LEG Immobilien AG; Correction: Successful strategy: LEG records significant growth in operating earnings (FFO) in the 2012 fiscal year
(firmenpresse) - (DGAP-Media / 30.04.2013 / 09:00)
Successful strategy: LEG records significant growth in operating earnings
(FFO) in the 2012 fiscal year
- Group transformation successfully completed: Significant increase of
22.2% in FFO I to EUR136.5 million
- Healthy letting business: Vacancy rate drops to 3.1%; occupancy rate is
96.9%
- Strong balance sheet: Low gearing (LTV) of 47.9% forms the basis for
further growth
- Growth strategy confirmed: Negotiations on the acquisition of an
attractive portfolio enter the final stage
Dusseldorf, 30th April 2013 - In 2012, LEG Immobilien AG successfully
completed the comprehensive transformation set out in its corporate
strategy and again improved its operational and financial key figures.
Rental income for the LEG Group as a whole increased by 1.8% to EUR344.2
million (previous year: EUR338.2 million). This was driven in part by a
further reduction in the vacancy rate, which declined significantly from
3.6% to 3.1% at year-end 2012. For 2013, LEG is forecasting accelerated
rental growth as a result of catch-up effects and the non-recurring effects
recorded in the previous year. These effects should be seen in conjunction
with the new rent indexes that have been announced and the extraordinary
reduction in the cost of rent as a result of the early refinancing of
subsidized loans. Describing the letting strategy, COO Holger Hentschel
commented: 'A clearly defined market, local presence, extensive market
expertise and a high-quality portfolio are what ensures our continuously
strong letting performance.'
Investments in modernization and maintenance amounted to EUR76.9 million in
2012 (previous year: EUR81.9 million), corresponding to an investment
volume of EUR12.90 per square meter of residential space. 'Investments
remained at a high level and form the basis for the further value
enhancement of the portfolio,' commented Holger Hentschel (COO).
Positive consolidated net profit underlines effective business model
Operating earnings adjusted for extraordinary factors (EBITDA) saw
above-average growth of 5.9% to EUR223.1 million in 2012 (previous year:
EUR210.6 million). In addition to rental growth, a higher share of
capitalized investments was the main growth driver.
Successful reorganization: Growth of 22.2% in funds from operations (FFO I)
The most important key performance indicator, FFO I (funds from operations
excluding funds and net income from disposals), increased significantly by
22.2% to EUR136.5 million in 2012 (previous year: EUR111.8 million).
Adjusted for a non-recurrent tax effect, the FFO I amounted to EUR133
million. This also highlights the positive effects of the reorganization on
the Company's long-term earnings situation. The refinancing of around EUR2
billion meant that cash interest expenses fell by EUR7.3 million
year-on-year to EUR90.1 million, thereby making a significant contribution
to this positive earnings performance. Interest rate hedges protecting
against changes in interest rates have been concluded for 97% of the
Company's total financing. 'With an average term of 12 years and low
financing costs of 3.3%, the financing structure is a stable pillar for
high profitability and earnings visibility,' noted CFO Eckhard Schultz.
IFRS consolidated net profit also confirms the positive earnings trend.
Despite non-recurring expenses in connection with the reorganization,
consolidated net profit was positive at EUR112.1 million (previous year:
EUR-15.1 million). The positive operating development (lower vacancy rates,
higher rental income and the acquisition of 1,244 residential units in
Bocholt in October 2012) were also reflected in the positive portfolio
valuation results of EUR120.3 million.
On the day this report was published, net asset value in accordance with
the EPRA standard (EPRA NAV) amounted to EUR2,368.3 billion (EUR44.72 per
share) and remained largely unchanged to the previous year (2011:
EUR2,384.4 billion). In early 2013, a shareholder loan was converted to
equity; this had a positive effect of around EUR40 million on NAV. The
equity ratio amounted to 39.8% in 2012, while gearing (loan-to-value - LTV)
was a low 47.9%. This secures the Company's defensive risk profile and
forms the basis for future growth.
CEO Thomas Hegel: 'In the past year, the Company has overcome significant
internal challenges, such as the introduction of new SAP ERP software, the
transition to IFRS and, in particular, preparations for the IPO. In light
of these factors, we are particularly satisfied with our clearly positive
earnings performance. The LEG team has demonstrated the effectiveness of
our business model.'
On the basis of this positive earnings development, the Management Board
will propose the payment of an initial dividend of EUR0.41 per share to the
Annual General Meeting. This corresponds to 16% of FFO I in the 2012
financial year. A distribution ratio of 65% of FFO I is planned from 2013
onwards.
Focus on growth strategy: Acquisition in a core region is in a very late
stage
'LEG's business model is dedicated to growth. The Company plans to acquire
around 10,000 residential units by the end of 2014. The cash and cash
equivalents held by the Company will provide the equity component of these
potential acquisitions. With its scalable, fully integrated property
management platform, between 20,000 and 25,000 residential units can be
integrated into the LEG Group's structure in its core region of North
Rhine-Westphalia without this requiring significant additional personnel
and organizational costs,' explained CEO Thomas Hegel.
Negotiations with the seller on the acquisition of an additional
residential portfolio in North Rhine-Westphalia have entered the final
phase. The portfolio consists of more than 2,000 residential units and
offers considerable synergies with LEG's existing portfolio. This
transaction will also meet LEG's ambitious financial target criteria for
acquisitions with further potential for value enhancement. CEO Thomas
Hegel: 'Our extensive local market expertise and financial strength means
that we enjoy significant competitive advantages when it comes to external
growth. Our financial flexibility helps us to become the exclusive
negotiation partner for sellers at an early stage.' LEG's acquisition
pipeline also contains a number of different portfolios that have been
selected on the basis of clearly defined target criteria, including a
further small portfolio that is under exclusive examination. This means
that LEG is continuing on the growth path that began with the acquisition
of 1,244 residential units in Bocholt in October 2012. These units were
rapidly integrated into LEG and their operational performance is already
exceeding expectations.
Outlook
LEG Immobilien AG is confirming its target of organic rental growth of
between 2% and 3% for the 2013 fiscal year and expects to generate
operating earnings (FFO I) of EUR137-140 million. This forecast does not
include the impact of future acquisitions. Investments will again amount to
around EUR13 per square meter of residential space.
The Annual Report, containing the audited annual financial statements of
LEG Immobilien AG, is as of today available for download at www.leg-nrw.de.
Investor Relations/Press Contact:
Burkhard Sawazki/Manfred Neuhöfer
Tel. +49 211 45 68-204/-325
E-mail: burkhard.sawazki(at)leg-nrw.de, manfred.neuhoefer(at)leg-nrw.de
About LEG
With around 91,000 rental properties and 250,000 tenants, LEG is one of
Germany's leading housing companies. It has a comprehensive presence in
North Rhine-Westphalia, with nine branches, 16 customer centers and around
100 tenant offices, and offer personal local contact. LEG generated rental
and letting income of around EUR500 million in the 2012 fiscal year.
End of Media Release
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Issuer: LEG Immobilien AG
Key word(s): Real estate
30.04.2013 Dissemination of a Press Release, transmitted by DGAP - a
company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
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Language: English
Company: LEG Immobilien AG
Hans-Böckler-Straße 38
40476 Düsseldorf
Germany
Phone: +49 (0) 211 / 4568 - 0
Fax: +49 (0) 211 / 4568 - 261
Internet: www.leg-nrw.de
ISIN: DE000LEG1110
WKN: LEG111
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Stuttgart
End of News DGAP-Media
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