DGAP-News: DIC Asset AG posts half-year results: Significantly higher FFO
(firmenpresse) - DGAP-News: DIC Asset AG / Key word(s): Half Year Results
DIC Asset AG posts half-year results: Significantly higher FFO
15.08.2012 / 07:30
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DIC Asset AG posts half-year results: Significantly higher FFO
- Gross rental income increases sharply to EUR 62.5 million (H1 2011: EUR
56.5 million)
- Vacancy rate improves to 12.0 per cent (H1 2011: 13.8 per cent)
- Operating profit FFO climbs by 6 per cent, to EUR 21.3 million (H1
2011: EUR 20.1 million)
- Significant marketing steps achieved with regard to the MainTor Quarter
- Target FFO for 2012 unchanged, at between EUR 43 million and EUR 45
million
Key results at a glance:
DIC Asset AG (German Securities ID 509840 / ISIN DE0005098404) today
presents its interim report for the first half of the 2012 financial year.
Gross rental income posted a marked increase of 11 per cent, to EUR 62.5
million. The vacancy rate has fallen further to only 12.0 per cent,
reflecting successful rental activities. The operating profit (FFO)
increased by 6 per cent, to EUR 21.3 million. All in all, DIC Asset AG
generated consolidated profit of EUR 5.1 million (H1 2011: EUR 6.2
million), which is down on the previous year largely owing to expenditure
targeting future projects. The trends of the first quarter were thus
confirmed overall.
Details of the half-year report
Although sentiment improved initially, the first half of 2012 was once
again defined by uncertainty stemming from the European sovereign debt
crisis. In this market environment, DIC Asset achieved gross rental income
of EUR 62.5 million (H1 2011: EUR 56.5 million). The 11 per cent increase
was driven by portfolio growth as well as by constant and strong letting
performance. Net rental income in the first six months amounted to EUR 56.1
million and was therefore 7 per cent higher year-on-year (H1 2011: EUR 52.2
million). Fees from real estate management were unchanged at EUR 2.3
million. Higher asset and property management revenues from the 'DIC Office
Balance I' special investment fund therefore made up for the loss of fees
after the sale of properties held in the Co-Investment segment and joint
venture portfolios from the previous year that were fully taken over. Total
revenues also increased to EUR 78.2 million (H1 2011: EUR 76.0 million),
primarily reflecting higher rental income.
DIC Asset AG increased its letting volume by 16 per cent over the previous
quarter to 60,000 sqm (Q1 2012: 52,000 sqm). Total letting volume in the
first half year amounted to around 112,000 sqm (H1 2011: 138,000 sqm). This
equates to annualised rental income of EUR 11.7 million and is therefore
just short of last year's figure (H1 2011: EUR 12.4 million). The
like-for-like increase in rental income was 0.1 per cent, as in the first
half of the previous year. Overall, the vacancy rate was lowered
significantly to 12.0 per cent (H1 2011: 13.8 per cent, Q1 2012: 12.3 per
cent). Letting volume to date this year reduced the potential volume of
contracts set to expire in 2012 by more than half, from 9.9 to 4.3 per cent
of annual rental income. Lease expiries in 2013 have already fallen from
9.6 to 7.4 per cent.
The acquisition volume to date in 2012 amounts to EUR 86 million. This
includes the purchase of an office property at the main station in
Frankfurt/Main (EUR 17 million) for the asset portfolio (Commercial
Portfolio), a new office building in Eschborn for the 'DIC Office Balance
I' special investment fund (EUR 44 million), as well as two properties in
Mannheim and Dresden (EUR 25 million) for the 'DIC HighStreet Balance'
retail property fund that is being developed and marketed. The disposal
volume to date for 2012 stands at EUR 12.4 million. This comprises
primarily four properties, each of which are significantly lower than the
average property size of around EUR 12 million, which has further optimised
the portfolio structure.
Net financing expenses increased in the first half year - reflecting
portfolio expansion - with an interest result of EUR -28.6 million (H1
2011: EUR
-26.1 million). This was attributable in particular to higher financing
volumes as a result of the acquisitions and expenses incurred for servicing
the bond issue. Interest income rose from EUR 3.6 million to EUR 4.9
million, whilst interest expense increased from EUR -29.7 million to EUR
-33.5 million.
The average maturity of the financial debt of EUR 1.52 billion (31 December
2011: EUR 1.52 billion, 30 June 2011: EUR 1.43 billion) was 3 years as at
30 June 2012. In the first half of 2012, 11 loans with an aggregate volume
of around EUR 500 million were arranged with around a dozen banks, with the
loans covering the entire managed real estate portfolio. The average rate
of interest on financial debt was 4.20 per cent as at 30 June 2012 -
therefore 15 basis points lower than at year-end 2011 (Q4 2011: 4.35 per
cent).
Personnel expenses increased to EUR 5.8 million (H1 2011: EUR 4.9 million)
due to the expansion of DIC Asset AG's business activities, while
administrative expenses of EUR 4.2 million were unchanged year-on-year. The
operating cost ratio - the ratio of staff and administrative expenses to
gross rental income (adjusted for fees from real estate management) - of
12.3 per cent was in line with plan.
FFO (funds from operations, defined as earnings before interest and taxes,
and excluding profits from disposals and development projects) was EUR 21.3
million for the first six months and was therefore 6 per cent higher than
in the previous year (H1 2011: EUR 20.1 million), primarily because of the
larger portfolio and thanks to successful rental activity. The FFO per
share remained stable, at EUR 0.47, despite the higher number of shares
compared with the same period of the previous year. Profit for the period
of EUR 5.1 million (H1 2011: EUR 6.2 million) was down EUR 1.1 million
year-on-year, as expected. This was due, amongst other factors, to higher
personnel and interest expenses.
Cash flow from operating activities (after interest and taxes paid) of EUR
21.3 million was clearly higher than the previous year (H1 2011: EUR 19.3
million). This reflects above all higher rental income generated from the
expanded portfolio. Cash and cash equivalents totalled EUR 74.8 million at
the end of the reporting period (31 December 2011: 100.3 million).
Real estate assets under management were unchanged at EUR 3.3 billion; DIC
Asset AG's total assets increased to EUR 2.3 billion (31 December 2011: EUR
2.2 billion). The net debt equity ratio (net of cash and exclusive hedging
reserve) stood at 31.4 per cent as at 30 June 2012 (31 December 2011: 31.7
per cent).
The MainTor Quarter project, in which DIC Asset AG holds a 40 per cent
stake, is progressing quicker than planned. The breakdown of the
development of the Quarter into several sub-projects, to be developed
independently from each other in terms of time and place, resulted in the
targeted risk mitigation that was rewarded by the market. With the sale of
the 'MainTor Panorama' and 'MainTor Patio' construction phases in July 2012
for approx. EUR 150 million, more than half (EUR 340 million) of the
project volume is already being realised. The two building complexes can be
constructed without bank funding due to the purchase price instalments
agreed upon. Therefore the current bank loan for the MainTor Quarter can be
repaid pro rata; further borrowing or capital will thus not be necessary.
Let us recap:
- The development of the MainTor Quarter started in 2011 after the agreed
withdrawal of the tenant Evonik.
- A comprehensive marketing campaign ensured it attracted nationwide
attention. With a first forward deal (MainTor Primus) concluded last
summer, the demolition at the entire site started in 2011.
- A large-scale rental of around 13,600 sqm was realised for 'MainTor
Porta' at year-end, after which construction started on this building
complex.
- The laying of the foundation stone for 'MainTor Porta' on 29 August
2012 will launch the start of the first structural engineering
measures.
The DIC Asset AG share has significantly outperformed its benchmark indices
so far this year. Following an annual low of EUR 5.14 at the start of the
year, an interim annual high of EUR 7.40 was reached on 2 April. Equity
markets deteriorated again in the spring, so that the share ended the first
half-year at a price of EUR 6.80. However, it meanwhile reached a new
annual high of EUR 7.90 on 13 August.
Forecast for 2012: DIC Asset AG affirms its FFO forecast of EUR 43 million
to EUR 45 million for the 2012 financial year (2011: EUR 40.6 million).
Rental income is expected to increase to EUR 124 million to EUR 126 million
(2011: EUR 116.7 million), and the vacancy rate is planned to be reduced to
around 11.5 per cent by year-end (2011: 12.4 per cent).
Ulrich Höller, Chairman of the Management Board of DIC Asset AG, stated:
'We are very satisfied with this result. The positive trend seen in the
first quarter is stabilising in all business segments. In addition, the
MainTor project has already achieved extensive market breakthrough, with a
marketing result of more than 50 per cent.'
For more information on DIC Asset AG and the quarterly report, please visit
http://www.dic-asset.de/engl/.
About DIC Asset AG:
Established in 2002, DIC Asset AG, with registered offices in
Frankfurt/Main, is a real estate company with a dedicated investment focus
on commercial real estate in Germany, pursuing a return-oriented investment
policy. Real estate assets under management amount to approx. EUR 3.3
billion, comprising around 270 properties, of which EUR 2.2 billion is
carried on DIC Asset AG's statement of the balance sheet. The Company's
investment strategy is geared to the continued development of a
high-quality, highly profitable and regionally diversified portfolio. The
real estate portfolio is structured in two segments: the Commercial
Portfolio (EUR 1.9 billion) comprises existing properties with long-term
rental contracts generating attractive rental yields. The Co-Investments
segment (EUR 0.3 billion) comprises fund investments, joint-venture
investments, and interests in development projects. Own real estate
management teams provide a direct service to tenants through six branch
offices located at the regional hubs within the portfolio. This provides an
edge in terms of market presence and expertise, and builds the foundation
for maintaining and increasing the value of real estate assets. DIC Asset
AG has been included in the SDAX(R) segment of the Frankfurt Stock Exchange
since June 2006. The Company's shares are also included in the EPRA index,
which tracks the performance of the most important European real estate
companies.
Key financial indicators
Operating performance H1 H1 Q2 Q1
indicators(EUR mn) 2012 2011 2012 2012
Gross rental income 62.5 56.5 +11% 31.4 31.1 +1%
Fees from real estate 2.3 2.3 0% 1.1 1.2 -8%
management
Property disposal proceeds 2.9 9.3 -69% 0.1 2.8 -96%
Total revenues 78.2 76.0 +3% 38.8 39.4 -2%
Funds from Operations (FFO) 21.3 20.1 +6% 10.8 10.5 +3%
FFO per share (EUR) 0.47 0.47 0% 0.24 0.23 +4%
Profits on property disposals 0.6 0.6 0% 0.1 0.5 -80%
Cash flow from operating 21.3 19.3 +10% 8.612.7 -32%
activities
Statement of financial position 30.06.12 31.12.11End of Corporate News
key items (EUR mn)
Net debt equity ratio (%) 31.4 31.7
Investment property 1,914.8 1,902.1
Equity 625.3 624.2
Financial debt 1,520.9 1,521.9
Total assets 2,252.7 2,248.1
Cash and cash equivalents 74.8 100.2
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Language: English
Company: DIC Asset AG
Eschersheimer Landstr. 223
60320 Frankfurt
Germany
Phone: +49 69 9454858-0
Fax: +49 69 9454858-99
E-mail: info(at)dic-asset.de
Internet: www.dic-asset.de
ISIN: DE0005098404
WKN: 509840
Indices: S-DAX
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
München, Stuttgart
End of News DGAP News-Service
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