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DEMIRE Deutsche Mittelstand Real Estate AG
Earnings Release • Mar 18, 2020
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Earnings Release
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Corporate | 18 March 2020 06:58
DEMIRE Deutsche Mittelstand Real Estate AG: DEMIRE records a record year 2019: FFO I up by 47.7 percent to EUR 34.5 million
DGAP-News: DEMIRE Deutsche Mittelstand Real Estate AG / Key word(s): Annual Results/Forecast
18.03.2020 / 06:58
The issuer is solely responsible for the content of this announcement.
DEMIRE records a record year 2019: FFO I up by 47.7 percent to EUR 34.5 million
– Portfolio value grows to EUR 1.5 billion
– Diluted EPRA NAV increases by 15 percent to EUR 6.32 per share
– FFO I guidance for 2020 at EUR 40 to 42 million
Langen, 17 March 2020 – DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) has achieved significant growth in the 2019 financial year and posted a record result. All key operating and portfolio-related indicators were significantly improved. With its 2019 results, DEMIRE impressively underscores its objectives, which focus on continuous growth of the portfolio and steady improvement of the financial structure.
Significant growth through REALize Potential strategy
Funds from Operations I (FFO I, before minorities, after taxes) rose to EUR 34.5 million in the year under review, or by 47.7 percent compared to 2018 (EUR 23.4 million) and is thus at the upper end of the guidance. In the same period, DEMIRE recorded an 11.0 percent increase in rental income to EUR 81.8 million (2018: EUR 73.7 million). Earnings before interest and taxes (EBIT) totalled EUR 155.2 million, up 22.1 percent on the previous year (EUR 127.1 million).
DEMIRE’s portfolio value increased by EUR 354.0 million to EUR 1,510.2 million euros compared to 2018 – despite strategic adjustments to the portfolio through sales totalling EUR 46.1 million. The diluted EPRA NAV rose by 15.0 percent to EUR 6.32 per share (2018: EUR 5.40).
With 172,699 m², DEMIRE also achieved a record letting performance. The previous year’s figure (82,559 m²) was exceeded by 109.2 percent. Due to the portfolio growth and the acquisition of properties with potential, the EPRA vacancy rate rose from 7.5 to 9.4 percent. Of this, around 1.5 percentage points are linked to the property in Bad Vilbel alone, which has already been newly let from mid 2020 onwards. WALT achieved an increase of 0.3 to 4.8 years. The pleasing valuation result of EUR 83.0 million reflects the positive operating performance on the portfolio.
Financing costs significantly reduced
“An integral part of our strategy is the further optimisation of our financing structure and the associated reduction of financing costs in a favourable interest rate environment”, explains Tim Brückner, CFO of DEMIRE. As of December 31, 2019, the average nominal cost of debt decreased by 116 basis points from 3.00 to 1.84 percent compared to the previous year. This development is mainly due to the successful issue of the corporate bond 19 / 24 with simultaneous repayment of the remaining bond 17 / 22 and a promissory note loan. The net loan-to-value (net LTV) was at 46.7 percent at the end of 2019.
Growth path to continue in 2020
The board of DEMIRE expects to be able to continue its successful growth course in 2020, assuming that the economic conditions remain appropriate. For fiscal year 2020, the company guides the rental income of EUR 90.0 to 92.0 million from the letting of the property portfolio, considering already notarised acquisitions and sales. Active property management, including further reduction of vacancies, should support the increase in rental income. On that basis, DEMIRE guides a further increase in FFO I earnings to a range of EUR 40.0 to 42.0 million for 2020.
Ingo Hartlief, CEO of DEMIRE, states: “The record year 2019 underlines the effectiveness of our comprehensive REALize Potential strategy, which encompasses acquisitions, management, financials and processes. In the medium term, we aim to increase the value of the portfolio to EUR 2 billion through further acquisitions and by exploiting the existing value enhancement potential”.
The economic impact of the corona virus pandemic cannot be predicted at present, but DEMIRE is relatively protected due to the diversification of the portfolio. “We are confident that we will be able to continue the positive development of 2019 in the current financial year. It goes without saying that we will continually review our assumptions as part of our risk management in order to make adjustments and take precautionary measures if necessary,” says Ingo Hartlief.
The 2019 annual report is available for download in the Investor Relations section of the company’s website: https://www.demire.ag/en/investor-relations/reports-results/2019
Invitation to a Conference Call on 18 March 2020
The Management Board of DEMIRE invites all interested parties to attend the presentation of the 2019 annual report during a conference call on 18 March 2020 at 10:00 CET.
To dial in, please use the following phone numbers:
Germany: +49 (0)69 2222 2018
United Kingdom: +44 (0)330 336 9411
United States: +1 929 477 0324
PIN: 89008887
The presentation of the quarterly financial report will also streamed as a live webcast. Please use the link https://webcasts.eqs.com/demire20200318/no-audio
For the audio broadcast, please use the dial-in numbers listed above. A presentation will be available on https://www.demire.ag/en/investor-relations/reports-results/2019
Selected Key Performance Indicators of DEMIRE Group
| 01/01/2019- 31/12/2019 |
01/01/2018- 31/12/2018 |
|
| Consolidated income statement (in EURm) |
||
| Rental income | 81,8 | 73,7 |
| Net income from the rental of real estate | 65,5 | 58,5 |
| Fair-value adjustments on investment properties |
83,0 | 93,1 |
| General administrative overhead and other operating expenses | 13,9 | 25,2 |
| EBIT | 155,2 | 127,1 |
| Financial results | -57,3 | -38,3 |
| Profit/loss for the period after tax | 79,7 | 69,1 |
| – thereof attributable to shareholders of the parent company | 75,5 | 61,6 |
| FFO I (after tax, before minority interests) | 34,5 | 23,4 |
| FFO II (after tax, before minority interests) | 45,7 | 23,4 |
| Basic/Diluted earnings per share (in EUR) | 0,70/0,70 | 0,85/0,85 |
| Consolidated accounts (in EURm) | 31.12.2019 | 31.12.2018 |
| Total assets | 1.677.4 | 1,378.7 |
| Investment properties | 1.493.9 | 1,139.9 |
| Cash and cash equivalents | 102,1 | 190,4 |
| Properties held for sale | 16,3 | 12,3 |
| Shareholders’ equity (incl. non-controlling shareholders) | 660,8 | 582,3 |
| Equity ratio (in % of total assets) | 39,4 | 42,2 |
| Undiluted/diluted EPRA-NAV | 684,1/684,6 | 595,2/595,7 |
| EPRA-NAV per share (EUR, basic/diluted) | 6,35/6,32 | 5,52/5,50 |
| Net financial liabilities | 704.8 | 446.1 |
| Net debt-to-equity ratio (net LTV), in % | 46.7 | 38.7 |
| Portfolio key ratios | 31.12.2019 | 31.12.2018 |
| Properties (number) | 90 | 84 |
| Market value (in EURm) | 1.488,4 | 1.152,1 |
| Annualised gross rental income (in EURm) | 90,0 | 73,2 |
| Rental yield (in %) | 6,0 | 6,5 |
| EPRA vacancy rate (in %) * | 9,4 | 7,5 |
| WALT (in years) | 4,8 | 4,5 |
* Excluding assets held for sale
Investor Relations
DEMIRE Deutsche Mittelstand Real Estate AG
Michael Tegeder
Head of Investor Relations & Corporate Finance
Tel.: +49 6103 372 49 44
Email: [email protected]
About DEMIRE Deutsche Mittelstand Real Estate AG
DEMIRE – REALize Potential
DEMIRE Deutsche Mittelstand Real Estate AG acquires and holds commercial real estate holdings in mid-sized cities and up-and-coming locations bordering German metropolitan areas. The Company’s specific forte is its focus realising asset-based potentials on these second-tier cities – its claim being “REALize Potential” – and on a range of assets that appeals to both internationally active and regionally rooted tenants. After acquiring an office and a department store portfolio as well as a distribution centre over the course of 2019, along with the profitable divestment of smaller, non-strategic assets, DEMIRE holds a portfolio of 90 properties with a combined lettable area of around 1.1 million m² and a market value of about EUR 1.5 billion (as of 31 December 2019).
The portfolio focus is on office with addition of attractive retail, hotel and logistics assets results in exactly the kind of risk/return structure that DEMIRE considers appropriate for the business line of commercial real estate. The Company puts a premium on long-term contracts with solvent tenants and realising potential in anticipation of stable and sustainable rental revenues. For further growth, DEMIRE intends to acquire strong, cash-generating assets bearing potential, while non-strategic properties will be divested. DEMIRE has set itself the goal to keep optimising its corporate structure. To this end, it pursues an active property management approach, convinced that it is the best way to achieve economies of scale and portfolio optimisations.
DEMIRE Deutsche Mittelstand Real Estate AG shares (ISIN: DE000A0XFSF0) are listed in the Prime Standard segment of the Frankfurt Stock Exchange.
Contact:
Michael Tegeder
Head of Investor Relations & Corporate Finance
DEMIRE Deutsche Mittelstand Real Estate AG
Telefon: +49 6103 372 4944
Email: [email protected]
18.03.2020 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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| Language: | English |
| Company: | DEMIRE Deutsche Mittelstand Real Estate AG |
| Robert-Bosch-Straße 11 im ‘the eleven’ | |
| 63225 Langen (Hessen) | |
| Germany | |
| Phone: | +49 6103 37249-0 |
| Fax: | +49 6103 37249-11 |
| E-mail: | [email protected] |
| Internet: | www.demire.ag |
| ISIN: | DE000A0XFSF0 |
| WKN: | A0XFSF |
| Listed: | Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Stuttgart, Tradegate Exchange |
| EQS News ID: | 1000023 |
| End of News | DGAP News Service |