Orco’s 9M05 net income came 10.5% below our estimate of EUR 22.8m. Market consensus was not available. Also, 9M04 figures, under IFRS, except for sales are also not available. The main difference in our estimates vs. the actual numbers are seen in lower than expected revenues from development; nevertheless, Orco’s management told us that most 2005 flats will be sold in QIV-05, and in 2006 and 2007. Therefore, we are confident that Orco’s target of EUR 63m of sales for the FY2005 will be achieved. Also, there was lower than expected profit from re-valuation, which is, however, very difficult to forecast. Suncani Hvar contributed nearly 50% to the profit from revaluation. Orco estimates its current NAV to stand at EUR 42 per share, implying a P/NAV of 1.37; however, Orco’s NAV should increase by the end of the year due to acquisitions realised in the QIV-2005.
In 000s EUR, IFRS 9M2005A 9M2004A % change 9M2005E
Sales 36,128 57,592 -25.8% 42,746
Profit from revaluation 27,256 - - 34,558
EBIT 25,070 - - 35,699
EBIT margin 69.4% - - 83.5%
Pre-tax profit 23,034 - - 31,690
Net Income 20,426 - - 22,817