Cushman & Wakefield lost $17.2m (£10.9m) in the first half of the year, nearly double the figure at the same time last year.
The global property services firm’s net loss, as reported under US GAAP standards, compares with a $9.6m loss for the first half of 2011.
The firm, which is majority owned by the listed Italian company Exor, said gross revenue rose 2.5% – or 4.9% excluding the impact of foreign exchange – to $906.5m, compared with $884.4m for the same period last year.
C&W’s first-half commission and service fee revenue fell 3.6% – or 1.1% excluding the impact of foreign exchange – to $678.2m for the first six months of 2012, compared with $703.5m last year.
The firm said this slight decline “reflects a slowdown in the global real estate market and was partially offset by continued growth in the corporate occupiers and investor services (CIS) and valuation and advisory services lines across all geographic regions.”
The drop in commission and service fee revenues and an increase in cost of services sold, took its toll at the operating income level, where Cushman made a loss of $2.8m for the first half of 2012. This compares with operating income of $11.6m last year.
EBIDTA fell $14m to $18.2m – down from $32.2m for the first half of last year under US GAAP.
C&W president and chief executive Glenn J Rufrano said: “In the first half of 2012, we made significant progress in executing our long-term strategic plan, investing in quality talent and positioning ourselves for growth within key markets and service lines.”
“We remain focused on delivering meaningful value to our clients, advising on how to best leverage their real estate to achieve their business goals, particularly in this challenging economic climate.”
In the second quarter C&W delivered net income of $4.3m – an increase of $2.5m from $1.8m the same time last year as reported under US GAAP standards.
Quarterly revenue fell by less than 1% – or increased by 3.2% excluding the impact of foreign exchange – to $503.7m. This compares with $504.4m for the second quarter of 2011.
C&W’s second-quarter commission and service fee revenue, which excludes reimbursed costs related to managed properties and other costs, declined 6.1% – or 2.6% excluding the impact of foreign exchange – to $381.6m, as compared with $406.3m for Q2 the previous year.
However, this drop was partially offset by continued growth in the corporate occupiers and investor services (CIS) business which is a “major component of the firm’s strategic growth plan”.
CIS revenue grew 4% globally and 21% in the US in the quarter.
At the operating income level, Cushman delivered operating income of $21.4m – a 5.9% improvement on the same time last year, largely driven by a decrease in certain operating expenses, which offset the reduction in commission and service fee revenue.
On a US GAAP basis, EBIDTA increased $6.5m, or 23.6%, to $34.1m for the three months to the end of June.
bridget.o’connell@estatesgazette.com
