TAG Immobilien AG back in profit-making territory in the third quarter

TAG Immobilien AG / Quarter Results


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TAG back in profit-making territory in the third quarter

- EBT of EUR 3.0 million recorded in the third quarter of 2009 after four
quarters of losses
- Vacancies successfully reduced, further cut in costs
- Net rental income increased from EUR 24.1 million to EUR 25.7 million
in Q1-Q3 despite extensive sales
- Future personnel costs cut by 30 percent compared with 2008
- No further impairment expense on investment properties expected in the
third and fourth quarters
- TAG resuming its acquisition strategy

(Hamburg, 12 November 2009) TAG made intensive use of the third quarter to
step up its operating business. Thus, residential vacancies were reduced by
over one quarter, accompanied by a drop in vacancy costs. This allowed
additional value to be unlocked from the portfolio. At the same time,
earnings before tax of EUR 3.0 million were achieved after four quarters of
losses. At the same time as strengthening operating business, the Company
systematically optimized cost structures and productivity.

After implementing a number of adjustments in the second quarter in
connection with real estate assets, on the one hand, and discontinued
business, on the other, with the aim of heightening the Company's
transparency, TAG focused in the third quarter on improving its internal
structures, simultaneously enhancing the value of its portfolio.
Accordingly, successful efforts to reduce vacancies last quarter caused
future annual rental cash flows to increase by a net amount of more than
EUR 1 million. At the same time, maintenance costs were lowered
substantially even though a large part of the vacant residences had to be
readied for letting.

The Company's key financials were up in the first nine months of 2009.
Thus, rental income rose from EUR 38.2 million in the first nine months of
2008 to EUR 40.5 million in the period under review. At the same time, net
rental income climbed from EUR 24.2 million to EUR 25.8 million despite the
sale of large parts of the portfolio in the first half of 2009.

Revenues from property sales doubled, rising from EUR 31.0 million in the
first nine months of 2008 to EUR 65.1 million due to the aforementioned
selling activities in the first half of 2009, with total revenues surging
by 50 percent to EUR 106.9 million (EUR 71.9 million in the first nine
months of 2008). TAG achieved EBITDA before fair-value remeasurements and
exceptionals of EUR 17.5 million in the first nine months of 2009, up from
EUR 15.3 million in the same period of 2008. At the EBT level, it recorded
a cumulative loss before fair-value remeasurements and exceptionals of EUR
2.5 million in the first nine months of 2009, down from a loss of EUR 5.9
million in the same period of the previous year.

In addition to the successes in its operating business, TAG also
implemented improvements in its internal structures. In this connection, it
reduced administrative expenses (IT, consulting, third-party services),
implemented a leaner Group structure and simplified information flows and
decision-making processes.

This will result in a reduction in personnel expenses to an annual amount
of just under EUR 7 million, compared with around EUR 10 million for 2008
as a whole.

In addition, TAG is able to boast solid balance sheet ratios across the
entire Group. Thus, the loan-to-value (LTV) ratio, i.e. the ratio of loan
liabilities to the market value of the real estate portfolio, stands at
67.9 percent. No further impairment expense was incurred with the
investment properties. Moreover, the Company assumes that no material
impairments will arise between now and the end of 2009.

TAG well positioned for further growth

What is most important for the TAG Group, however, is the fact that it is
able to finance its operations solely from its rental income in the future:
The rental income is now sufficient to cover all costs and loan obligations
without the need to sell even only a single apartment. This is decisive as
it permits TAG to steer its portfolio safely and unscathed through the
In this way, the Company has been strengthened decisively, allowing it to
make active use of opportunities and chances arising in the market.
To this end, it will be focusing on innovative and creative acquisitions
exhibiting the necessary quality and good locations.

Press inquiries:

TAG Immobilien AG
Investor and Public Relations
Britta Lackenbauer / Dominique Mann
Tel. +49 (0) 40 380 32 300
Fax +49 (0) 40 380 32 390

TAG Immobilien AG
Investor and Public Relations
Britta Lackenbauer / Dominique Mann
Tel. +49 (0) 40 380 32 -386 / -305
Fax +49 (0) 40 380 32 390

12.11.2009 Financial News distributed by DGAP. Media archive at www.dgap-medientreff.de and www.dgap.de


Language: English
Company: TAG Immobilien AG
Steckelhörn 5
20457 Hamburg
Phone: 040 380 32 300
Fax: 040 380 32 390
E-mail: ir@tag-ag.com
Internet: www.tag-ag.com
ISIN: DE0008303504
WKN: 830350
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), München;
Freiverkehr in Berlin, Hannover, Düsseldorf, Hamburg,

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