Advance Terrafund REIT Q1’14 net profit down 12% on lower land sales (NEUTRAL)

Advance Terrafund reported net profit of BGN 2.1m for Q1’14, down 12% YoY as the gain from the sale of land declined 29% YoY to BGN 795k. During the quarter the REIT sold 1753 daa at an average price of BGN 1192/daa, while in Q1’13 it sold 2914 daa at an average price of BGN 1129/daa. Thus, the average sale price was up 6% YoY. Rent revenues advanced by 4% YoY to BGN 1.5m as the average rented land in Q1’14 was down 15% YoY to 162.9k daa but the average rent increased 21% YoY to BGN 36.56/daa. Net interest income fell 25% YoY in line with the lower cash position and declining interest rates. As of end-March the REIT owned 227 477 daa of land. The company had signed preliminary contracts for the sale of 16 417 daa of land with book value of BGN 12.2m (BGN 746/daa). On the balance sheet, accounts payable jumped 77% YTD to BGN 4.6m as of end-March due to the increase in received advances to BGN 3.9m from BGN 1.5m as of end-2013.