain for €141.5 million and Valecenter and Airone centres in Italy for €144.5 million.
We also highlight the agreement obtained from Sierra Fund investors for the extension of the Fund’s operations until 2018.
Value Metrics
Sonae Sierra calculates its NAV according to the guidelines published in 2007 by the INREV (European Association for Investors in Non-Listed Real Estate Vehicles).
On the basis of this methodology, the Company's NAV (Net Asset Value), as of 31 December 2013, was €1 billion, a decrease of 4.7% compared to the value recorded in December 2012, which is mainly due to the adverse FXchange of theBrazilian Real.
