DGAP-News: ORCO Germany S.A.: Improved operational performance anchored on property investment activities
(firmenpresse) - DGAP-News: ORCO Germany S.A. / Key word(s): Interim Report
ORCO Germany S.A.: Improved operational performance anchored on
property investment activities
29.11.2013 / 18:22
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Interim Report as of 30 September 2013
Improved operational performance anchored on property investment activities
Berlin, November 29, 2013. Following ORCO Germany's deleverage through the
successful capitalization of its bonds and the refinancing of the GSG
portfolio in 2012, the Group focused its strategy on the value realization
of the Berlin portfolio through improved operational performance and asset
conversion into residential in the well regarded area of Kreuzberg Berlin).
The Group further improved its operational performance in the first three
quarters 2013. Year on year, the like for like rental revenue (i.e.
excluding the effects of the asset sold in 2012) increased by 4.0% bringing
the total to EUR 44.6 million including service charges to tenants
(compared to EUR 42.9 million in Q3 2012).
The net average commercial rent in Berlin rose to 5.25 EUR/sqm from 5.12
EUR/sqm last year. The commercial occupancy rate1 of the Berlin rental
portfolio increased from 82.0% end of 2012 to 84.9% end of September 2013.
Main assets contributing to the good results recorded in the first three
quarters 2013 are located in the western parts of Berlin. Especially
Kreuzberg assets performed very well and recorded an increase of net
average commercial rents from 5.98 EUR/sqm at the end of 2012 to 6.33
EUR/sqm in Q3 2013, while the commercial occupancy rate increased from
90.4% to 97.0%, leaving only limited spaces for further lease outs.
Financial highlights
Improved operational performance of rental portfolio and reduction of
interest expenses result in net profit of EUR 26.4 million.
Operating result
- For the 9 months period of 2013, the Group achieved a positive
operating result of EUR 37.1 million compared to an operating loss of
EUR 3.1 million for the same period of 2012.
- Total revenue decreased from EUR 48.6 million in Q3 2012 to EUR 44.6
million in Q3 2013 due to absence of EUR 5.6 million revenue generated
by Sky Office, sold in 2012. This was partially compensated by
improving occupancy in our Berlin renting portfolio complemented by
higher net average rates having a positive impact of EUR 2.3 million.
- The market value of our investment properties held steady compared to
June 2013, when a positive revaluation of EUR 15.8 million was
reported, mainly thanks to a good operational performance documented on
the Kreuzberg assets. No impairments were recognised in Q3 2013 while
2012 was impacted by impairment of Sky Office resulting from an
adjustment of the asset value to the estimated sales price (EUR 26.6
million).Previously initiated restructuring measures, better control of
building maintenance costs and major refurbishment performed in 2012
led to declining operational expenses (EUR 22.9 million in Q3 2013
compared to EUR 26.6 million over the same period in 2012). Consultancy
and other administration costs declined by EUR 0.5 million as a result
of the successfully accomplished refinancing of the ORCO-GSG portfolio
in December 2012 and respective non-recurring costs. The decrease isresulting also from the Sky Office disposal in 2012 (EUR 2.9 Million).
Financial result
- The interest expenses shrank significantly from EUR 19.5 million to EUR
9.5 million, as a result of (i) the successful bond restructuring, (ii)
the GSG refinancing at better rates and (iii) the repayment of the Sky
office loan.
- Smart strategy for hedging of interest rate risk brought additional
gain amounting to EUR 4.1 million in the other net financial result.
- In order to reflect longer than expected collection of receivables
related to sale of Leipziger Platz higher credit and litigation risk
margin have been integrated into the net present value inducing
impairments of EUR 6.4 million.
ORCO Germany delivered a net profit of EUR 26.4 million over the 9 months
2013 compared to a net loss of EUR 24.6 million in the corresponding 2012
period.
Outlook
Management continues to examine development potentials on its existing
assets whether empty land plots or buildings to be refurbished or
converted. On an opportunistic basis, limited acquisitions of
under-managed assets might be seized, specially in locations with a low
supply of spaces and high demand recognized. In its continuous review of
the development potential of the Berlin portfolio, the Group is beneath
others actively planning the development of a building - 'The Benjamin' -
on a land plot located next its Gebauer Höfe asset.
It remains the key Management target to grow ORCO Germany's recurrent
property investment income, which is the backbone of its business
activities.
Furthermore Management believes in the attractiveness of its portfolio and
the ability to increase rents especially in its western parts of the
portfolio, while further driving up occupancy rates on the assets located
in the eastern parts of its portfolio.
Over the next year ORCO Germany will also target to generate income from
asset management to third parties thus leveraging its position as Berlin's
biggest commercial landlord.
The enhanced operational performance is intended to be subsequently backed
by lower incurring administrative costs to operate the portfolio at an
optimized level.
About ORCO Germany
ORCO Germany S.A. is a property company that is listed in the General
Standard on the Regulated Market at Frankfurt Stock Exchange and has its
registered office in Luxembourg. The ORCO Germany Group, which acts
consistently under its registered name of ORCO Germany, has been operating
in Germany since 2004 and concentrates on commercial property and project
development.
ORCO Germany is a subsidiary of ORCO Property Group, which is one of the
leading Central European property companies. The ORCO Property Group,
established in 1991, is based in Luxembourg and has listings on NYSE,
EURONEXT Paris, Prague and Warsaw stock exchanges.
For further information please contact:
Kirchhoff Consult AG
Sebastian Bucher
Herrengraben 1
20459 Hamburg
T +49 40 60 91 86 18
F +49 40 60 91 86 60
E sebastian.bucher(at)kirchhoff.de
End of Corporate News
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Language: English
Company: ORCO Germany S.A.
42, rue de la Vallée
L-2661 Luxembourg
Grand Duchy of Luxembourg
Phone: +49 (0)30 390 93 116
Fax: +49 (0)30 390 93 199
E-mail: patricia.jaenisch(at)orco-gsg.de
Internet: www.orcogermany.de
ISIN: LU0251710041
WKN: A0JL4D
Listed: Regulierter Markt in Frankfurt (General Standard);
Freiverkehr in Düsseldorf, Stuttgart
End of News DGAP News-Service
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242514 29.11.2013
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Datum: 29.11.2013 - 18:22 Uhr
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