DGAP-News: Prime Office REIT-AG starting 2012 solidly with a sizeable profit and confirming the guidance for the full year
(firmenpresse) - DGAP-News: Prime Office REIT-AG / Key word(s): Quarter Results
Prime Office REIT-AG starting 2012 solidly with a sizeable profit and
confirming the guidance for the full year
10.05.2012 / 07:30
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First quarter results 2012 in line with expectations
Prime Office starting 2012 solidly with a sizeable profit and confirming the
guidance for the full year
- Sizeable net income of 5.6 million Euro in spite of higher rental and
lease expenses, higher costs of publishing and temporary vacancy in the
property in Stuttgart/ Moehringen
- Rental and lease revenues of about 18.2 million Euro as expected
- Funds from operations of 6.5 million Euro in line with the guidance
- Net debt substantially reduced in the wake of the IPO: leverage at 57.9
percent and loan-to-value ratio (LTV) at 65.1 percent
- REIT equity ratio on 31 March 2012 at 43.2 percent, slightly below the 45
percent threshold: The German REIT law grants another 2 years of impunity
during which to return to the statutory limit; the Board expects to again
meet the REIT requirement in 2012
- Positive outlook for the full year confirmed: projections for revenues
including operating cost prepayments between 72 and 74 million Euro and for
the FFO between 17 and 19 million Euro; in spite of charges for
reconstruction and temporary vacancies the Board projects a a dividend of 9
to 12 million Euro for the fiscal year
Munich, 10 May 2012. Prime Office REIT-AG ('Prime Office'), a leading
property firm focused on investments and management of prime office
properties in Germany, is presenting its results for the first quarter of
2012, which confirm the robust development of the Company. Overall, the
results in the first quarter are in line with management expectations even
though a year on year comparison is difficult due to - in some areas
significant - one-off effects, for instance from the Company's IPO in July
2011 and last year's fair valuation of the portfolio. With this in mind, the
Board of Prime Office confirms the positive outlook for the full year and
its related targets.
'We are pleased with the stable operating result achieved over the first
three months of 2012. Business has developed in line with our expectations
and we are very optimistic that we can meet our targets for the full year.
These targets also include an attractive dividend which meets the
expectations of our shareholders.', says Claus Hermuth, the CEO of Prime
Office.
Over the reporting period, the Company generated rental and lease revenues
of about 18.2 million Euro, which were slightly down year on year as
expected, falling by 0.7 million Euro or 4.0 percent (Q1 2011: 18.9 million
Euro). The rental and lease expenses increased by about 0.3 million Euro or
13.4 percent to 2.9 (Q1 2011: 2.6) million Euro in the first quarter. Higher
rental and lease expenses and the temporary vacancy therefore reduced the
rental and lease income as expected by 1.4 million Euro or 8.1 percent to
15.3 (Q1 2011: 16.7) million Euro.
The other operating expenses increased by 0.4 million Euro to about 1.2 (Q1
2011: 0.8) million Euro over the reporting period, which was mainly due to
higher expenses related to the disclosure obligations of Prime Office as a
listed company. This development combined with slightly higher depreciation
and amortisation as well as expenses for employee benefits led to an
operating income before valuation effects of 13.9 (Q1 2011: 15.6) million
Euro. As expected, the operating earnings before interest and taxes (EBIT)
amounted to 13.9 million Euro in the first quarter of fiscal year 2012 and
were thus below the prior year result of 16.2 million Euro as expected. This
decline resulted inter alia from the unrealised gains from the fair
valuation of our property portfolio in connection with the IPO, which had to
be recognised in the prior year period and did not materialise during the
reporting period. This fiscal year, the intra-year valuation of the property
portfolio will be performed on schedule by mid-year.
The financial result of Prime Office for the first three months of fiscal
year 2012 amounted to 8.3 million Euro, exceeding the prior year number as
expected (Q1 2011: -5.8 million Euro). Interest expenses fell from 9.8
million Euro in the first quarter of 2011 to 9.2 million Euro in the current
reporting period even though the result of the prior year period benefited
substantially from gains from the fair valuation of derivative financial
instruments and foreign currency gains. As expected, the earnings before
income taxes (EBT) amounted to 5.6 (Q1 2011: 10.4) million Euro as at 31
March 2012.
In spite of the temporary vacancy in the property in Stuttgart/ Moehringen,
higher rental and lease expenses, higher publishing costs as a listed
company and financing expenses, Prime Office generated a substantial net
income of 5.6 (Q1 2011: 10.2) million Euro. Income per share therefore
amounted to 0.11 (Q1 2011: 0.58) Euro. Funds from operations (FFO) in the
first quarter of fiscal year 2012 reached 6.5 million Euro or 0.13 Euro per
share as expected, only slightly down year on year (Q1 2011: 6.9 million
Euro or 0.40 Euro per share).
The equity of Prime Office increased slightly from 418.0 million Euro as of
31 December 2011 to 418.9 million Euro on balance sheet date 31 March 2012.
Since the interest rate development in the first quarter of 2012 continued
to weigh on the existing interest rate hedges (swap transactions) on
property financings, the REIT equity ratio on reporting date 31 March 2012
amounted to 43.2 (31 December 2011: 43.1) percent, which is slightly below
the minimum equity ratio of 45 percent required for REIT joint-stock
corporations. Under the German REIT law, the Company has two years from 31
December 2011, when it first failed to meet the REIT requirement, during
which to return to the statutory minimum with impunity. The Board expects,
however, that the Company will already achieve the 45 percent equity ratio
and thus comply with the equity requirements of the REIT law in 2012.
By going public in the summer of 2011, Prime Office could substantially
improve its assets and financial situation and also use the proceeds from
the capital increase to reduce leverage. As per the reporting date on 31
March 2012, Prime Office had net debt of 562.2 million Euro, which was
slightly in excess of the prior year result (31 December 2011: 561.5 million
Euro). The resulting leverage of 57.9 (31 December 2011: 57.8) percent
remained almost unchanged in the first quarter, as did the loan-to-value
ratio (LTV), which amounted to 65.1 (31 December 2011: 65.2) percent.
Regarding the future development of the business, Prime Office confirms it
positive outlook for fiscal year 2012 and the Board continues to expect
revenues including operating cost prepayments of 72 to 74 million Euro and
FFO of 17 to 19 million Euro. Adjusted by one-off effects related to the
planning, reconstruction and marketing of the properties in Stuttgart/
Moehringen, Frankfurt and Dusseldorf/ Seestern, the FFO would amount to 24
to 26 million Euro. In spite of the negative effects from the reconstruction
and temporary vacancy, Prime Office also expects to achieve a dividend of 9
to 12 million Euro in fiscal year 2012, which will be payable in 2013. Above
and beyond that, the Board will make every effort to achieve its letting
targets and sustainably close the gap between the share price and the
Company's NAV.?Key financial ratios of Prime Office REIT-AG
(in mm EUR) 01/01-31/03/2012 01/01-31/03/2011 Delta (in %)
Rental revenues 18.2 18.9 (4.0)
Net rental income 15.3 16.7 (8.1)
Operating earnings (EBIT) 13.9 16.2 (14.2)
Finance expenses (10.9) (11.5) (5.2)
Income for the reporting period 5.6 10.2 (45.1)
Income per share (in Euro) 0.11 0.58 (81.4)
Funds from operations (FFO) 6.5 6.9 (5.5)
FFO per share (in Euro) 0.13 0.40 (68.3)
(in mm EUR) 31/03/2012 31/12/2011 Delta (in %)
Total assets 1,135.7 1,130.5 0.5
Equity 418.9 418.0 0.2
REIT equity ratio (in percent) 43.2 43.1 0.1
Leverage (in percent) 57.9 57.8 0.2
Net asset value (NAV) 475.7 471.6 0.9
NAV per share 9.16 9.08 0.9
Contact details
Prime Office REIT-AG
Richard Berg
Director
Investor Relations / Corporate Communications
Hopfenstrasse 4
80335 Munich
Telephone +49. 89. 710 40 90 40
Facsimile +49. 89. 710 40 90 99
Email richard.berg(at)prime-office.de?About Prime Office REIT-AG
Prime Office REIT-AG (Symbol: PMO, ISIN DE000PRME012) with headquarters in
Munich is a leading property firm focusing on investments in high quality
office buildings in Germany as well as their facility and property
management. The company's portfolio consists of 14 office properties in
central locations across major cities and conurbations in Western Germany
with a total useable area of approximately 385,000 square metres. According
to a valuation performed by the property surveyor CB Richard Ellis, the 14
properties had a total market value of approximately 972 million Euro as at
31 December 2011. The property portfolio of Prime Office consists
exclusively of individual buildings in premium locations. All holdings are
select modern office properties with an attractive architecture and high
building quality. The portfolio is broadly diversified across locations and
tenants. The properties are rented long-term to high credit-quality tenants.
Prime Office REIT-AG intends to generate stable long-term rental income
using a return-oriented approach to managing the existing portfolio based on
broad property, location and tenant diversification. Rental income is also
expected to grow consistently through the addition of suitable individual
properties. The company plans to become a leading specialised REIT for prime
office properties in Germany.
For additional information on Prime Office REIT-AG please visit us on the
Internet on: www.prime-office.de
End of Corporate News
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10.05.2012 Dissemination of a Corporate News, transmitted by DGAP - a
company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Prime Office REIT-AG
Hopfenstraße 4
80335 München
Germany
Phone: +49 (0)89 7104090 40
Fax: +49 (0)89 7104090 99
E-mail: richard.berg(at)prime-office.ag
Internet: www.prime-office.ag
ISIN: DE000PRME012
WKN: PRME01
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), München,
Stuttgart; Freiverkehr in Berlin, Düsseldorf
End of News DGAP News-Service
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Datum: 10.05.2012 - 07:30 Uhr
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