DIC Asset AG with results for the first half of 2008:
DIC Asset AG / Interim Report
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Stable business model proving – FFO again increased– operating profit in line with figures in the first half of 2007 – weak investment market requires an update of the profit guidance
DIC Asset AG (German Securities ID 509840 / ISIN DE0005098404) today presented its interim report for the first half of the 2008 financial year. DIC Asset AG was once again successful in generating a stable return, in a market environment that remains challenging. Rental income was the main contributor to this result, with another strong (70 per cent) increase, to EUR 67.7 million.
EBITDA (earnings before interest, income taxes, depreciation and amortisation) rose by 26 per cent, to EUR 58.6 million (H1 2007: EUR 46.4 million). Cash flow from operations increased by EUR 27.7 million to EUR 62.4 million (H1 2007: EUR 34.7 million). Cash flow from operating activities (after interest and taxes paid) rose from EUR 20.3 million to EUR 23.3 million, up 15 per cent.
FFO (funds from operations, comprising earnings before depreciation taxes and gains on disposals and project development) was up strongly year-on-year, up 38 per cent to EUR 28.4 million (H1 2007: EUR 20.6 million). FFO per share increased by 26 per cent to EUR 0.91 (H1 2007: EUR 0.72). Operating profit before depreciation and amortisation (EBDA) was down 8 per cent, to EUR 25.9 million, equivalent to operating profit per share of EUR 0.83 (H1 2007: EUR 0.99). Reflecting the development of consolidated net income, earnings per share declined to EUR 0.37 (H1 2007: EUR 0.66).
The profit for the period remained below the figure reported for the first half of 2007. As a consequence of the more challenging financing environment and the slower transactions, DIC has adopted a strategy of being more selective with the sales activities. The company's focus on a limited number of selected transactions offering an attractive return was clearly reflected in the proceeds from sales, which were down to EUR 2.0 million in the first half of 2008 (H1 2007: EUR 84.6 million). In conjunction with higher financing costs, this resulted in a profit for the period of EUR 11.8 million (Q1 2007: EUR 19.2 million).
The lower level of sales also led to a decrease in total revenues for the first six months of 2008, to EUR 80.6 million (H1 2007: EUR 132.2 million). In contrast, the strong increase in rental income, to EUR 67.7 million (H1 2007: EUR 39.8 million), reflected the expansion in the real estate portfolio as well as successful letting activities. Rentals for a total of 118,300 square metres of floor space were contracted during the first six months of 2008 – up 72 per cent on the first half of 2007, and equivalent to EUR 11.0 million in annual rental income.
Reflecting the benefits of an efficient business structure and the reduced sales activities, total expenses were down by more than 50 per cent, to EUR 36.1 million (H1 2007: EUR 94.8 million). At the same time, the 49 per cent increase in staff and administrative expenses, to around EUR 7.7 million, was clearly lower than growth in rental income.
DIC Asset AG’s total assets slightly increased, to EUR 2.2 billion as at 30 June 2008.
Long-term assets rose from EUR 1.9 billion to EUR 2.1 billion. DIC Asset AG’s financing is long term secured. Long-term fixed interest rate agreements are in place for close to 90 per cent of financial debt of EUR 1.6 billion, with around 60 per cent having a maturity of over five years. Amounts due in the next 12 months only amount to approx. EUR 37.5 million (2 per cent), with approx. EUR 18.3 million (1 per cent) maturing in the next 1-2 years, approx. EUR 23.2 million (2 per cent) in the next 2-3 years, and approx. EUR 136.3 million (9 per cent) in the next 3-4 years.
DIC Asset AG will continue to focus on the asset and property management activities during the second half of 2008, with the objective of a sustained increase in rental income by the year-end. DIC will continue to pursue attractive acquisitions opportunities on a selective basis, to further grow the portfolio, e.g. out of distressed situations, which are expected for the next 18 month. While DIC Asset AG remains confident on the contribution to earnings from recurring rental income and the possibility of selected acquisitions, it is adopting a more conservative view towards the pace of realising gains on sale, also as result of deferred disposals. Taking into account the sales realised to date, and the consciously selective disposal strategy for the rest of the year 2008 adopted by DIC, the company currently expects a net profit at an attractive level of between EUR 25 million and EUR 27 million. (An earlier forecast made at the beginning of 2008 had indicated a range of EUR 39-41 million.) At EUR 53 million to EUR 55 million, full-year operating profit before depreciation and amortisation (EBDA) will be in line with the EUR 55,9 million figure reported in 2007.
Grünhof Eschersheimer Landstraße 223
60320 Frankfurt am Main
13.08.2008 Financial News transmitted by DGAP
Issuer: DIC Asset AG
Eschersheimer Landstr. 223
Phone: +49 69 9454858-0
Fax: +49 69 9454858-99
Listed: Regulierter Markt in Frankfurt (Prime Standard), Hannover, Hamburg; Freiverkehr in Berlin, Düsseldorf, München, Stuttgart
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