CB Richard Ellis, the global property services firm, posted net income of $6.5 bn (EUR 5 bn) or earnings per share of $0.03 in the fourth quarter of 2008, a 94% drop on the same period a year before ($0.54) and down 92% on the full-year figure ($0.37). Fourth-quarter revenue amounted to $1.3 bn, compared with $1.8 bn for the fourth quarter of 2007.
CB Richard Ellis, the global property services firm, posted net income of $6.5 bn (EUR 5 bn) or earnings per share of $0.03 in the fourth quarter of 2008, a 94% drop on the same period a year before ($0.54) and down 92% on the full-year figure ($0.37). Fourth-quarter revenue amounted to $1.3 bn, compared with $1.8 bn for the fourth quarter of 2007.
CBRE earned $83.9 mln, or 39 cents a share, on sales of $5.13 bn for 2008. This was a 79% drop compared with 2007.
Results during the fourth quarter were impacted by weak sales and leasing activity caused by the credit crunch and global economic downturn, the Los Angeles-based group said in a statement on Wednesday. Significant capital market turmoil also adversely affected incentive-based revenue within the Global Investment Management business and reduced real estate sales volume and values in the Development Services segment. These factors were partially mitigated by growth in the outsourcing business as well as lower compensation expense and savings realized through cost reduction efforts.
'To better position CBRE for long-term success, we have strategically diversified our revenue mix in the last few years and have moved decisively to eliminate fixed costs and improve operational efficiencies. For 2008, these moves enabled us to remain profitable in the face of very tough commercial real estate market conditions,' said Brett White, president and chief executive officer of CBRE.
He added: 'However, the credit crunch and global economic weakness pose serious challenges for our industry in 2009, and as such, we will continue to manage our business carefully to sustain profitability in a market where property sales and leasing activity remains highly constrained.'
To better align costs with lower revenue opportunities in the current market, the company has taken actions to eliminate a total of $385 mln of annual run-rate expenses for 2009. In addition, the company moved to reduce net debt which has decreased by approximately 14%, or $305.8 mln over the fourth quarter. The decrease was mainly a result of $207.8 mln in proceeds from a equity offering and cash flow from operations.
