OSLO-Re-structuring locally based listed hotels and commercial real estate investor Norwegian Property posted profit before tax of NOK251 million (€30 million) for third quarter, turning round a loss of NOK1.37 billion (€163 million) in 3Q08. Portfolio value adjustments were almost flat.

"We are pleased to present a result representing a considerable improvement," said acting CEO Mari Thjømøe. "Stable income, good operations and reduced financial costs gives increased financial flexibility… Through restructuring and repayment of debt, the company has obtained a more solid financial position." Gross rental income in 3Q09 reached NOK445 million (€53 million), adjusted for sale of properties, an increase of 1.4% from Q3 2008.

Operating profit before fair value adjustments was NOK363 million (€43 million), down slightly. NPRO strengthened its financial platform through a private placement of NOK1.2 billion (€143 million) and subsequent 'repair' offering of NOK300m (€36 million), using proceeds for debt repayment.

NPRO has been in disarray due to the financial crisis and an excessive debt load taken on two years ago to purchase Norgani Hotels. Its banks have been supporting the group and have accepted equity swaps during extensive refunding which included the capital increase, partly funded by founding shareholders. Founding CEO Peter Hansen left in early autumn and Thjømøe is filling in while a new company head is sought by the re-constituted board. In 3Q09, NPRO repaid NOK1.5bn (€179 million) in debt, and boosted equity by NOK1.6bn (€191 million).

Turnover in the NPRO share reached record levels during the quarter, Thjømøe said, and the number of shareholders has risen – with the proportion of non-Norwegians reaching a high of 34.4% at end-Q3 2009. Thjømøe said the portfolio of attractive properties is characterised by low vacancy levels, long contracts and an underlying potential for rent uplift. "This, combined with a strengthened financial platform and improved economic prospects make the company well positioned for a positive future development," she said.