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Vovos: Net Asset Value per share at 2.20 Losses For 2010

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Babis Vovos International Technical Group announced that Net Asset Value per share before deferred tax stood at € 2.20, compared to € 11.78 in 2009.

NAV per share after deferred tax stood at € 1.72, compared to € 9.79 in 2009. The decrease in NAV was mainly due to a net loss from fair value adjustment on investment properties.

It should be noted that the company will not distribute a dividend to its shareholders for the fiscal year of 2010.

Group revenue stood at € 46.8 million at year-end 2010, a decrease of 13.8% compared to 2009. This decrease was partly due to the fact that the Group had no sales recorded during 2010, whereas in the same period in 2009 the sale of residential assets generated € 0.5 million, and also due to the construction works stood at €1.4 million in 2010 compared to €3.0 million in 2009. 

Moreover, the Groups rental revenue stood at €45.51 million, an 8.7% year-on-year decrease, which stemmed mainly from a 28% decrease in rental revenue from sublease contracts on non-investment properties that were not renewed since they were not generating any profit for the Group. 

On the other hand, rental revenue from investment properties, that represents 76.6% of BVICs lease revenue, remained nearly unchanged from year end 2009. 

Groups loss before interest, tax, depreciation and amortization (EBITDA) stood at € 282.7 million in 2010, compared to a loss of € 63.4 million in 2009 mainly due to the fact that Group recorded net loss from fair value adjustment on investment property of € 276.8 million in 2010 compared to € 88.0 million in 2009. The revaluation loss stemmed from the increase of the discount rate used for the Groups investment properties held under sale and leaseback and BOT agreements, reflecting the increase in risk premium. Moreover, the renegotiation of investment property lease agreements will lead to a decrease of 10% on average of the Group’s lease revenue in 2011. 

The Groups loss before tax stood at € 322.6 million at year-end 2010 compared to € 94.6 million in the previous fiscal year 

The Groups loss after tax for the year was € 274.9 million, compared to a loss after tax of € 76.8 million during 2009.

Investment Properties

BVICs investment property portfolio stood at € 829.5 million, as at 31 December 2010, a 26.5% decrease from the 2009 value of € 1,128.3 million. The decrease in investment properties stemmed mainly from fair value adjustments to the property portfolio based on current market conditions. As the economic situation in Greece worsens, it has put pressure on capital values, however the Groups investment property rental revenue remained nearly unchanged in 2010, and in 2011, the decrease in the portfolios rental revenue is expected to be approximately 10%. BVICs investment property portfolio benefits from the fact that it has an occupancy rate of over 90%, with long closed leases and strong tenants. 

Debt 

The Groups debt (current and non-current) stood at € 749.5 million in 2010, whereas it stood at € 754.2 million in 2009. 

Overview

2010 was a particularly challenging year for the Group, given the wide economic recession that also affected the Greek real estate market. Despite current market conditions, BVICs property portfolio maintains a very high occupancy rate, which exceeds 90% on average and stands at nearly 100% for our office portfolio. The re-negotiation of some of the Groups lease agreements led to a 10% reduction in the portfolios annual lease revenue on average, well within the 10-15% range guidance given by management in the third quarter of 2010 financial results press release. Moreover, these decreases were accompanied by an extension of the duration of the leases in most cases, and a restatement of the terms of non-right to terminate such contracts. 

The above clearly demonstrates the quality of both the Groups investment property portfolio and its tenants, most of whom are large multinational companies. 

As far as the shopping center of Votanikos is concerned, the draft legislation for the Joint Regeneration of Alexandras Avenue and Votanikos was submitted to Parliament. It has passed all the necessary stages and is expected to be voted within the next few days. This development effectively opens up the way for the resumption and completion of the construction of BVICs shopping center, that is expected to be completed and delivered cold shell to tenants six months after the issuance of a new building permit.
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