Jones Lang Q2 Profit Dives 67% To US$25m

Source : The Business Times, July 31, 2008

(NEW YORK) Jones Lang LaSalle Inc, the world's second-largest commercial real estate broker, said that second-quarter profit fell 67.6 per cent as borrowing costs increased for apartment buildings, offices and retail properties.

Mr Dyer: Diverse business lines offset the impact of illiquid credit markets

Net income declined to US$25.5 million, or 73 US cents a share, from US$78.6 million, or US$2.32, a year earlier, the Chicago-based company said in a statement on Tuesday. Revenue dropped 2.5 per cent to US$660 million.

Higher borrowing costs and scarcer financing for investment in commercial real estate cut into property sales.

Financial services firms have lost or written down more than US$468 billion since the beginning of last year, prompting them to curtail lending.

The company said that it had a 34 per cent increase in investment advisory fees and a 23 per cent increase from commissions.

'Solid revenue performance from LaSalle Investment Management and our diverse business lines offset the continued impact of illiquid credit markets,' chief executive officer Colin Dyer said in the statement.

Jones Lang, second in market value to CB Richard Ellis Group Inc, earns about 34 per cent of its revenue from Europe and the Middle East, 29 per cent from the Americas and 23 per cent from the Asia-Pacific region, according to a company report this month.

The company was projected to earn US$1.01 a share, according to the average of four analysts' estimates in a Bloomberg survey.

In the Americas region, Jones Lang said, revenue rose 6 per cent to US$190 million. In Europe and the Middle East, it rose 20 per cent to US$236 million, and Asia Pacific revenue fell 33 per cent to US$142 million. That decline came after the company failed to repeat a year-ago gain made on a hotel transaction.

Jones Lang stock has lost 20 per cent in New York Stock Exchange composite trading since the beginning of the year.

Jones Lang operates in more than 700 cities and 60 countries with about 30,000 employees, according to its website. It represents tenants, and manages, leases and values commercial real estate. -- Bloomberg