Earnings Release • Oct 27, 2015
Earnings Release
Open in ViewerOpens in native device viewer
Regulated information under embargo until 27.10.2015, 8 am
Antwerp, 27 October 2015
Interim statement of the board of directors as at 30 September 2015 for the third quarter of financial year 2015
The operating distributable result per share amounted to € 0,47 in the third quarter of 2015, compared with € 0,37 in the third quarter of 2014. The increase of € 0,10 per share mainly arose from the increase in rental income attributable to the acquisition of the logistics
sites in Opglabbeek in December 2014 and in Liège in February 2015, and from the decrease in financing costs for the company due to the refinancing at a lower interest rate of the bond loan of € 75 million which expired in June 2015 and was repaid.
Rental activity of Intervest Offices & Warehouses in the third quarter of 2015 was mainly aimed at leasing to new tenants. In the logistics segment, 3 rental transactions were entered into with new tenants for an annual rental volume of about € 0,4 million. These new leases concern vacant units and therefore have a positive effect on the occupancy rate. In the office portfolio 5 rental
transactions were entered into with new tenants for an annual rental volume of about € 0,3 million.
Prolongations of existing rental agreements remained limited in the office market as well as in logistic real estate in the third quarter of 2015.
| REAL ESTATE PATRIMONY | 30.09.2015 | 30.06.2015 | 31.12.2014 | 30.09.2014 |
|---|---|---|---|---|
| Fair value of investment properties (€ 000) | 636.091 | 635.726 | 609.476 | 575.828 |
| Investment value of investment properties (€ 000) |
651.993 | 651.619 | 624.713 | 590.224 |
| Occupancy rate1 (%) | 89% | 88% | 87% | 85% |
| Total leasable space (m²) | 716.913 | 716.913 | 674.156 | 596.714 |
| Yield on investment value (%) | 7,6% | 7,6% | 7,5% | 7,3% |
| Yield on investment value in case of full lease (%) | 8,6% | 8,6% | 8,6% | 8,6% |
In the first nine months of 2015 the fair value of the investment properties of Intervest Offices & Warehouses increased by € 27 million compared to the fair value as at 31 December 2014 and amounted to € 636 million as at 30 September 2015 (€ 609 million as at 31 December 2014). This increase is primarily the result of the acquisition of the logistics site in Liège for € 28,6 million in February 2015 and of the sale of the semi-industrial building in Duffel (with a fair value of € 3,7 million as at 31 December 2014). The fair value of the existing real estate portfolio (not taking into account investments and divestments) dropped by € 2 million or 0,4% in the first nine months of 2015, primarily in the office portfolio by 1%. The fair value of the logistics portfolio increased by 0,4%. The fair value of the existing real estate portfolio remained almost stable in the third quarter of 2015.
As at 30 September 2015, the occupancy rate of the overall real estate portfolio of Intervest Offices & Warehouses amounted to 89% (87% as at 31 December 2014). This improvement of the occupancy rate by 2% is primarily the result of the acquisition of the logistics site in Liège, the sale of a non-strategic semiindustrial building in Duffel and of new leases in the logistics segment. In the third quarter of 2015 the total occupancy rate of the real estate portfolio increased by 1% to 89% (88% as at 30 June 2015) through new leases.
1 The occupancy rate is calculated as the ratio between the commercial rental income and the sum of this income and the estimated rental value of unoccupied rental premises. Commercial rental income is the contracted rental income plus the rental income from signed contracts with regard to space that is contractually unoccupied at the balance sheet date.
Interim statement of the board of directors as at 30 September 2015 for the third quarter of financial year 2015
In mid-August, the offices of Intervest Offices & Warehouses moved to the fifth and sixth floors of the renovated office building Sky Building, number 66, on Uitbreidingstraat in Berchem (Antwerp). After a thorough renovation of the technical systems and the interior, most existing tenants have now moved to their new premises in the building on the second, third and fourth floor. An additional lease and the provision of ironing services mean that floors two to six are now fully occupied. On the ground floor and the first floor, plans have been made to set up a second "RE:flex - flexible business hub" with co-working spaces, meeting rooms and catering facilities. Implementation of these plans is expected to start in 2016.
For the renovation, Intervest Offices & Warehouses worked according to its own tried and tested turnkey solutions approach. Here, a specialised and complementary team offers a fully bespoke solution, ranging from fitting-out plans and supervision of the works to coordination of the occupancy process, and closely monitors the pre-set timeframe and appointed budget.
In addition to the renovation of the technical systems and the interior, there are also plans to dress up the exterior. The application for the permit was submitted in July 2015, and in case of favourable advice work can be started in the last quarter of 2015.
The registered office of Intervest Offices & Warehouses has been the Sky Building, property of Intervest Offices & Warehouses, Uitbreidingstraat 66, 2600 Berchem (Antwerp) since 17 August 2015.
Intervest Offices & Warehouses, Sky Building, Berchem
Interim statement of the board of directors as at 30 September 2015 for the third quarter of financial year 2015
Intervest Offices & Warehouses has received a 'Gold award' from EPRA for its 2014 annual report.
EPRA is the European Public Real Estate Association, and it issues recommendations to increase the transparency and consistency of financial reporting, the so-called BPR (Best Practices Recommendations). For the past year, EPRA scrutinised about a hundred annual reports from listed real estate funds everywhere in Europe, and it granted an award to just over half (57%).
33 companies managed to obtain a Gold award. Intervest Offices & Warehouses is one of the few companies which have gone up a category in comparison to last year, i.e. from silver to gold. Just 7 such Gold awards were awarded. It is an acknowledgement of the continuous effort that Intervest Offices & Warehouses makes to ensure consistent and transparent financial reporting.
Liège, Herstal
Interim statement of the board of directors as at 30 September 2015 for the third quarter of financial year 2015
For the first nine months of 2015 rental income of the real estate company amounted to € 34,6 million and thus increased by 16% or approximately € 4,8 million compared to the first nine months of 2014 (€ 29,8 million), mainly as a result of the acquisition of the logistics sites in Opglabbeek in December 2014 and in Liège in February 2015. Both sites generate a combined annual rental income of approximately € 5,3 million. Rental income for the office portfolio in the first nine months of 2015 increased slightly compared to the first nine months of 2014 as a result of indexations and leases.
The recovery of property charges included income in the amount of € 3,0 million (€ 0,5 million) in the first nine months of 2015, which relates mainly to the profit taken from allocated refurbishment fees of departing tenants in the office portfolio. At the beginning of 2015 Intervest Offices & Warehouses reached an agreement with tenant Deloitte to have the departure dates for the 3 buildings in question (Diegem Campuses 1 and 2 and Hermes Hills, a total of approximately 20.000 m²), which originally ran until 2016 and 2017, coincide and set at 31 December 2016. Another agreement has also been concluded within this context to fix the refurbishment fee at € 2,5 million, which tenant Deloitte will pay in the course of 2016. This fee will be used to refurbish and renovate buildings.
As at 30 September 2015, property charges of the company amounted to € 4,2 million (€ 3,3 million). The increase is mainly the result of the acquisition of the two logistics sites, the renovation of a number of roofs with sustainable roofing, the rebranding of the entrances at the Intercity Business Park in Mechelen and a larger workforce for property management.
General costs amounted to € 1,3 million in the first nine months of 2015 and are in line with the first nine months of 2014 (€ 1,2 million).
The increase in rental income and the allocated refurbishment fees from departing tenants, partly compensated for by the increase in property charges, caused the operating result before result on portfolio to increase by 24% or € 6,2 million to € 32,0 million (€ 25,8 million).
The changes in fair value of investment properties
amounted to - € 2,2 million (- € 4,6 million) in the first nine months of 2015. The fair value of the existing real estate portfolio (not taking into account investments and divestments) dropped in the first nine months of 2015, primarily in the office portfolio by 1%. The fair value of the logistics portfolio increased by 0,4%.
39) for the first nine months of 2015 amounted to - € 8,5 million compared to - € 8,8 million in the first nine months of 2014. The average interest rate for the company for the first nine months of 2015 was approximately 3,7% (4,1%), including bank margins. The decrease of the average interest rate is mainly the result of the refinancing at lower interest rates of the bond loan of € 75 million which expired in June 2015 and was repaid.
The changes in fair value of financial assets and liabilities (ineffective hedges - IAS 39) included the decrease in the negative market value of the interest rate swaps which, in line with IAS 39, cannot be classified as cash flow hedging instruments, in the amount of € 0,4 million (- € 0,7 million).
Opglabbeek
Interim statement of the board of directors as at 30 September 2015 for the third quarter of financial year 2015
The net result of Intervest Offices & Warehouses for the first nine months of 2015 amounted to € 21,3 million (€ 11,5 million) and may be divided into:
Taking into account 16.239.350 dividend-entitled shares, this means that there is an operating distributable result per share of € 1,43 (€ 1,15) for the first nine months of 2015.
| KEY FIGURES PER SHARE | 30.09.2015 | 31.12.2014 | 30.09.2014 |
|---|---|---|---|
| Number of shares entitled to dividend | 16.239.350 | 14.777.342 | 14.777.342 |
| Weighted average number of shares | 16.187.957 | 14.672.873 | 14.586.209 |
| Net result (9 months/1 year/9 months) (€) | 1,32 | 1,11 | 0,79 |
| Operating distributable result (9 months/1 year/9 months) (€) | 1,43 | 1,56 | 1,15 |
| Net value (fair value) (€) | 19,53 | 19,46 | 19,16 |
| Net value (investment value) (€) | 20,46 | 20,36 | 20,14 |
| Net asset value EPRA (€) | 19,81 | 19,77 | 19,53 |
| Market capitalisation (million €) | 336 | 363 | 318 |
| Share price on closing date (€) | 20,69 | 22,50 | 21,49 |
| Premium (+) to net value (fair value) (%) | 6% | 16% | 12% |
| Debt ratio (max. 65%) (%) | 49,3% | 46,6% | 49,0% |
Intercity Business Park, Mechelen
Interim statement of the board of directors as at 30 September 2015 for the third quarter of financial year 2015
As at 30 September 2015, the net value (fair value) of the share amounts to € 19,53. The share price as at 30 September 2015 of Intervest Offices & Warehouses (INTO) is € 20,69. Herewith the share is quoted with a premium of 6% compared to the net value (fair value).
The debt ratio of the real estate company amounts to 49,3% as at 30 September 2015 compared to 46,6% as at 31 December 2014. This increase of 2,7% compared to 31 December 2014 is due mainly to payment of
the dividend in cash for financial year 2014 and the acquisition of the logistics site in Liège.
As at 30 September 2015, 76% of the available credit lines of the company are long-term financings with an average remaining duration of 3,4 years. 24% of the available credit lines are short-term financings, with 14% consisting of financings with an unlimited duration (€ 48 million) and 10% of credit facilities expiring at the beginning of 2016 (€ 34 million).
The expiry calendar of credit lines gives as at 30 September 2015 the image below:
As at 30 September 2015 Intervest Offices & Warehouses has € 27 million non-withdrawn credit lines at financial institutions to absorb the fluctuations in the cash needs of the company and to finance future investments.
As at 30 September 2015, 72% of the withdrawn credit lines have a fixed interest rate or are fixed through interest rate swaps. The interest rates of the credit facilities of the company are fixed for a remaining average period of 3,7 years.
Interim statement of the board of directors as at 30 September 2015 for the third quarter of financial year 2015
Except for unexpected changes, such as large-scale bankruptcies of tenants or unforeseen increases in interest rates, Intervest Offices & Warehouses estimates that the operating distributable result for financial year 2015 will be between € 1,87 and € 1,92 per share. Taking into account a pay-out ratio of 90%, a gross dividend of between € 1,68 and € 1,73 per share (€ 1,40 for financial year 2014) will be offered to the shareholders. Based on the closing share price as at 30 September 2015 (€ 20,69) this represents a gross dividend yield of approximately 8%.
Intervest Offices & Warehouses will continue to pursue its investment strategy unabated in the fourth quarter of 2015 and in 2016, the aim of which is to increase the percentage of logistics buildings. In this context, Intervest Offices & Warehouses is investigating potential real estate transactions in the logistics sector.
About Intervest Offices & Warehouses. Intervest Offices & Warehouses is a public regulated real estate company (RREC) founded in 1996 of which the shares are listed on Euronext Brussels (INTO) as from 1999. Intervest Offices & Warehouses invests in high-quality Belgian office buildings and logistics properties that are leased to first-class tenants. The properties in which the company invests, consist primarily of up-to-date buildings that are strategically located outside municipal centres. The offices of the real estate portfolio are situated on the Antwerp - Mechelen - Brussels axis; the logistics properties on the Antwerp - Brussels and Antwerp - Liège axis. Intervest Offices & Warehouses distinguishes itself by offering 'turn-key solutions', a global solution going from plans, design, coordination of works to budget monitoring.
INTERVEST OFFICES & WAREHOUSES NV, public regulated real estate company under Belgian law, Jean-Paul Sols, CEO, or Inge Tas, CFO. Tel.: + 32 3 287 67 87, http://corporate.intervest.be/en/offices
Interim statement of the board of directors as at 30 September 2015 for the third quarter of financial year 2015
| in thousands € | 30.09.2015 | 30.09.2014 |
|---|---|---|
| Rental income | 34.608 | 29.843 |
| Rental-related expenses | 22 | -20 |
| NET RENTAL INCOME | 34.630 | 29.823 |
| Recovery of property charges | 2.968 | 541 |
| Recovery of rental charges and taxes normally payable by tenants on let properties | 8.349 | 8.390 |
| Costs payable by tenants and borne by the landlord for rental damage and refurbishment | -253 | -170 |
| Rental charges and taxes normally payable by tenants on let properties | -8.349 | -8.390 |
| Other rental-related income and expenses | 61 | 81 |
| PROPERTY RESULT | 37.406 | 30.275 |
| Technical costs | -1.114 | -734 |
| Commercial costs | -224 | -111 |
| Charges and taxes on unlet properties | -652 | -584 |
| Property management costs | -2.021 | -1.782 |
| Other property charges | -185 | -42 |
| Property charges | -4.196 | -3.253 |
| OPERATING PROPERTY RESULT | 33.210 | 27.022 |
| General costs | -1.349 | -1.230 |
| Other operating income and costs | 128 | 48 |
| OPERATING RESULT BEFORE RESULT ON PORTFOLIO | 31.989 | 25.840 |
| Result on disposals of investment properties | 125 | -589 |
| Changes in fair value of investment properties | -2.205 | -4.599 |
| Other result on portfolio | -217 | 355 |
| OPERATING RESULT | 29.692 | 21.007 |
| Financial income | 76 | 54 |
| Net interest charges | -8.594 | -8.869 |
| Other financial charges | -5 | -7 |
| Changes in fair value of financial assets and liabilities (ineffective hedges - IAS 39) | 363 | -697 |
| Financial result | -8.160 | -9.519 |
| RESULT BEFORE TAXES | 21.532 | 11.488 |
| Taxes | -205 | -27 |
| NET RESULT | 21.327 | 11.461 |
Interim statement of the board of directors as at 30 September 2015 for the third quarter of financial year 2015
| in thousands € | 30.09.2015 | 30.09.2014 |
|---|---|---|
| NET RESULT | 21.327 | 11.461 |
| Note: | ||
| Operating distributable result | 23.261 | 16.991 |
| Result on portfolio | -2.297 | -4.833 |
| Changes in fair value of financial assets and liabilities (ineffective hedges - IAS 39) | 363 | -697 |
| Attributable to: | ||
| Shareholders of the parent company | 21.328 | 11.462 |
| Minority interests | -1 | -1 |
| RESULT PER SHARE | 30.09.2015 | 30.09.2014 |
|---|---|---|
| Number of shares entitled to dividend | 16.239.350 | 14.777.342 |
| Weighted average number of shares | 16.187.957 | 14.586.209 |
| Net result (€) | 1,32 | 0,79 |
| Diluted net result (€) | 1,32 | 0,79 |
| Operating distributable result (€) | 1,43 | 1,15 |
| in thousands € | 30.09.2015 | 30.09.2014 |
|---|---|---|
| NET RESULT | 21.327 | 11.461 |
| Other components of comprehensive income (recyclable through income statement) | ||
| Changes in the effective part of fair value of authorised hedging instruments that are subject to hedge accounting |
0 | 180 |
| COMPREHENSIVE INCOME | 21.327 | 11.641 |
| Attributable to: | ||
| Shareholders of the parent company | 21.328 | 11.642 |
| Minority interests | -1 | -1 |
Interim statement of the board of directors as at 30 September 2015 for the third quarter of financial year 2015
| ASSETS in thousands € | 30.09.2015 | 31.12.2014 |
|---|---|---|
| Non -current assets |
637.373 | 609.722 |
| Intangible fixed assets | 5 | 16 |
| Investment properties | 636.091 | 609.476 |
| Other tangible assets | 645 | 215 |
| Trade receivables and other non-current assets | 632 | 15 |
| Current assets |
14.708 | 8.868 |
| Trade receivables | 6.762 | 3.861 |
| Tax receivables and other current assets | 3.592 | 1.655 |
| Cash and cash equivalents | 2.122 | 1.259 |
| Deferred charges and accrued income | 2.232 | 2.093 |
| TOTAL ASSETS | 652.081 | 618.590 |
| SHAREHOLDERS' EQUITY AND LIABILITIES in thousands € | 30.09.2015 | 31.12.2014 |
|---|---|---|
| SHAREHOLDERS' EQUITY | 317.111 | 314.167 |
| Shareholders' equity attributable to shareholders of the parent company | 317.077 | 314.132 |
| Share capital | 147.980 | 147.110 |
| Share premium | 84.220 | 82.785 |
| Reserves | 63.549 | 67.945 |
| Net result of the financial year | 21.328 | 16.292 |
| Minority interests | 34 | 35 |
| LIABILITIES | 334.970 | 304.423 |
| Non-current liabilities | 237.730 | 177.162 |
| Non-current financial debts | 232.389 | 171.478 |
| Credit institutions | 172.994 | 112.184 |
| Bond loan | 59.393 | 59.291 |
| Financial leases | 2 | 3 |
| Other non-current financial liabilities | 4.703 | 5.066 |
| Other non-current liabilities | 638 | 618 |
| Current liabilities | 97.240 | 127.261 |
| Provisions | 0 | 172 |
| Current financial debts | 81.768 | 112.465 |
| Credit institutions | 81.767 | 37.533 |
| Bond loan | 0 | 74.925 |
| Financial leases | 1 | 7 |
| Trade debts and other current debts | 6.252 | 3.656 |
| Other current liabilities | 186 | 187 |
| Deferred charges and accrued income | 9.034 | 10.781 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 652.081 | 618.590 |
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.