Deutsche Real Estate: Value adjustments lead to profit warning
Due to value adjustments on its property, Deutsche Real Estate AG is expecting an earnings reduction of €20mn to €25mn for 2008. The firm attributes this negative valuation effect mainly to a significant decline in its beta factor, resulting from the increased risk of loss of rent due to the current market situation. Value adjustments of the derivative financial instruments led to further losses running to €15mn. On the other hand, the institute says that it was able to significantly reduce its operative deficit before taxes (EBT) before the above mentioned fair value adjustments. Last August, the firm was still predicting results for 2008 that, while negative, would have signified a clear improvement in consolidated net earnings compared to 2007.