Messepark Bern AG Report
In February of the 2019 financial year, the BERNEXPO GROUPE and HRS Real Estate Ltd. signed a letter of intent to further develop the existing infrastructure of Messepark Bern AG and in particular to implement the new BeMotion Base multifunctional hall.
The infrastructure of Messepark Bern AG was subsequently analysed by external experts within the scope of a comprehensive due diligence assessment. At the same time, the BERNEXPO GROUPE worked with HRS Real Estate Ltd. to validate concepts for future use of the exhibition area and develop a suitable participation structure for Messepark Bern AG. The overall project of the new multifunctional hall is on track and is to be implemented in cooperation with new shareholders. In accordance with this, the development regulation relating to the new multifunctional hall was further revised last year and the file was submitted to the Office for Municipalities and Spatial Planning (Amt für Gemeinden und Raumordnung, AGR) for final preliminary examination. The development regulation will be made available for public inspection at the beginning of April 2020. The related informational events planned in the affected neighbourhood will be held depending on what is happening with the coronavirus.
Talks are currently being held with potential shareholders in Messepark Bern AG with the goal of closing the transaction in summer 2020. The transaction model provides for sale of shares, with the BERNEXPO GROUPE remaining a minority shareholder of Messepark Bern AG. The number of shareholders will be kept small and none of the new owners will have a majority stake in Messepark Bern AG. Part of the transaction will include a 20-year lease agreement with BERNEXPO AG for the entire exhibition area.
Last year, the necessary maintenance and repair work was again carried out on the existing properties. As a result, festivals and events of the BERNEXPO GROUPE could once again be hosted smoothly, trouble-free and to the satisfaction of the customers. As usual, the work was carried out efficiently and carefully by the responsible persons and contracted companies.
Messepark Bern AG closed the 2019 financial year with a profit that was slightly higher than in the previous year. The lower operating income was offset by a reduction in the operating and financing expenses.
Operating income fell by CHF 0.6 million to CHF 7.2 million in the reporting year, as the result-dependent rental component decreased due the drop in the BERNEXPO AG result. Operating expenses decreased by CHF 0.3 million to CHF 1.6 million compared to the previous year due to lower maintenance costs and administrative expenses.
EBITDA (earnings before interest, taxes, depreciation and amortisation) for the 2019 reporting year is CHF 5.6 million, CHF 0.3 million below the previous year’s result. After depreciation and amortisation in the amount of CHF 5.1 million (as in the previous year), EBIT (earnings before interest and taxes) amounts to CHF 0.5 million, CHF 0.3 million lower than in the previous year. Continuous amortisation of mortgage debt and a goodwill discount received on interest payments led to a reduction in financial expenses of CHF 0.4 million to CHF 0.3 million compared to the previous year. After a tax burden of CHF 0.1 million is taken into account, annual earnings are positive at CHF 0.1 million.
At the end of December 2019, cash and cash equivalents amounted to CHF 1.0 million, a decrease of CHF 4.1 million compared to the previous year. This is due to the fact that there was a large credit balance open on the current account with BERNEXPO AG in the amount of approximately CHF 4.6 million, which will be balanced in the new financial year and, in addition to the financing of planned investments, will primarily be used to pay off mortgage debts (CHF 3.1 million). With an equity ratio of 78.2% (+5.2% compared with the previous year), Messepark Bern AG has a very healthy balance sheet.
In the coming financial year, the task will be to prepare the groundwork for successfully coordinating the necessary loans and the development regulation for the new hall, and to define the structure of Messepark Bern AG in such a way that the BERNEXPO GROUPE has the best possible conditions for its strategic development with a focus on its core business. This also includes the detailed planning for the multifunctional hall. As part of the transaction, all existing building rights agreements with the Burgergemeinde and the city of Bern are to be renegotiated and extended.
On behalf of the Board of Directors, I would like to take this opportunity to thank all stakeholders and partners who are committed to the maintenance and further development of Messepark Bern AG.
Chair of the Board of Directors