Earnings Release • Aug 13, 2009
Earnings Release
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Corporate | 13 August 2009 07:26
Fair Value REIT-AG improves H1 results
Fair Value REIT-AG / Half Year Results
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.
Munich, August 13, 2009 - Fair Value REIT-AG published its H1 results for
fiscal year 2009 today. Fair Value recorded a net rental result of EUR 4.0
million (IFRS) after deducting property-related operating expenses. The
previous year's figure of EUR 5.3 million is only comparable to a limited
extent as a result of the premature termination of a general rental
agreement against receipt of compensation payment in the previous year. In
the first half of 2009 Fair Value REIT-AG was able to improve its cost
structure and cut its administrative costs by 13% compared to the first six
months of the previous year.
As of June 30, 2009 the properties' valuation result totaled around EUR
-0.1 million. In the current year these comprise the calculatory reduction
in overrents and conversion activities that have been written off. In the
previous year, the net valuation result according to an external market
valuation of the properties in the middle of the year totaled EUR -2.2
million. As a result, the EBIT in H1 2009 totaled EUR 2.6 million (previous
year: EUR 1.5 million). In addition to rental income from directly held
properties, Fair Value REIT-AG generated additional income from its
majority and minority participations in a total of thirteen closed-end real
estate funds. The income from minority interests is carried under the
group's income from participations. During the period under review, income
from the current total of eight real estate funds increased by 4% to around
EUR 1.7 million. After deducting the financial result of EUR -2.6 million
(previous year: EUR 2.2 million), this resulted in consolidated net income
of EUR 1.7 million. Fair Value REIT-AG was thus able to record earnings per
share of EUR 0.18 in the first six months (previous year: EUR 0.08). As a
result of the positive consolidated net income, net asset value increased
slightly to EUR 8.28 per share in circulation (December 31, 2008: EUR
8.16).
Fair Value REIT-AG's operating earnings power becomes particularly obvious
when looking at the adjusted consolidated earnings. Without considering
extraordinary factors such as the market valuation of interest rate hedges
and of real estate, the company recorded consolidated net income of EUR 2.8
million (previous year: EUR 3.0 million) as of June 30, 2009. As a result,
the adjusted consolidated earnings after the first six months are higher
than the published forecast. The Managing Board has thus confirmed the
anticipated IFRS consolidated earnings of EUR 4.2 to EUR 4.5 million for
2009 as a whole, prior to the consideration of changes in the market value
of the real estate and interest rate swaps.
This is supported by the successes the group has enjoyed in its operating
business: A large number of lease extensions and new leases have caused the
proportion of rental agreements up for negotiation in 2009 to fall to 2.8%
of the total contractual rent. At the end of fiscal year 2008, the figure
for 2009 still totaled 6.7%. At the same time, the portfolio's rental level
increased slightly to 95% (December 31, 2008: EUR 94.9%).
Compared with December 31, 2008, total assets fell from EUR 198.2 million
to a current figure of EUR 190.7 million. This downturn was caused by a
redemption of VAT- and current financial liabilities. Due to the
prolongation of a loan the non-current financial liabilities were increased
to 94% from 83%. This has allowed Fair Value REIT-AG to create a financing
structure which is stable over the long term, as underscored by the equity
ratio of 52.9% of the immoveable assets as of June 30, 2009 within the
meaning of Section 15 of the REITG.
Frank Schaich, the company's CEO, believes that the results confirm Fair
Value REIT-AG's business model: 'Our portfolio is based on broad
foundations of 80 high-margin properties, which means that our risks are
highly diversified. The funds from operations (FFO) that we have recorded
also underscore our earnings strength. We lifted this figure significantly
in the first six months.' In the first six months of the current fiscal
year, the company increased its FFO by 60% to around EUR 2.1 million
(previous year: EUR 1.3 million) which was primarily due to an increase in
net cash provided by minority interests. The CEO also highlighted the
letting successes. 'Despite the tense economy, we have already been able to
conclude new leases and lease extensions that were up for negotiation,'
Frank Schaich explained. 'We believe that this proves a good relationship
with our tenants, which pay off especially in difficult markets.'
The full 2009 H1 report is available online at www.fvreit.de in the
Investor Relations section.
Company profile
Munich-based Fair Value REIT-AG focuses on the acquisition, leasing,
property management and sale of commercial properties in Germany. Its
investment activities focus primarily on offices, logistics and retail
properties in German regional centers. As a REIT-AG, Fair Value is not
subject to corporation or trade tax and benefits from the exit tax
privilege when purchasing properties. Fair Value's USP is that - in
addition to investing directly in real estate - it also acquires interests
in closed-end real estate funds.
In it's 'Participations' segment Fair Value currently holds interests in a
highly diversified portfolio of 48 properties with a total rental area of
413.658 m² and a market value of around EUR 499 million as of December 31,
2008 (Fair Value's interest in this portfolio currently totals around EUR
197.4 million).
In its 'Direct Investments' segment, Fair Value owns a portfolio of 32
commercial properties in Schleswig-Holstein. These have a rental area of
more than 42,948 m² and are mostly used as bank branches. These properties
had a total market value of around EUR 47.3 million as of December 31,
2008.
On June 30, 2009, Fair Value's share of the entire portfolio had a market
value of around EUR 245 million. As of June 30, 2009, this proportionate
portfolio had an occupancy level of 95.0% of the potential rent of EUR 21.0
million. The rental agreements had a weighted remaining term of 6.5 years
on June 30, 2009. Around 45% of the potential rent stem from retail
facilities, 40% from offices, 9% are from logistics facilities and 6% from
other facilities.
Contact
Investor & Media Relations
cometis AG
Dirk Stauer
Phone: +49(0)611 - 205855-22
Fax: +49(0)611 - 205855-66
E-mail: [email protected]
Language: English
Issuer: Fair Value REIT-AG
Leopoldstraße 244
80807 München
Deutschland
Phone: +49 (0)89 9292 815-01
Fax: +49 (0)89 9292 815-15
E-mail: [email protected]
Internet: www.fair-value-reit.de
ISIN: DE000A0MW975
WKN: A0MW97
Indices: RX REIT All Share Index, RX REIT Index
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in München, Stuttgart
End of News DGAP News-Service
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