News Detail - DIC Assets

DIC Asset AG increases operating profit


DIC Asset AG / Key word(s): Half Year Results

14.08.2014 / 07:30


Press Release

Frankfurt, 14 August 2014

DIC Asset AG increases operating profit

- FFO up to EUR 23.6 million (H1 2013: EUR 23.1 million)

- Net equity ratio further improved to 33.3 per cent 
(31 Dec 2013: 32.6 per cent)

- Sales performance, with aggregate realised disposals of approximately EUR 60 million

- Forecast for 2014 FFO affirmed, at EUR 47 million to EUR 49 million
 

DIC Asset AG (German Securities ID A1X3XX / ISIN DE000A1X3XX4) today presented its interim report for the first six months of the 2014 financial year. The Company continued its earnings growth, paving the way for achieving full-year targets.
 

Continued growth in operating results

Gross rental income rose by 21 per cent during the first six months of the year, to EUR 73.6 million (H1 2013: EUR 61.0 million). Rental income from the joint-venture portfolio acquired at the end of 2013 more than compensated for the loss of rental income due to disposals.

Six-month FFO (funds from operations, defined as earnings before interest and taxes, and excluding profits from disposals and development projects) of EUR 23.6 million was up year-on-year (H1 2013: EUR 23.1 million), predominantly due to higher rental income. FFO per share (including the share capital increase at the end of 2013) amounted to EUR 0.34 as at 30 June 2014 (30 June 2013: EUR 0.49). The six-month profit for the period amounted to EUR 4.0 million as planned (H1 2013: EUR 6.5 million). The decline was primarily attributable to lower profits on property disposals as well as higher depreciation as scheduled, mainly due to investments on existing properties, which were completed at the end of 2013.
 

Full-year forecasts affirmed

DIC Asset AG affirms its FFO forecast of EUR 47 million to EUR 49 million for the 2014 financial year (2013: EUR 45.9 million). By year-end, the Company expects rental income of between EUR 145 million and EUR 147 million (2013: EUR 125.2 million).
 

Stable operative business

DIC Asset AG's successful letting performance during the first half of 2014 comprised contracts with an aggregate annualised rental income of some EUR 11.3 million (H1 2013: EUR 10.7 million), including EUR 5.5 million in new rentals and EUR 5.8 million in renewed rental agreements. The vacancy rate increased during the second quarter, in line with expectations, to 11.5 per cent (H1 2013: 11.1 per cent; Q1 2014: 11.1 per cent).

The Company already realised year-to-date aggregate disposals of approximately EUR 60 million, with numerous other transactions in pipeline. The total volume of disposals as at 30 June 2014 amounted to EUR 54 million (H1 2013: EUR 56 million), comprising seven properties; one additional sale took place after the reporting date. The selling prices achieved an average mark-up of around four per cent over the most recent market value determined.

DIC Asset AG's funds business continued to develop favourably. Despite the Company's lower stake (10 per cent) in its first special fund, FFO contributions from the funds business continued to grow, reaching EUR 2.7 million for the first six months of the year (H1 2013: EUR 2.5 million). After the reporting date properties with an aggregate value of EUR 60 million were acquired for the special AIFs, including the first purchase (EUR 32 million) for the newly-launched third fund "DIC Office Balance II" (as reported).
 

A well-structured financing mix

Total financial liabilities declined to EUR 1.716 billion as at 30 June 2014, (31 Dec 2013: 1.724 billion), including approximately EUR 37 million in repayments from disposals as well as scheduled redemptions. The average interest rate on financial debt regarding bank loans stood at 4.1 per cent as at 30 June 2014, unchanged from 31 December 2013. The average maturity of DIC Asset AG's financial debt declined to 4.0 years, as expected, from 4.5 years at the end of 2013.

Thanks to loan repayments and other measures to optimise the Company's financing structure, the net debt equity ratio showed a marked increase to 33.3 per cent as at 30 June 2014 (31 Dec 2013: 32.6 per cent). The net debt ratio based on the portfolio market value (loan-to-value ratio) declined by 0.5 percentage points, to 66.4 per cent (31 Dec 2013: 66.9 per cent).

The net interest result totalled EUR -34.0 million as at 30 June 2014 (H1 2013:
EUR -24.8 million). Interest expenses increased to EUR -38.9 million (H1 2013: EUR -30.0 million), due to last year's portfolio acquisition and the higher volume of bonds outstanding (up EUR 100 million). Interest income was down EUR 0.3 million year-on-year, to EUR 4.9 million, reflecting a lower level of borrowings.
 

Ulrich Höller, CEO of DIC Asset AG, said: "The first six months confirm the Company's positive development. We consistently pursue our targets for the year."

For more information on DIC Asset AG, please visit the Company's website www.dic-asset.de, where the half-yearly report is also available.
 

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 currently amount to approx. EUR 3.4 billion, comprising around 250 properties. 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 2.2 billion) comprises existing properties with long-term rental contracts generating attractive rental yields. The Co-Investments segment (pro-rata share of EUR 0.2 billion) comprises fund investments, joint-venture investments, and interests in development projects. DIC Asset AG provides a direct service to tenants through its own real estate management teams in six branch offices located at the regional hubs within the portfolio. This provides DIC Asset AG with an edge in terms of market presence and expertise, and builds the foundation for maintaining and increasing income - and the value of its 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.
 

Press contact:

Thomas Pfaff Kommunikation
Höchlstrasse 2
81675 Munich, Germany
Phone: +49 89 992496-50
Mobile: +49 172 8312923
kontakt@pfaff-kommunikation.de


Investor Relations

Peer Schlinkmann
Neue Mainzer Strasse 20 - MainTor
60311 Frankfurt/Main, Germany
Phone: +49 69 274033-1221
Fax +49-69-274033-9399
P.Schlinkmann@dic-asset.de



Key financial indicators

Financial indicators (EUR mn) H1 2014 H1 2013   Q2 2014 Q1 2014  
             
Total income 114.4 111.9 +2% 52.3 62.1 -16%
Gross rental income 73.6 61.0 +21% 36.8 36.8 ±0%
Fees from real estate management 2.3 3.1 -26% 1.2 1.1 +9%
Property disposal proceeds 19.6 37.1 -47% 3.5 16.1 -78%
Profits on property disposals 0.6 1.7 -65% -0.1 0.7 >-100%
Funds from Operations (FFO) 23.6 23.1 +2% 11.6 12.0 -3%
             
Financial indicators per share (EUR) H1 2014 H1 2013   Q2 2014 Q1 2014  
             
EPRA earnings* 0.34 0.46 -26% 0.17 0.17 ±0%
FFO* 0.34 0.49 -31% 0.16 0.18 -11%

* Based on the new average number of shares outstanding, in accordance with IFRS

 

Statement of financial position - key items (EUR mn) 30 June 2014   31 Dec 2013
       
Net debt equity ratio (%) 33.3   32.6
Loan-to-value ratio (LTV) (%) 66.4   66.9
Investment property 2,209.8   2,256.4
Equity 790.1   793.1
Financial debt 1,716.0   1,723.9
Total assets 2,587.4   2,596.0
Cash and cash equivalents 92.4   56.4
 

 





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