RPT-Czech Orco 2006 NAV nearly doubles; warns on sales

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Czech real estate developer Orco said on Monday its net asset value (NAV) nearly doubled, topping expectations, but warned that 2007 sales would lag its previous forecast.

Net asset value, a key indicator for real estate firms, rose to 92 euros per share at the end of 2006 from 49.7 euros at the end of 2005.

Four analysts contacted by Reuters, on average, expected NAV to rise to 83.6 euros per share from 70 euros at the end of the first half.

The company said 2006 sales reached 172 million euros, below its own outlook of 180 million, adding that it would book an extra 10 million in first-quarter 2007 sales, corresponding to flats sold in Poland last year but not accounted for due to an accounting change.

Orco sees 2007 sales at 233 million euros, significantly below the total of 320 million it had previously given.

Company officials were not immediately available for comment.

The Luxembourg-based firm added it was selling most of its hotel portfolio in a transaction to be completed in March.

Orco is selling both the buildings and the operations for 171.1 million euros, reducing its debt by about 65 million euros, the company said in a statement.

The total cash return for Orco since the acquisition of these hospitality properties will amount to approximately 100 million euros.

It added that amount had partially been recognised in portfolio revaluation profits and was now turned into cash.

The buyer is a joint venture of the new Endurance Hospitality fund set up by Orco and an unnamed institutional investor.

Orco shares closed 0.2 percent up at 3,153 crowns ahead of the news on Monday. (1 US dollar = 21.541 crown)

[PRAGUE/Reuters/Finance.cz]