Earnings Release • Nov 17, 2011
Earnings Release
Open in ViewerOpens in native device viewer
Under embargo until 17/11/2011 – 8.00 AM
_________________________________________________________________
On course to achieve a targeted net operating result of EUR 1.79 per share
Fair value of the property portfolio increases by 10.4% to EUR 257.3 million2 compared with EUR 233.0 million at 31/12/2010
Occupancy rate3 rises to 96.37% as of 30/09/2011
Operating margin4 rises to 81.46% as of 30/09/2011
Debt ratio of 51.03% at 30/09/2011 Room for investment capacity of +/- EUR 30 million5
Aalst, 17th November 2011 – MONTEA (Euronext/MONT/MONTP) publishes its consolidated results for the period from 1st July 2011 to 30th September 2011.
This quarter, Montea recorded a net operating result of EUR 2.68 million, compared with EUR 2.30 million for the same period last year.
1 Net operating result: net result excluding result on the property portfolio (codes XVI, XVII and XVIII of the profit-and-loss account) and excluding IAS 39 (variation in the fair value of the interest rate hedging instruments). The variation in the fair value of the interest rate hedging instruments is shown in section XXIII of the profit-and-loss account).
2 Including the fair value of the solar panels (EUR 7.79 million).
3 The occupancy rate is calculated based on the occupied m² in relation to the total m².
4 Operating profit for the result on the property portfolio divided by the net rental profit.
5 Taking account of a debt ratio of 55%.
The EUR 0.38 million increase in net operating result was attributable mainly to:
Taking account of a net operating profit of EUR 0.48 per share during the third quarter, Montea had a cumulative net operating profit of EUR 1.34 per share as of 30/09/2011.
Based on this cumulative net operating profit per share and taking the prospects for Q4 into account, Montea is on course to achieve its targeted net operating profit of EUR 1.79 per share.
Montea and Vincent Logistics have replaced their current lease agreement with a new 8-year lease (with the option to terminate after 4 years) for a 14,081 m² unit at the site in Herstal-Milmort (Liège). Vincent Logistics is renewing its existing lease agreement for 9,543 m² of warehouse space, as well as entering into an additional lease for a further 4,538 m² of warehouse space. Both the renewal and the extension have been signed at a rental return that is in line with the existing lease agreement. With its floor area of 28,340 m², the building in Herstal-Milmort represents 10% of Montea's portfolio in Belgium. The site is situated in one of Belgium's main logistics growth areas, alongside the E313 motorway towards Antwerp and the E40 towards Liège.
Montea and Movianto Belgium, which specialises in the logistics and distribution of pharmaceutical and healthcare products, have replaced their current lease agreement with a new one over 7 years (with the option to terminate after 4 years) for a unit of 4,830 m² at the site in Erembodegem (Aalst). In line with the other units at this site, Montea will be refurbishing Movianto's unit and fitting it out so that it complies with the strict requirements for storing and distributing pharmaceutical products. As a result of the new agreement, Movianto Belgium now has a total of 8,250m² of warehouse space, which enables it to centralise its distribution business entirely at Erembodegem. The site in Erembodegem (Aalst) is situated in an outstandingly visible location alongside the E40 motorway between Brussels and Ghent. The total warehousing space of 11,375 m² is 100% leased.
For a real estate investment company with an average debt level of 50%, Montea's annual interest rate costs are by far its largest item in terms of charges. As a result, keeping those costs under control is essential, which means that financing and providing hedging cover for the debt is a constant preoccupation for Montea.
Over the past few months, Montea has been successful in refinancing 61% of its debt, thereby enabling it to achieve the following three objectives:
Montea has managed to lower its average annual cost of financing. At the end of 2010, 50% of the existing interest rate hedging was restructured at the than lower interest rates for hedging periods of 5 and up to 10 years. Based on this hedging and the refinancing of its debt, Montea's financing costs have fallen to 4.23%.
The average term of the renewed financing is 4.7 years. The maturity dates are spread over 3, 4, 5 and 7 years.
The refinancing was agreed on and spread across the 4 major banks in Belgium. Previously, it had only been with three of the major banks.
Lowering Montea's finance costs, combined with an improved spread of maturity dates in time and increasing the number of financial institutions involved has lowered the company's risk profile, which will have a positive impact on net yield.
Based on current opportunities on the interest rate markets, Montea will continue to work on driving down its financial costs during the months ahead.
There were no investments or divestments in the third quarter of 2011.
| Total 30/09/2011 |
Belgium | France | Total 31/12/2010 |
Total 30/09/2010 |
|
|---|---|---|---|---|---|
| Real Estate Portfolio - Buildings | |||||
| Number of sites | 33 | 20 | 13 | 30 | 31 |
| Warehouse space (m²) | 435.998 m² | 266.073 m² | 169.925 m² | 392.338 m² | 406.680 m² |
| Office space (m²) | 45.268 m² | 32.159 m² | 13.109 m² | 45.263 m² | 45.128 m² |
| Total space (m²) | 481.266 m² | 298.232 m² | 183.034 m² | 437.601 m² | 451.808 m² |
| Development potential (m²) | 90.500 m² | 54.500 m² | 36.000 m² | 69.720 m² | 69.720 m² |
| Fair Value (EUR) | € 249.512.000 € 147.727.000 € 101.785.000 | € 232.990.000 | € 235.041.000 | ||
| Investment Value (EUR) | € 258.896.000 € 151.750.000 € 107.146.000 | € 241.527.000 | € 243.709.000 | ||
| Annual Contractual Rents (EUR) | € 20.373.967 | € 11.816.467 | € 8.557.500 | € 18.353.525 | € 18.646.198 |
| Gross Yield (%) | 8,17% | 8,00% | 8,41% | 7,88% | 7,93% |
| Gross Yield on full occupancy (%) | 8,51% | 8,39% | 8,70% | 8,28% | 8,44% |
| Property not let (m²) | 17.486 m² | 10.380 m² | 7.106 m² | 21.306 m² | 28.745 m² |
| Rental value of property not let (EUR) | € 869.848 | € 571.396 | € 298.452 | € 937.170 | € 1.180.520 |
| Occupancy rate (% of m²) | 96,37% | 96,52% | 96,12% | 95,13% | 93,64% |
| Occupancy rate (% of rental value) | 95,91% | 95,39% | 96,63% | 95,14% | 94,05% |
| Real Estate Portfolio - Solar Panels | |||||
| Fair Value (EUR) | € 7.790.947 | € 7.790.947 |
The total area of the property portfolio is 481,266 m², spread across 20 sites in Belgium and 13 sites in France. The increase in area (481,266 m² compared with 437,601 m² at 31st December 2010) is attributable mainly to the purchase of the logistics platform in Marennes (Lyon – France) and the handover of the "built-to-suit" project with Coca-Cola (Heppignies – Belgium).
The gross return on the total of the portfolio was 8.51%, based on a fully leased portfolio, compared with 8.28% at 31/12/2010.
Contractual annual rental income (excluding rental guarantees) was 20.37 million EUR, an increase of 11.0% in comparison with 31/12/2010. This rise is attributable mainly to the increase in the property portfolio and the 1.30% rise in the occupancy rate.
The occupancy rate was 96.37%6 . The slight rise in relation to 30/06/2011 (95.41%) is attributable to the additional area leased to Vincent Logistics at the site in Milmort (also see lease activity).
Montea is making every effort to maintain its occupancy rate above 95%.
6 The occupancy rate is calculated based on the occupied m² in relation to the total leasable m².
| CONSOLIDATED INCOME STATEMENT (EUR) |
30/09/2011 3rd quarter |
30/09/2010 3rd quarter |
|---|---|---|
| NET RENTAL INCOME | 4.832.780 | 4.539.333 |
| PROPERTY RESULT | 4.878.983 | 4.439.298 |
| TOTAL PROPERTY CHARGES | -247.577 | -220.241 |
| OPERATING PROPERTY RESULT | 4.631.406 | 4.219.057 |
| General costs | -541.862 | -501.803 |
| Other operating income and expenses | -19.158 | -7.195 |
| OPERATING RESULT BEFORE RESULT ON THE PORTFOLIO | 4.070.386 | 3.710.059 |
| Result on disposals of investment properties | 0 | 275.192 |
| Result on disposals of other non-financial assets | 0 | 0 |
| Result in the fair value of investment properties | -1.351.156 | 23.337 |
| Other result on portfolio | ||
| OPERATING RESULT | 2.719.230 | 4.008.588 |
| Financial income | 2.487 | -32.092 |
| Interest costs | -1.381.781 | -1.367.648 |
| Other financial charges | -5.915 | -6.027 |
| Variation in the fair value of financial assets & liabilities | -5.620.669 | -151.574 |
| FINANCIAL RESULT | -7.005.878 | -1.557.340 |
| RESULT BEFORE TAXES | -4.286.649 | 2.451.248 |
| TAXES | -5.907 | -2.184 |
| NET RESULT | -4.292.556 | 2.449.064 |
| NET CURRENT RESULT | 2.679.270 | 2.302.109 |
| Number of shares entitled in the result of the period | 5.634.126 | 5.634.126 |
| NET RESULT PER SHARE | -0,76 | 0,43 |
| NET CURRENT RESULT PER SHARE | 0,48 | 0,41 |
Net rental income rose by 6.5% compared with the same period last year and was principally the result of purchasing the site in Marennes (Lyon – France) earlier this year and the rise in the occupancy rate.
The rise in the operating margin was mainly the result of the increase in the occupancy rate (meaning that the cost of vacancies can be recovered with regard to the tenant), as well as the net revenue from the solar panels (EUR 0.26 million in Q3 of this year).
During the third quarter of 2011, Montea recorded a negative variation in the fair value of its property portfolio to the tune of EUR -1.35 million. This negative variation in the fair value of property investments was due mainly to:
This quarter, the net financial result was affected significantly by the negative variation in the fair value of the hedging instruments (EUR 5.62 million), due to the sharp fall in long-term interest rates.
Without taking account of the negative variation in the fair value of the hedging instruments (EUR 5.62 million), the net negative financial result was EUR 1.39 million, compared with EUR 1.41 million in the same period last year. The virtually identical financial result compared with a higher debt position on average (EUR 129.2 million compared with EUR 119.1 million in the same period last year) explains the fall in the average financial interest burden from 4.72% to 4.29%.
The net result was EUR -4.29 million. This negative net result was influenced significantly by the negative variation in the fair value of the hedging instruments to the tune of EUR 5.26 million. This negative variation in the fair value of the hedging instruments has no effect whatsoever on cashflow or any dividends to be paid.
The net operating result per share rose by 16.4% to EUR 2.68 million. This can be attributed largely to the new investment in Marennes (France), as well as the increase in the operating margin and the rise in the occupancy rate.
Montea had a cumulative net operating result of EUR 7.54 million and in so doing is on course to achieve its targeted forecast of EUR 10 million for 2011 7 .
7 This target corresponds with the same net operating result of EUR 1.79 per share.
| CONSOLIDATED BALANCE SHEET (EUR) |
30/09/2011 Conso |
31/12/2010 Conso |
|---|---|---|
| NON-CURRENT ASSETS | 258.671.568 | 236.465.744 |
| CURRENT ASSETS | 8.506.827 | 22.401.920 |
| TOTAL ASSETS | 267.178.394 | 258.867.664 |
| SHAREHOLDERS' EQUITY | 117.964.533 | 124.106.557 |
| Shareholders' equity attributable to shareholders of parent company | 117.870.284 | 124.005.824 |
| Minority interests | 94.249 | 100.733 |
| LIABILITIES | 149.213.862 | 134.761.108 |
| Non-current liabilities | 108.827.165 | 69.539.252 |
| Current liabilities | 40.386.697 | 65.221.856 |
| TOTAL LIABILITIES AND SHAREHOLDERS EQUITY | 267.178.394 | 258.867.664 |
In addition to the current leasing debts for the logistics premises in Milmort, Orléans and Roissy (EUR 8.72 million), Montea currently holds contracted lines of credit with 4 Belgian financial institutions, totalling EUR 130 million, of which EUR 121 million (93%) has been drawn down.
Montea's debt ratio8 is 51.03% and as such remains comfortably below the legal ceiling of 65%. Montea also complies with all of the covenants it has entered into in terms of debt ratio with its financial institutions on the basis of which Montea is able to have a debt ratio of 60%.
Taking account of the current debt ratio, Montea has a net investment capacity of approximately EUR 30 million at the present time. In the coming months, management will focus its efforts on applying that investment capacity.
The net asset value at 30/09/2011 was EUR 20.92 per share. If the negative variation in the fair value of the hedging instruments (IAS 39) is not taken into account, the net asset value was EUR 22.73.
Taking the net asset value of EUR 20.92 into account, Montea has a premium of 18.16% in relation to the share price at 30/09/2011 (EUR 24.72). Taking account of the net asset value, excluding IAS 39, Montea has a premium of 8.75% in relation to the share price mentioned above.
8 The debt ratio is calculated in accordance with the Royal Decree of 21st June 2006.
Regulated information
| NET ASSET VALUE PER SHARE (EUR) | 30/09/2011 | 31/12/2010 | 30/09/2010 |
|---|---|---|---|
| Net asset value based on fair value ('000 euros) | 117.870 | 124.006 | 117.848 |
| Number of shares entitled to share in result of the period | 5.634.126 | 5.634.126 | 5.634.126 |
| Net asset value per share (fair value) | 20,92 | 22,01 | 20,92 |
The new distribution centre was handed over on 30th September 2011, in line with the contractual arrangements made with Coca-Cola Enterprises Belgium.
Within the scope of the dynamic management of its property portfolio, Montea has sold a semiindustrial building of 20,000 m² in Moorsel (Aalst) for EUR 2.8 million to Globalindus NV, and industrial property development company. The selling price was equivalent to the fair value for the site at 30/09/2011. The transaction was conducted under the supervision of property brokers, Turner & Dewaele.
This press release also contains a number of statements focused on the future. Statements such as these are subject to risks and uncertainties that may result in the actual results differing substantially from the results that might have been expected from the forward-looking statements made in this press release. Some of the major factors that may affect these results include changes to the economic situation, as well as commercial and competitive circumstances resulting from future court rulings or changes to legislation.
13/02/2012: Yearly results at 31 December 2011
Montea Comm. VA is a property investment trust (Sicafi – SIIC) specialising in logistical and semiindustrial property in Belgium and France. The company aims to become a benchmark player within this market. Montea offers more than just warehouses and also seeks to provide flexible and innovative property solutions to its tenants, thereby creating value for its shareholders. As of 30/09/2011, the company had 481,266 m² of space at 33 locations in its portfolio. Montea Comm. VA has been listed on NYSE Euronext Brussels (MONT) and Paris (MONTP) since the end of 2006.
Jo De Wolf +32 53 82 62 62 [email protected]
www.montea.com
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.