Operations yields strong and improved cash flow, but fair value adjustments to property portfolio and financial derivatives has significant impact on results.
 
Oslo, February 12, 2009: Norwegian Property (OSE:NPRO, NPRO.OL) reports steady operational performance and solid cash flow. Profit before value adjustments were NOK 100 million for the fourth quarter of 2008.
 
In a comment, CEO Petter Jansen said "We are pleased to report strong operational results and improved cash flow in the fourth quarter. In light of the significant accounting implication of the present economic climate, we remain committed to strengthening the company's financial position and maintaining a low-risk and predictable cash flow."
 
Rental income was NOK 466.0 million in the fourth quarter of 2008 (NOK 450.2 million[1]). Operating profit before fair value adjustments was NOK 389.2 million (NOK 382.1 million), and up NOK 547 million year on year, reflecting the stable operation of properties secured by long term leases. Result before tax, reflecting fair value adjustments, was minus NOK 2,508.2 million in the quarter (NOK 111.4 million) and negative by NOK 5,119 million for the full year (NOK 1,651 million).
 
In order to hedge the development in interest costs and valuation of properties, Norwegian Property has implemented a high degree of interest hedging for corporate debt. This has secured interest cost expenses for 2009 below the 2008 level. Falling interest rates has given reduced market values of financial derivative instruments, giving a negative adjustment of NOK 1,166.4 million in the fourth quarter (NOK 45.5 million). Total market value of financial derivatives was negative with NOK 631.3 million by 31 December 2008.
 
Total market value for the property portfolio (before tax adjustments) is reduced to NOK 27,574 million, compared with NOK 27,743 at the end of the third quarter, implying a net yield for the office portfolio of 6.4% and 7.0% for the hotel portfolio. In 2008 an additional valuation is done in order to ensure a fair and independent valuation of assets. The negative effect of property value adjustments in the result statement was minus NOK 1,175.3 million in the fourth quarter, and gave a reduction of NOK 3,987.5 million for the full year.
 
Equity per share is calculated at NOK 24.80, and adjusted Net Asset Value based on EPRA-standard is NOK 30.14 per share by 31 December 2008.
 
The group is in compliance with all financial covenants in various loan agreements as of 31 December.
 
Norwegian Property has an objective to strengthen the financial position and to improve its long term loan to value position from current levels. In 2008 Norwegian Property sold eight properties amounting to a total of NOK 2,120 million.
 
An extraordinary general meeting, elected on 19 December 2008 a new Board of Directors, chaired by Tormod Hermansen and with Harald Grimsrud, Synne Syrrist, Gry Mølleskog and Nils K. Selte as board members.
 
In the light of the current financial situation, the board of directors has decided not to propose any dividend payout for the year 2008.
 
 
To download the preliminary financial report and the presentation material for the fourth quarter 2008, please see www.npro.no.


For additional information please contact:
CEO,  Petter Jansen, mobile +47 900 98 728
CFO, Svein Hov Skjelle, mobile +47 930 55 566
IRO, Truls Birkeland, mobile +47 410 46 209
 





[1] Figures in brackets refer to the same period one year before