July, 2008
RENTA CORPORACIÓN RECORDS SALES OF 176.1 MILLION EUROS

. The need to renew the portfolio has forced us to accept narrow operational margins, which, together with provisions for extraordinary items based on prudent accounting principles, produces a net loss of 25.7 million euros.

. Net debt is down 75 million euros at 662 million euros.

24 July, 2008 – The results achieved in the period January-June this year reflect the low level of activity in the market due to excess of supply linked to demand which, in some cases, is waiting until prices finally stabilise and, in others, does not have access to sufficient lines of credit to be able to complete operations.

• Sales and income. In the first half of 2008, the Company’s sales figure stood at 176.1 million euros. Although the results represent a drop of 60% compared with the same period of last year – with a market situation which was still stable -, they are nevertheless up 84% with respect to the second half of 2007 (95.8 million euros), at which time the current international financial crisis had already been unleashed. The Company observes that there continues to be a deep state of crisis in this first half year, which is why the increase in sales is seen in a positive light.

  In addition, the Company has recorded rental income of 10.1 million euros, three times that of the first half of 2007 (3.7 million euros). The Company’s total revenues were 186.2 million euros.

  Geographically, Madrid and Barcelona accounted for 80% of sales, and by business unit, practically all the sales were of buildings, most of which were offices.

• In line with the strategy set by the Company to give priority to liquidity in order to renew the portfolio as quickly as possible, the ordinary operational gross margin in the first half year was +1.7 million euros, though it should be said that the Company has considered it prudent in addition to make a 6.3 million euro provision for certain inventory items. The final result is that the gross margin on sales comes to minus 4.6 million euros.

• The net loss for the period January-June 2008 was 25.7 million euros. This figure includes the abovementioned provision on inventory of 6.3 million euros as well as extraordinary expenses of 3.5 million euros due to organisational restructuring. In addition, it includes a profit of 3.1 million euros due to the revaluation of Renta Corporación’s shareholding in Mixta Africa

• Investment made in the first half of this year was 107.3 million euros, significantly lower by 177 million euros than that of the comparable previous period. This reduction is due to two factors:
  
  
  • The Company’s strategic decision to improve its net debt position, giving priority to reducing indebtedness.
  • The extremely selective criterion applied to the acquisition of new product.

  Of the total investment, 39% (42 million euros) was in physical transformation, the process by which the Company adds value to its assets in order to put them back on the market with attractive conditions for investors seeking optimal short term yield and good return on capital in the medium to long term. The remaining 61% (65.3 million euros) was invested in the purchase of new assets.

• At the close of June 2008, the portfolio (inventory plus investment rights) stood at 1.123 billion euros, which represents a decrease of 18% (-242.7 million euros) with respect to the 2007 year end. This decrease is due not only to the Company’s strategic decision to be very selective and extremely prudent in the acquistion of new product, but also to the advisability of maintaining a reasonable balance between levels of sales and investment.
  
  
  • Inventory stood at 777.6 million euros, 81.3 million lower than at the end of 2007. 34% of inventory is in the international market.
    
    It should be pointed out that given Renta Corporación's business model (transformation in order to create value and subsequent sale), the value of assets must be accounted for as inventory, so these are valued at cost price (777.6 million euros) According to the latest market valuation available, these assets would have a value of approximately 1 billion euros.
    
    
  • Investment rights stood at 345.4 million euros, down by 161.4 million from the 2007 year end. It should be pointed out that premiums on investment rights to the value of 3.6 million euros have been foregone, in accordance with the very selective and extremely prudent criteria adopted by the Company.

• Debt. As regards debt, the Company continues with the previously announced policy of reducing indebtedness as it completes sales. At the June 2008 close, the figure for net debt stood at 661.6 million euros, which represents a reduction of 74.6 million euros since December 2007.

Barcelona, 24 July of 2008

For further information:
www.rentacorporacion.com
Communication: Teresa Lloret. Tel. (+34) 600 501 732 / 656 800 551
mail: comunicacion@rentacorporacion.com