Letter to Shareholders: DIC commences share buyback programme
DIC Asset AG / Share Buyback
Release of a Corporate News, transmitted by DGAP - a company of EquityStory
AG.
The issuer / publisher is solely responsible for the content of this announcement.
----------------------------------------------------------------------
Dear Shareholders,
like all of us, you will without doubt currently be keeping a watchful eye
on the dramatic extent to which the crisis on the international financial
markets is also putting pressure on stock exchanges around the world.
Besides securities, real estate shares too are being particularly badly
affected by this. The shares of our company are likewise not immune to this
trend; this is because analysts and investors have virtually no chance to
differentiate clearly between the individual securities given the new
developments which are occurring on a daily basis.
Of course, we have no influence over developments on the financial and
capital markets. However, the management of our company is actively taking
up these challenges and displaying its capacity to act in terms of
operations. We would therefore like to inform you in detail of our latest
measure, how the company is performing at present and also notify you of
the steps we are taking:
• Against the background of the very negative performance of our share
price at present, which – as a result of market uncertainty - has moved
sharply away from the intrinsic value of the shares and from our NAV which
we anticipated, we have agreed with our Supervisory Board to implement a
share buyback programme, and published this yesterday evening in the form
of an ad hoc disclosure. We will buy back own shares amounting to up to 5
percent of our share capital, via the stock market. This share buyback is
limited to 10 February 2009. By taking this measure, we as a company are
safeguarding the interests of our shareholders by seeing a good opportunity
to increase our equity value per share. However, at the same time we would
like to therefore point out that the current share price has moved a long
way from the fundamental data and company’s sustained performance over a
number of years. Because our business policy has always been conservative
and guided by high quality standards, we are consequently able to maintain
the necessary freedom to take action and make decisions.
• With our business model focused on the German commercial real estate
market, we are active in a market which – in comparison to the
international market situation – remains the most robustly positioned.
• Rentals on the German commercial real estate market are currently stable;
despite the increase of the last two years, letting figures in the various
sub-markets are falling well short of their highest level and are instead
on a par with those of the mid-90s. As of 30 September 2008, we were able
to let 158,000 sqm in total, and we expect this positive trend to continue
for our company and our portfolio as well. Our broadly diversified tenant
structure in this context serves as the best possible basis for solid and
sustainable cash flows which have always been a permanent feature of our
business model.
• In the first three quarters of this year, we expect to generate rental
income of around EUR 100 million based on the successful letting
activities, equivalent to an increase of 55 percent as compared to the same
period last year. This illustrates the fact that, in these challenging
markets especially, DIC Asset AG’s active property management and
internally-managed business model has proved successful in operating terms.
• Even though the sharp fall in the overall number of real estate
transactions is a trend which we too have had to take into account in the
last few months, we have nevertheless managed to complete 12 sales to date,
raising a total of EUR 55 million in the process. In the last three months
in particular, the sale of six smaller to more medium-sized properties
showed that a change to the sales strategy coupled with direct market
proximity will pay off, even in these difficult markets.
• Because sales volumes per se do not represent a quality criterion, we are
focusing exclusively on transactions which – in terms of volume and the
financing capacity of the buyers - are adjusted to the current market
conditions, and with which adequate profits for our company can be
achieved. The aforementioned sales, of which a share of EUR 28 million is
accounted for by DIC Asset AG, gave us profits of some EUR 5 million in
total in the third quarter, thereby allowing us to exceed our most recent
market value assessment. Furthermore, following repayment of the
corresponding loans, these sales resulted in a capital inflow of around EUR
8 million for our company.
• In the current financial market turbulence, we would like to emphasise in
particular our stable financing with long-term guarantees. In the past, we
have always agreed long-term fixed interest periods, and only three percent
of our financing volume is due for refinancing within the next two years.
In the subsequent third and fourth years too, this figure will only stand
at two and nine percent respectively. This highlights our more than solid
positioning with our financing structure and shows that during these
turbulent times, we are able to focus first and foremost on operating
business.
• Finally, our own equity situation is strong and will keep on getting
stronger thanks to the sales mentioned above and cash inflows from letting
activities.
All of the experts assume that the financial crisis will bring about
structural changes worldwide. We are confident that DIC Asset AG is one of
the companies that will come through the crisis in a stable condition and
will then be able take advantage in the long term of the resultant
possibilities in a consolidating market. The developments and results from
our operating activities which we have outlined are evidence that we will
be able to publish a set of results for the third quarter on 12 November
which will correspond positively to the expectations we have set.
In recent days especially, we have received many enquiries from
shareholders asking us for our view of the market conditions and the
effects on our company. We are pleased that these matters are being
discussed and we will continue to discuss them with you in an open and
transparent manner over the coming months.
Yours faithfully
Ulrich Höller Markus Koch Dr. Jürgen Schäfer
(Members of the boards of DIC Asset AG)
10.10.2008 Financial News transmitted by DGAP
----------------------------------------------------------------------
Language: English
Issuer: DIC Asset AG
Eschersheimer Landstr. 223
60320 Frankfurt
Deutschland
Phone: +49 69 9454858-0
Fax: +49 69 9454858-99
E-mail: info@dic-asset.de
Internet: www.dic-asset.de
ISIN: DE0005098404
WKN: 509840
Indices: S-DAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), Hannover,
Hamburg; Freiverkehr in Berlin, Düsseldorf, München,
Stuttgart
End of News DGAP News-Service
---------------------------------------------------------------------------
