IGD SiiQ

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Economic and financial terms

Direct costs

Costs directly attributable to the shopping centers.

 

Dividend yield

The dividend yield, or price/dividend ratio, on a company stock is the company's annual dividend payments made or announced dividend by closing price of its ordinary shares at the end of the year.

 

EBIT (Operating profit)

EBIT, or Earnings before Interest and Taxes, differs from EBITDA in that it includes information on amortization, depreciation and changes in the fair value of properties held. In the case of IGD, which follows International Accounting Standards (IAS), amortization and depreciation are not overly significant as the value of the freehold properties is updated every six months, based on independent appraisals; properties are recognized at market value in the balance sheet, while the difference in fair value portfolio is shown in the income statement between EBITDA and EBIT.

 

EBITDA

EBITDA or Earnings before Interest, Taxes, Depreciation & Amortization, is the most significant measure of a company's operating performance as it indicates earnings regardless of the company's means of financing, taxes or investment cycle. EBITDA is a proxy for the operating cash flow that the company is capable of generating.

 

EPS/Earnings per share

Net profit dividend by the average number of shares outstanding in the year.

 

FFO/Funds from Operations

Net profit plus deferred taxes, depreciation & amortization, net change in the market value of properties and writedowns. This is the indicator most commonly used to evaluate a REIT's performance.

 

Gross margin

The result obtained by subtracting direct costs from revenues.

 

Hedging level

The percentage ratio between the amount of bank loans and bonds covered by IRS (Interest Rate Swaps) and total bank loans and bonds.

 

IRS/Interest Rate Swaps

Financial instrument whereby two parties agree to exchange a certain interest rate stream on a pre-established date. Used to convert floating rate debt into fixed rate debt.

 

Initial yield

The annualized rental income from a property as a percentage of its valuation at the time of purchase.

 

Joint venture

Entity controlled on a long-term basis by two or more parties, based on a contractual agreement which calls for decisions regarding the management and financing of the enterprise to be made jointly.

 

Like-for-like portfolio

Real estate assets held in the portfolio for the entire year and the entire prior year.

 

LTV/Loan to Value

Ratio between the amount borrowed and the fair market value of freehold properties.

 

Market value (Fair value)

The estimated amount for which a property could be exchanged as of the valuation date, between a buyer and seller each acting prudently and with knowledge of all the facts. The definition of market value used by the appraiser is as follows: "Pursuant to the 6th and latest edition of the "RICS Appraisal and Valuation Manual" (the "Red Book") publishe dby the Royal Institution of Chartered Surveyors in the United Kingdom and translated into Italian on 1st January 2008, market value is the estimated amount for which a property could be bought and sold on the dtae of valuation between a willing buyer and a willing seller in an arms-length transaction after proper marketing wherein the parties have each acted knowledgeably, prudently and without compulsion".

 

NAV/Net Asset Value

Difference between the value of properties (Asset Value) and net debt. The NAV per share indicated in IGD's financial statements is the Triple Net Asset Value (£NAV), wchich is expressed net of latent capital gains and the tax effect. In the calculation, potential capital gains on freehold property are added to net equity. The tax effect, based on the company's tax rate, is then deducted from this result. This Net NAV (NNAV) figure is then divided by the number of shares issued.

 

Reversionary potential yield

The net annual rent that a property would generate if it were fully let at going market rates, as a percentage of the property's value.

 

ROACE/Return on Average Capital Employed

Operating income dividend by average capital employed in the year.

 

ROE/Return on Equity

Net profit dividend by net equity after dividends.

 

Shared costs

Corporate costs not attributable to the individual shopping center.

 

WACC/Weighted Average Cost of Capital

The weighted average cost of debt and all other sources of capital, used to calculate the expected return on investments.

 

 
 
 
 
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