Nordicom Group's gross profit and pre-tax profit rose 20% and 10% respectively,
which constitutes a satisfying result for H1.
The Group's gross profit amounts to DKK 199.1 m for H1 2008 against DKK 164.8 m
for H1 2007, corresponding to an increase of DKK 34.3 m. This increase is due
to increased revenue from lettings, higher profits from project development and
higher profits from sale of properties. The foreign markets have contributed
with approximately 13% of the group's earnings.
Profits before tax for H1 are DK 84.4 m, which is an increase of DKK 7.3 m from
the previous year (H1 2007: DKK 77.1 m).
Previous announcements indicating expected profits before tax of approx. DKK
300 m is maintained.
The Group generated a positive cash flow of DKK 126.7 m, bringing the Group's
cash holdings at the end of H1 2008 to DKK 234.7 m. This includes free reserves
of DKK 142.2 m. The process of increasing long term debt commenced at the
beginning of 2007 and continued in 2008. At the end of H1 long term debt
comprised DKK 2,721.3 m, which corresponds to a long term debt ratio of 66.8%,
compared with 62.8% at the end of 2007. The main share of the Group's short
term debt is used for financing current projects which will be completed within
a short period of time. Hence the short term debt share is expected to be
further reduced in H2 2008.
The turmoil in the financial markets means greater uncertainty when forecasting
earnings. When focusing solely on Nordicom's internal conditions, our 2009
earnings forecast is still good. In 2009 we expect that profits from sale of
properties, profits from developing projects and the more certain income from
lettings will drive earnings. Assuming 2008 conditions when forecasting profits
from the sale of properties in 2009, we expect to continue to see satisfactory
earnings from the sale of properties. The projects under development which will
contribute to 2009 earnings are looking equally satisfactory. In H2 we expect
to begin new commercial property builds for more than DKK 0.5 bn, which we
expect to be completed in 2009. The projects are already approximately 75%
leased, even before construction has started, and are expected to have a normal
contribution margin.
