Groupe Affine has reported a current profit of EUR16.7m for 2009, an increase of 89.4 per cent from the previous year.

This gain was attributable to the marked improvement in financial income (+12.1 per cent), which was driven by the fall in interest rates beginning in the summer of 2008 and a reduction in debt levels, a significant drop in operating expenses (-4.8 per cent), and repayment of a tax carry-back (EUR5.1m).

Despite continuing growth in rents (+5.1 per cent), rental revenues were slightly lower (-1.1 per cent) in 2009 due to highest marketing fees. The group also continued to record reductions in the contribution from lease financing activities (EUR3.8m vs. EUR5.9m) and posted a near-zero margin for development transactions (vs. EUR2.2m in 2008). Consequently, operating margin was down 7.6 per cent.

The financial vacancy rate (excluding Banimmo and buildings under renovation) was 7.9 per cent as at 31 December 2009, up from year-end 2008 (6.0 per cent), reflecting the group’s expectations given the current economic conditions.

An aggressive policy of property disposals (EUR163m, of which EUR117m for Banimmo) resulted in the recognition of capital gains that were 3.6 times greater than the prior year, bringing current income after disposals to EUR41.5m, up 163.0 per cent.

Despite the additional negative impact of the change in fair value of buildings (-EUR43.7m) and financial instruments (-EUR7.6m), net profit improved strongly (-EUR2.7m versus -EUR37.3m in 2008).

Strengthened by this strong improvement in current profit, the group’s cash flow (excluding the cost of debt and income taxes) rose 8.6 per cent to EUR54.3m.

The fair value of the property portfolio was EUR1.089bn (transfer taxes included), down 4.6 per cent compared to year-end 2008, resulting primarily from the change in fair value on a like-for-like basis (-4.9 per cent) in the first half. The significant disposals were to a large extent offset by EUR130.8m in investments.

As a result, net asset value (excluding transfer taxes), after deducting quasi-equity, fell EUR39.5m (-14.1 per cent) compared to year-end 2008, and reached an amount of EUR241.1m at year-¬end 2009, or EUR29.7 per share.

Despite a 25 per cent increase in 2009, Affine shares (at EUR16.25) were still priced at a 45.3 per cent discount as at 31 December. Transfer taxes included, NAV per share was EUR35.9.

As at 31 December 2009, the group’s net financial debt was EUR693m (versus EUR754m at year¬end 2008) and represented 1.7 times equity. For rental property activities, the LTV ratio was 58.1 per cent (versus 56.6 per cent at year-end 2008), due to the decline in value of the buildings and despite the significant reduction in financial debt.