Blackrock reports loss of almost €8m as property downturn bites

BLACKROCK International Land, the property development company spun off from Fyffes two years ago, has reported a pre-tax loss of a little less than €8 million for the first half of 2008, down from a profit before tax of €12.16m for the same period last year.

Rising interest rates, increasing credit constraints and reduced levels of economic activity in Ireland and Britain — Blackrock’s core geographical markets — were to blame for the €7.96m loss. The company also recorded a loss per share of €1.60 for the first six months of this year, compared to earnings per share of €1.62 for the first half of 2007.

Nevertheless, the company was putting a positive spin on matters yesterday saying that it was a reasonable performance given the way market conditions have gone in recent months.

Blackrock’s chairman, Carl McCann said: “In the context of the changed property market environment, we have delivered a reasonable performance in the first half of 2008. Progress has been made in adding value to several of the group’s significant development properties. However, this has been offset by lower valuations in other elements of the company’s portfolio. The group continues to benefit from a robust and well diversified set of assets with the potential to deliver significant additional value into the future.”

During the first half of the year, Blackrock invested €1.1m in Irish-based projects and €6.6m in various joint venture agreements in Scotland. Despite the poor result, the company reiterated that it is continuing to explore “a substantial number of new investment opportunities” but hasn’t concluded any acquisitions so far this year. The company has previously stated its desire to expand outside Ireland and Britain and into continental Europe.

However, it is continuing to be very guarded on its outlook for the rest of the year, saying that “it would seem optimistic to foresee any valuation uplift for the remainder of the year”.

“It is unclear when property markets will begin to recover but a significant decline in interest rates, whenever this occurs, is likely to be an important catalyst,” added Mr McCann.