(Bloomberg) -- Adler Group SA reported a €971 million ($1.06 billion) operating loss for the first nine months of the year as the impact of rising interest rates and the costs of its restructuring plan hit earnings.

The loss comes despite the landlord not conducting an updated portfolio valuation for the third quarter after taking a separate €1 billion writedown on the value of its assets in the first half. Adler’s loan-to-value ratio still rose to 89.1% after the sale of two development projects and a portfolio of newly built apartments in Berlin, according to a statement on Tuesday.

The company paid off €270 million of debt with the proceeds from disposals but sales are progressing “at a slower pace than expected”, according to a separate presentation.  

The embattled firm has been racing to sell assets to shrink its €6.5 billion debt load after a corporate scandal that’s resulted in a criminal prosecution. Creditors agreed to give the company €937 million of new money earlier this year in an effort to keep it afloat and buy time to sell off properties in an orderly manner. The turnaround efforts have been complicated by a sharp reversal in the German real estate market that’s still reeling from the end of the zero interest rate era. 

Adler has managed to repay its credit due this year and has another €390 million of debt that’s due to mature in 2024, compared with cash of €432 million on its balance sheet at the end of September.

It faces a stiffer challenge in 2025 when almost €2.2 billion of debt matures. To help pay that back, the company is seeking to sell almost 6,800 homes, as well as its remaining 63% stake in Brack Capital Properties NV. An earlier deal to sell its shareholding in the firm to rival LEG Immobilien SE collapsed. 

The embattled German landlord reported negative funds from operations of -€7 million, which it blamed on higher borrowing costs. The company’s portfolio now comprises about 25,000 residential units, almost 18,000 of which are in Berlin. At its peak, it owned about 70,000 homes.

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