Earnings Release • Feb 24, 2017
Earnings Release
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Press Release Regulated Information
24 February 2017 at 7:00 a.m. CET
1 Including VGP European Logistics (joint venture with Allianz Real Estate). As at 31 December 2016 the annualised committed leases for VGP European Logistics stood at € 38.6 million.
2 Including € 1.2 million annualised committed leases contracted for VGP European Logistics
3 The Extraordinary Shareholders' Meeting is planned to be held on the date as the next General meeting of shareholders i.e. 12 May 2017.
VGP recorded a strong growth in all the markets where the Group is active, with e-commerce gaining increasing importance in driving the demand for new lettable space.
2016 also marked the start of a new 50/50 joint venture with Allianz Real Estate. The new joint venture (VGP European Logistics) has an exclusive right of first refusal in relation to acquiring the income generating assets developed by VGP and located in Germany, the Czech Republic, Slovakia and Hungary. VGP will continue to service the joint venture as asset-, property- and development manager.
VGP European Logistics recorded its first closing at the end of May 2016, in which 15 parks were acquired located in Germany (8 parks), the Czech Republic (4 parks), Slovakia (1 park) and Hungary (2 parks) and comprised 28 logistic and semi-industrial buildings. A second closing took place at the end of October 2016, in which a further 5 buildings were acquired i.e. 4 buildings located in Germany and one building located in Slovakia.
Following the completion of the acquisition of the initial seed portfolio by the VGP European Logistics joint venture, the board of directors approved the redemption on 1 June 2016 of all issued hybrid securities against a price equal to the issue price (in total € 60 million) plus the interest accrued (€ 3.0 million) from the issue date of each Security.
2016 saw also the jump start in Spain with a sale and lease back transaction whereby VGP acquired a state of the art brand new warehouse from the fashion Group Mango offering 185,000 m² of usable space (extendable to circa 260,000 m²) and leased it back to Mango under a long-term lease agreement and the acquisition of 400,000 m² additional development land located in Barcelona (adjacent to the Mango building) and Madrid (San Fernando de Henares). The total initial invested amount was around € 195 million.
The strong development pipeline allowed VGP, during the second half of 2016, to further extend its debt maturity profile with the successful issuance of a 7 year € 225 million bond.
VGP's activities during the year 2016 can be further summarised as follows:
The own investment property portfolio consists of 16 completed buildings representing 416,158 m² of lettable area whereas the Joint Venture property portfolio consists of 33 completed buildings representing 593,454 m² of lettable area.
At the end of December 2016, 17 buildings representing 381,041 m² of lettable area were under construction of which 6 buildings were being constructed for VGP European Logistics and which should be acquired by the Joint Venture upon completion.
| CONSOLIDATED INCOME STATEMENT – ANALYTICAL FORM (in thousands of €) |
2016 | 2015 |
|---|---|---|
| NET CURRENT RESULT | ||
| Gross rental income | 16,806 | 17,073 |
| Service charge income / (expenses) | 1,035 | 422 |
| Property operating expenses | (1,703) | (972) |
| Net rental and related income | 16,138 | 16,523 |
| Property and development management fee income | 3,141 | 1,433 |
| Facility management income | 684 | 1,114 |
| Other income / (expenses) - incl. administrative costs | (16,778) | (13,998) |
| Share in the result of joint ventures and associates | 7,897 | 191 |
| Operating result (before result on portfolio) | 11,082 | 5,263 |
| Net financial costs1 | (12,287) | (9,835) |
| Revaluation of interest rate financial instruments (IAS 39) | (4,619) | (319) |
| Taxes | 1,122 | 5,512 |
| Net current result | (4,702) | 621 |
| RESULT ON PROPERTY PORTFOLIO | ||
| Net valuation gains / (losses) on investment properties | 118,900 | 103,981 |
| Deferred taxes | (22,912) | (18,041) |
| Result on property portfolio | 95,988 | 85,940 |
| PROFIT FOR THE YEAR | 91,286 | 86,561 |
The net rental income decreased with € 0.4 million to € 16.1 million after taking into effect the full impact of the income generating assets delivered during 2016 and the deconsolidation of the VGP European Logistics portfolio. This newly established joint venture with Allianz Real Estate acquired 15 parks from VGP at the end of May 2016 and another 5 buildings at the end of October 2016.
Including VGP's share of the Joint Venture, net rental income in total has increased by € 7.7 million, or 46.2% compared to 2015 (from € 16.5 million as at 31 December 2015 to 24.2 million as at 31 December 2016) (see note 7.1 for further details). This increase is mainly due to the impact of income from new developments. The Mango building acquired in December 2016 only contributed a nominal amount of rent income (€ 0.1 million).
Following the significant disposal of assets into the VGP European Logistics joint venture, the analysis of the net rental income on such a 'look-through' basis (with the Joint Venture included at share) provides a more meaningful analysis of the net rent evolution. Given the fact that it is anticipated that there will be around 2 sales closings per year with the Joint Venture in the future we have not adjusted the net rent income for the period in which the sold assets were in full ownership of the Group.
1 Excluding the revaluation of interest rate financial instruments.
The increase in demand of lettable area resulted in the signing of new lease contracts in excess of € 30.4 million in total of which € 27.4 million related to new or replacement leases (€ 6.3 million on behalf of VGP European Logistics) and € 3.0 million (€1.1 million on behalf of VGP European Logistics) were related to renewals of existing lease contracts. During the year lease contracts for a total amount of € 1.0 million (€ 0.8 million on behalf of VGP European Logistics) were terminated.
The annualised committed leases therefore increased to € 64.3 million1 as at the end of December 2016 (compared to € 38.0 million as at 31 December 2015).
Germany was the main driver of the growth in committed leases with € 14.5 million of new leases signed during the year (€ 5.6 million on behalf of VGP European Logistics).
The other countries also performed very well with new leases being signed in the Czech Republic + € 3.8 million (€ 0.7 million on behalf of VGP European Logistics), in Slovakia + € 1.4 million (€ 0.2 million on behalf of VGP European Logistics), in Estonia + € 1.4 million, in Hungary + € 0.8 million (all on behalf of VGP European Logistics) and finally in Romania + € 1.0 million. In Spain VGP entered into a € 7.5 million new lease in respect of the newly acquired building in Barcelona.
The signed committed lease agreements of the own portfolio represent a total of 545,715 m² of lettable area with the weighted average term of the annualised committed leases standing at 14.1 years2 as at the end of December 2016.
The signed committed lease agreements of the Joint Venture portfolio represent a total of 732,523 m² of lettable area with the weighted average term of the annualised committed leases standing at 7.8 years3 as at the end of December 2016.
As at 31 December 2016 the net valuation gains on the property portfolio reaches € 118.9 million against a net valuation gain of € 104.0 million per 31 December 2015.
The trend of increasingly lower yields maintained in real estate valuations continued to persist during the year. However due to the change of portfolio mix, following the divestment of the seed portfolio to VGP European Logistics, the own property portfolio, excluding development land, is being valued by the valuation expert at 31 December 2016, at a weighted average yield of 6.49% (compared to 7.02% as at 31 December 2015) .
The VGP European Logistics portfolio was valued at a weighted average yield of 6.08% as at 31 December 2016 (compared to 6.35% at 30 June 2016) reflecting the contraction of the yields during the second half of 2016.
The (re)valuation of the both portfolios was based on the appraisal report of the property expert Jones Lang LaSalle except for Spain where the valuation was made by the property expert valuator Gesvalt.
1 € 38.6 million related to VGP European Logistics
2 The weighted average term of the committed leases up to the first break stands at 10.6 years as at 31 December 2016.
3 The weighted average term of the committed leases up to the first break stands at 6.8 years as at 30 June 2016.
The property and development management fee income increased from € 1.4 million as at 31 December 2015 to € 3.1 million as at 31 December 2016. The fee income generated during the year was solely related to asset-, property-, and development management services rendered to the VGP European Logistics joint venture which was set up during 2016.
The € 1.4 million fee recorded during 2015 related solely to property management services provided to P3 following the disposal of the VGP CZ I, II and IV real estate portfolio in October 2014 and this contract was terminated in October 2015.
The facility management income decreased during the year from € 1.1 million as at 31 December 2015 to € 0.7 million as at 31 December 2016. Although there were some adverse spill over effects from the discontinuance of the property management agreement with P3, the main reason for the fall in income was the strategic repositioning of the Suta facility management within the VGP Group. In the past Suta provided facility management services to a broad range of third party customers. In view of the strong growth of the own and the Joint Venture portfolio it was decided during the year to scale down all services provided to third parties and to concentrate solely on the Group's and the Joint Venture's portfolio going forward. As a result, € 0.6 million of goodwill was impaired at year-end.
VGP's share of the Joint ventures and associates' profit increased by € 7.7 million (from € 0.2 million at 31 December 2015 to € 7.9 million at 31 December 2016), reflecting the higher income from the Group's VGP European Logistics joint venture. VGP holds 50% directly in the Joint Venture and an additional 5.1% directly into the Joint Venture's subsidiaries holding German assets (Associates).
During the year the associates SNOW CRYSTAL S. à r.l. and SUN S.à r.l. were divested as part of the liquidation process and following the sale of the VGP CZ I, II and IV portfolios to P3 which took place in October 2014.
The other income / (expenses) and administrative costs increased with € 2.8 million (from € 14.0 million at 31 December 2015 to € 16.8 million at 31 December 2016), reflecting mainly the growth of the VGP team in order to support the growth of the development activities of the Group and its geographic expansion and also included the € 0.6 million goodwill impairment (see supra). As at 31 December 2016 the VGP team comprised 105 people active in more than 9 different countries.
For the period ending 31 December 2016, the financial income was € 2.8 million (€ 0.5 million as at 31 December 2015) and included € 2.5 million interest income on loans granted to VGP European Logistics and a € 0.2 million unrealised gain on interest rate derivatives (€ 0.1 million as at 31 December 2015).
The reported financial expenses as at 31 December 2016 are mainly made up of € 13.0 million interest expenses related to financial debt (€ 10.2 million as at 31 December 2015), € 4.8 million unrealised
losses on interest rate derivatives (€ 0.4 million as at 31 December 2015), € 3.2 million other financial expenses (€ 2.4 million as at 31 December 2015) mainly relating to the amortisation of the transactions costs of the 2 bonds issued during 2013 and the new bond issued during 2016 and the additional financial costs incurred in respect of closing out existing bank debt in respect of the sale of the initial seed portfolio to VGP European Logistics, € 0.1 million of net foreign exchange losses (compared to € 0.1 million net foreign exchange gains as at 31 December 2015) and a positive impact of € 1.4 million (€ 2.4 million per 31 December 2015) related to capitalised interests.
As a result, the net financial expenses reached € 16.9 million as at 31 December 2016 compared to € 10.2 million as at 31 December 2015.
Shareholder loans to VGP European Logistics amounted to € 89.9 million as at 31 December 2016 of which € 81.6 million was related to financing of the buildings under construction and development land held by the VGP European Logistics joint venture. Under the joint venture agreement VGP European Logistics has an exclusive right of first refusal in relation to acquiring the income generating assets developed by VGP and located in Germany, the Czech Republic, Slovakia and Hungary. Consequently, these assets have been classified as investment properties (Disposal group held for sale) using the accounting principles applicable to Investment Properties.
The gearing ratio of the Group increased slightly from 35.7% at 31 December 2015 to 39.4% at 31 December 2016.
The financial debt increased from € 174.3 million as at 31 December 2015 to € 409.6 million as at 31 December 2016. The increase was mainly driven by the issuance of a new € 225 million 7-year bond and the € 13 million drawdown on an new committed credit facility with Raiffeisen Bank in Romania.
The development activities of the year can be summarised as follows:
During the year 14 buildings were completed totalling 268,945 m² of lettable area and 1 building of 185,000 m² lettable area was acquired.
For its own account VGP delivered 6 buildings i.e. In the Czech Republic: 1 building of 2,753 m² in VGP Park Cesky Ujezd and 1 building of 11,436 m² in VGP Park Liberec. In Romania: 2 buildings totalling 35,574 m² in VGP Park Timisoara. In other countries: 1 building of 11,152 m² in VGP Park Nehatu (Estonia) and 1 building of 55,811 m² in VGP Park Soltau (Germany).
For the Joint Venture VGP completed 8 buildings i.e. Buildings completed prior to the sale of the Seed portfolio on 31 May 2016: In Germany: 2 buildings totalling 68,129 m² in VGP Park Rodgau. In other countries: 1 building of 3,640 m² in VGP Park Plzen (Czech Republic) and 1 building of 22,892 m² in VGP Park Alsonemedi (Hungary). Buildings completed after 31 May 2016: In Germany: 1 building of 7,062 m² in VGP Park Rodgau, 1 building of 23,270 m² in VGP Park Bobenheim-Roxheim and 1 building of 14,471 m² in VGP Park Hamburg. In other countries: 1 building of 12,756 m² in VGP Park Malacky (Slovakia).
At the end of December 2016 VGP has the following 17 buildings under construction:
For its own account VGP has following 11 new buildings under construction: 1 building in each of the following Czech parks, VGP Park Tuchomerice, VGP Park Usti nad Labem, VGP Park Cesky Ujezd and VGP Park Olomouc. In Germany: 1 building in each of the following German parks: VGP Park Berlin, VGP Park Leipzig, VGP Park Ginsheim, VGP Park Hamburg and VGP Park Schwalbach. In the other countries: 1 building in VGP Park Nehatu (Estonia) and 1 building VGP Park Kekava (Latvia). The new buildings under construction on which 69%1 pre-leases have already been signed, represent a total future lettable area of 221,060 m² which corresponds to an estimated annualised rent income of € 10.0 million.
On behalf of the Joint Venture VGP is constructing 6 new buildings: In Germany: 3 buildings in VGP Park Hamburg and 1 building in VGP Park Frankenthal. In the other countries: 1 building in VGP Park BRNO (Czech Republic) and 1 building in VGP Park Malacky (Slovakia). The new buildings under construction on which 81%¹ pre-leases have already been signed, represent a total future lettable area of 159,981 m², which corresponds to an estimated annualised rent income of € 8.6 million.
During the year 2016, VGP continued to target land plots to support the development pipeline for future growth. In 2016, VGP already acquired 1,166,000 m² development land of which 408,000 m² was located in Germany, 358,000 m² in the Czech Republic and 400,000 in Spain. These new land plots allow VGP to develop approximately 649,000 m². Besides this VGP has another 417,000 m² of new land plots under option which are located in Germany, Slovakia, Romania and the Czech Republic. These land plots have a development potential of approx. 192,000 m² of new lettable areas and the land plots are expected to be acquired, subject to permits, during the course of 2017.
VGP has currently a land bank in full ownership of 2,993,779 m². The land bank allows VGP to develop besides the current completed projects and projects under construction a further 890,000 m² of lettable area of which 314,000 m² in Germany, 258,000 m² in the Czech Republic, 268,000 m² in Spain and 50,000 in the other countries.
The Joint Venture has currently a land bank of in full ownership of 1,931,383 m². The land bank corresponds to a total development potential of 848,163 m² of which 753,435 m² or 89%; have already been developed or are currently being developed.
Following the sale of the Seed portfolio to VGP European Logistics the balance of the disposal group held for sale fell from € 527.4 million as at 31 December 2015 to € 132.3 million as at 31 December 2016.
Under the joint venture agreement VGP European Logistics has an exclusive right of first refusal in relation to acquiring the income generating assets developed by VGP and located in Germany, the Czech Republic, Slovakia and Hungary. The development pipeline which was transferred to the Joint
1 Calculated based on the contracted rent and estimated market rent for the vacant space.
Venture as part of the Seed portfolio or which would be transferred as part of any future acquisition transaction between the Joint Venture and VGP is being developed at VGP's own risk and subsequently acquired and paid for by the Joint Venture subject to pre-agreed completion and lease parameters. The balance of € 132.3 million show as at 31 December 2016 correspond to the fair value of the asset under construction which are being developed by VGP on behalf of VGP European Logistics. This balance includes the interest bearing development and construction loans (€ 81.6 million) granted by VGP to the Joint Venture to finance the development pipeline of the Joint Venture.
Following the completion of the acquisition of the initial seed portfolio by the new joint venture with Allianz Real Estate at the end of May 2016 (VGP European Logistics); the board of directors approved the redemption of all issued hybrid securities against a price equal to the issue price (in total € 60 million) plus the interest accrued (€ 3.0 million) from the issue date of each Security, after complying with the conflict of interest procedure in accordance with article 523 of the Belgian Companies Code. The redemption took place on 1 June 2016.
During the year VGP was able to increase its committed bank facilities with € 16.5 million from Raiffeisen Romania. The committed bank facilities amount to € 39.0 million at year end and were drawn for 91% as at the end of December 2016 and have a weighted average term of 2.3 years. The total bonds outstanding at the end of December 2016 was € 375 .0 million and have an average maturity term of 4.3 years. In July 2017, a € 75 million bond will come to maturity.
During the year, there were no events of default nor were there any breaches of covenants with respect to loan agreements or bonds.
Based on the positive trend in the demands for lettable area recorded by VGP during 2016, and provided there are no unforeseen events of economic and financial markets nature, VGP should be able to continue to substantially expand its rent income and property portfolio through the completion and startup of additional new buildings.
During the first half of 2017 VGP will continue to review its sources of funding and funding strategy in order to enable the Group to continue to invest in the expansion of the land bank to support its development activities as well as to maximise shareholder value. In this respect VGP will continue to actively review to finance its development activities through the bond markets as this source of funding has proven to be an attractive alternative to arranging additional committed bank facilities.
Following the sale of the seed portfolio to VGP European Logistics and the subsequent second closing which occurred in 2016, and in order to further optimise the capital structure of VGP it is the intention to make a € 20 million capital distribution in cash in 2017. As from 2018 it is the intention of the Group to move towards a sustained profit distribution policy whereby the profits generated by the Joint Venture will be distributed to the shareholders.
| Annual report 2016 | 11 April 2017 |
|---|---|
| General meeting of shareholders | 12 May 2017 |
| 2017 half year results | 30 August 2017 |
Mr Jan Van Geet Mr Dirk Stoop CEO CFO Tel. + 420 602 404 790 Tel.+32 52 45 43 86 E-mail: [email protected] E-mail: [email protected]
VGP (www.vgpparks.eu) constructs and develops high-end semi-industrial real estate and ancillary offices for its own account and for the account of its VGP European Logistics joint venture (50:50 joint venture between Allianz Real Estate and VGP), which are subsequently rented out to reputable clients on long term lease contracts. VGP has an in-house team which manages all activities of the fully integrated business model: from identification and acquisition of land, to the conceptualisation and design of the project, the supervision of the construction works, contracts with potential tenants and the facility management.
VGP is quoted on Euronext Brussels and the Main Market of the Prague Stock Exchange.
For the year ended 31 December 2016
| INCOME STATEMENT (in thousands of €) | 2016 | 2015 |
|---|---|---|
| Revenue2 | 24,739 | 23,118 |
| Gross rental income | 16,806 | 17,073 |
| Service charge income | 4,108 | 3,498 |
| Service charge expenses | (3,073) | (3,076) |
| Property operating expenses | (1,703) | (972) |
| Net rental income | 16,138 | 16,523 |
| Property and development management fee income | 3,141 | 1,433 |
| Facility management income | 684 | 1,114 |
| Net valuation gains / (losses) on investment properties | 118,900 | 103,981 |
| Administration expenses | (15,446) | (13,451) |
| Other income | 483 | 487 |
| Other expenses | (1,815) | (1,034) |
| Share in result of joint ventures and associates | 7,897 | 191 |
| Operating profit / (loss) | 129,982 | 109,244 |
| Financial income | 2,814 | 466 |
| Financial expenses | (19,720) | (10,620) |
| Net financial result | (16,906) | (10,154) |
| Profit before taxes | 113,076 | 99,090 |
| Taxes | (21,790) | (12,529) |
| Profit for the period | 91,286 | 86,561 |
| Attributable to: | ||
| Shareholders of VGP NV | 91,286 | 86,561 |
| Non-controlling interests | - | - |
| RESULT PER SHARE | 2016 | 2015 |
|---|---|---|
| Basic earnings per share (in €) | 4.91 | 4.66 |
| Diluted earnings per share (in €) | 4.91 | 4.66 |
| Basic earnings per share – after correction of reciprocal interest | ||
| through associates (in €) | 5.02 | 4.76 |
1 The statutory auditor has confirmed that his audit procedures, which have been substantially completed, have not revealed any material adjustments which would have to be made to the accounting information disclosed in this press release. The consolidated financial statements have been prepared in accordance with IFRS as adopted by the European Union.
2 Revenue is composed gross rental income, service charge income, property and facility management income and property development income.
| STATEMENT OF COMPREHENSIVE INCOME (in thousands of €) | 2016 | 2015 |
|---|---|---|
| Profit for the period | 91,286 | 86,561 |
| Other comprehensive income to be reclassified to profit or loss in | ||
| subsequent periods | - | - |
| Other comprehensive income not to be reclassified to profit or loss in | ||
| subsequent periods | - | - |
| Other comprehensive income for the period | - | - |
| Total comprehensive income / (loss) of the period | 91,286 | 86,561 |
| Attributable to: | ||
| Shareholders of VGP NV | 91,286 | 86,561 |
| Non-controlling interest | - | - |
| ASSETS (in thousands of €) | 2016 | 2015 |
|---|---|---|
| Goodwill | - | 631 |
| Intangible assets | 14 | 12 |
| Investment properties | 550,262 | 173,972 |
| Property, plant and equipment | 517 | 378 |
| Non-current financial assets | 5 | 216 |
| Investments in joint ventures and associates | 89,194 | (103) |
| Other non-current receivables | 8,315 | 0 |
| Deferred tax assets | 3 | 89 |
| Total non-current assets | 648,310 | 175,195 |
| Trade and other receivables | 19,426 | 4,927 |
| Cash and cash equivalents | 71,595 | 9,825 |
| Disposal group held for sale | 132,263 | 527,361 |
| Total current assets | 223,284 | 542,113 |
| TOTAL ASSETS | 871,594 | 717,308 |
| SHAREHOLDERS' EQUITY AND LIABILITIES (in thousands of €) |
2016 | 2015 |
|---|---|---|
| Share capital | 62,251 | 62,251 |
| Retained earnings | 327,985 | 239,658 |
| Other reserves | 69 | 69 |
| Other equity | - | 60,000 |
| Shareholders' equity | 390,305 | 361,978 |
| Non-current financial debt | 327,923 | 170,800 |
| Other non-current financial liabilities | 5,348 | 967 |
| Other non-current liabilities | 2,432 | 405 |
| Deferred tax liabilities | 20,012 | 8,247 |
| Total non-current liabilities | 355,715 | 180,419 |
| Current financial debt | 81,674 | 3,522 |
| Trade debts and other current liabilities | 35,496 | 10,342 |
| Liabilities related to disposal group held for sale | 8,404 | 161,047 |
| Total current liabilities | 125,574 | 174,911 |
| Total liabilities | 481,289 | 355,330 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 871,594 | 717,308 |
| STATEMENT OF CHANGES IN EQUITY (in thousands of €) |
Statutory share capital |
Capital reserve |
IFRS share capital |
Retained earnings |
Share premium |
Other equity |
Total equity |
|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2015 | 112,737 | (50,486) | 62,251 | 153,097 | 69 | - | 215,417 |
| Other comprehensive income / (loss) | - | - | - | - | - | - | - |
| Result of the period | - | - | - | 86,561 | - | - | 86,561 |
| Effect of disposals | - | - | - | - | - | - | - |
| Total comprehensive income / (loss) | - | - | - | 86,561 | - | - | 86,561 |
| Dividends to shareholders | - | - | - | - | - | - | - |
| Share capital distribution to shareholders | - | - | - | - | - | - | - |
| Hybrid securities | - | - | - | - | - | 60,000 | 60,000 |
| Balance as at 31 December 2015 | 112,737 | (50,486) | 62,251 | 239,658 | 69 | 60,000 | 361,978 |
| Balance as at 1 January 2016 | 112,737 | (50,486) | 62,251 | 239,658 | 69 | 60,000 | 361,978 |
| Other comprehensive income / (loss) | - | - | - | - | - | - | - |
| Result of the period | - | - | - | 91,286 | - | - | 91,286 |
| Effect of disposals | - | - | - | - | - | - | - |
| Total comprehensive income / (loss) | - | - | - | 91,286 | - | - | 91,286 |
| Dividends to shareholders | - | - | - | - | - | - | - |
| Share capital distribution to shareholders | - | - | - | - | - | - | - |
| Hybrid securities | - | - | - | (2,959) | - | (60,000) | (62,959) |
| Balance as at 31 December 2016 | 112,737 | (50,486) | 62,251 | 327,985 | 69 | - | 390,305 |
| CASH FLOW STATEMENT (in thousands of €) | 2016 | 2015 |
|---|---|---|
| Cash flows from operating activities | ||
| Profit before taxes | 113,076 | 99,090 |
| Adjustments for: | ||
| Depreciation | 897 | 734 |
| Unrealised (gains) /losses on investment properties Realised (gains) / losses on disposal of subsidiaries and investment |
(97,696) | (103,975) |
| properties | (21,204) | (6) |
| Unrealised (gains) / losses on financial instruments and foreign exchange | 4,723 | 245 |
| Interest (received) | (2,636) | (21) |
| Interest paid | 14,820 | 10,194 |
| Share in (profit)/loss of joint ventures and associates | (7,897) | (191) |
| Operating profit before changes in working capital and provisions | 4,083 | 6,070 |
| Decrease/(Increase) in trade and other receivables | (14,505) | (8,555) |
| (Decrease)/Increase in trade and other payables | 28,681 | 412 |
| Cash generated from the operations | 18,259 | (2,073) |
| Interest received | 157 | 21 |
| Interest (paid) | (10,684) | (10,194) |
| Income taxes paid | (939) | (364) |
| Net cash from operating activities | 6,793 | (12,610) |
| Cash flows from investing activities | ||
| Proceeds from disposal of tangible assets and other | 46 | 337 |
| Acquisition of subsidiaries | (10,796) | (224) |
| Investment property and investment property under construction | (325,858) | (147,490) |
| Sale of investment properties to VGP European Logistics joint venture | 246,348 | - |
| Distribution by / (investment in) VGP European Logistics joint venture | 4,678 | - |
| (Loans provided to) / loans repaid by Joint Venture and associates | (28,546) | - |
| Net cash used in investing activities | (114,128) | (147,377) |
| Cash flows from financing activities | ||
| Net Proceeds / (cash out) from the issue / (repayment) hybrid | ||
| instruments | (62,960) | 60,000 |
| Proceeds from loans | 283,367 | 83,967 |
| Loan repayments | (51,536) | (3,914) |
| Net cash used in financing activities | 168,871 | 140,053 |
| Net increase / (decrease) in cash and cash equivalents | 61,536 | (19,934) |
| Cash and cash equivalents at the beginning of the period | 9,825 | 43,595 |
| Effect of exchange rate fluctuations | 235 | 348 |
| Reclassification to (-) / from held for sale | - | (14,184) |
| Cash and cash equivalents at the end of the period | 71,595 | 9,825 |
The table below presents a summary Income Statement of the Group's Joint Venture with Allianz Real Estate (VGP European Logistics) and the associates, all of which are accounted for using the equity method. VGP European Logistics is incorporated in Luxembourg and owns logistics property assets in Germany, the Czech Republic, Slovakia and Hungary. The associates relate to the 5.1% held directly by VGP NV in the subsidiaries of the Joint Venture holding assets in Germany. During the year, the associates SNOW S.à.r.l. and SUN S.à.r.l. were sold Tristan Capital Partners as part of the liquidation process of these respective associates.
| INCOME STATEMENT (in thousands of €) |
VGP European Logistics JV at 100% |
VGP European Logistics German Asset Companies at 100 % |
VGP European Logistics German Asset Companies at 5.1% |
VGP European Logistics JV at 50% |
2016 | 2015 |
|---|---|---|---|---|---|---|
| Gross rental income | 16,982 | 9,511 | 485 | 8,491 | 8,976 | - |
| Property Operating expenses | ||||||
| - service charge income / (expenses)(net) | 557 | 427 | 22 | 279 | 300 | - |
| - underlying property operating expenses | (1,074) | (517) | (26) | (537) | (563) | - |
| - property management fees | (1,315) | (752) | (38) | (658) | (696) | - |
| Net rental income | 15,150 | 8,669 | 442 | 7,575 | 8,017 | - |
| Net valuation gains / (losses) on investment properties |
13,384 | 6,198 | 316 | 6,692 | 7,008 | - |
| Administration expenses | (1,576) | (801) | (41) | (788) | (829) | - |
| Other income / (expenses) (net) | (493) | (75) | (5) | (246) | (250) | 191 |
| Operating profit / (loss) | 26,465 | 13,991 | 713 | 13,234 | 13,946 | 191 |
| Financial income | 224 | (250) | (12) | 112 | 100 | - |
| Financial expenses | (7,756) | (3,771) | (192) | (3,878) | (4,070) | - |
| Net financial result | (7,532) | (4,021) | (204) | (3,766) | (3,970) | - |
| Profit before taxes | 18,933 | 9,970 | 508 | 9,468 | 9,976 | 191 |
| Taxes | (3,980) | (1,735) | (88) | (1,990) | (2,078) | - |
| Profit for the year | 14,953 | 8,235 | 420 | 7,478 | 7,897 | 191 |
| BALANCE SHEET (in thousands of €) |
VGP European Logistics JV at 100% |
VGP European Logistics German Asset Companies at 100 % |
VGP European Logistics German Asset Companies at 5.1% |
VGP European Logistics JV at 50% |
2016 | 2015 |
|---|---|---|---|---|---|---|
| Investment properties | 574,291 | 390,341 | 19,907 | 287,145 | 307,053 | - |
| Other assets | 189 | 29 | 1 | 94 | 96 | - |
| Total non-current assets | 574,479 | 390,370 | 19,909 | 287,240 | 307,148 | - |
| Trade and other receivables | 8,335 | 6,972 | 356 | 4,168 | 4,523 | - |
| Cash and cash equivalents | 17,342 | 11,464 | 585 | 8,671 | 9,256 | - |
| Total current assets | 25,678 | 18,436 | 940 | 12,839 | 13,779 | - |
| Total assets | 600,157 | 408,806 | 20,849 | 300,078 | 320,928 | - |
| Non-current financial debt | 376,036 | 266,636 | 13,598 | 188,018 | 201,616 | - |
| Other non-current financial liabilities | 1,075 | 0 | - | 538 | 538 | - |
| Other non-current liabilities | 1,440 | 16 | 1 | 720 | 721 | - |
| Deferred tax liabilities | 32,723 | 21,318 | 1,087 | 16,361 | 17,449 | - |
| Total non-current liabilities | 411,274 | 287,970 | 14,686 | 205,637 | 220,323 | - |
| Current financial debt | 8,117 | 6,065 | 309 | 4,058 | 4,368 | - |
| Trade debts and other current liabilities | 12,894 | 9,663 | 493 | 6,447 | 6,940 | 311 |
| Total current liabilities | 21,011 | 15,728 | 802 | 10,505 | 11,308 | 311 |
| Total liabilities | 432,284 | 303,698 | 15,489 | 216,142 | 231,631 | 311 |
| Adjustment disposal of associates | - | - | - | - | 103 | - |
| Net assets | 167,872 | 105,108 | 5,361 | 83,936 | 89,194 | (311) |
| in thousands of € | 2016 | 2015 |
|---|---|---|
| Balance at the beginning of the period | (103) | 17 |
| Additions | 86,077 | - |
| Result of the year | 7,897 | 191 |
| Repayment of equity | (4,677) | - |
| Proceeds from sale of participations | - | (311) |
| Balance at the end of the period | 89,194 | (103) |
The table below includes the proportional consolidated income statement interest of the Group in the VGP European Logistics joint venture. The interest held directly by the Group (5.1%) in the German asset companies of the Joint Venture have been included in the 50% Joint Venture figures (share of VGP).
| 2016 | 2015 | |||||
|---|---|---|---|---|---|---|
| In thousands of € | Group | Joint Venture |
Total | Group | Joint Venture |
Total |
| NET CURRENT RESULT | ||||||
| Gross rental income | 16,806 | 8,976 | 25,782 | 17,073 | - | 17,073 |
| Service charge income / (expenses) | 1,035 | 300 | 1,335 | 422 | - | 422 |
| Property operating expenses | (1,703) | (1,259) | (2,962) | (972) | - | (972) |
| Net rental and related income | 16,138 | 8,017 | 24,155 | 16,523 | - | 16,523 |
| Property and development management fee income |
3,141 | - | 3,141 | 1,433 | - | 1,433 |
| Facility management income | 684 | - | 684 | 1,114 | - | 1,114 |
| Other income / (expenses) - incl. Administrative costs |
(16,778) | (1,079) | (17,857) | (13,998) | 191 | (13,807) |
| Operating result (before result on portfolio) |
3,185 | 6,938 | 10,123 | 5,072 | 191 | 5,263 |
| Net financial result (Excl. IAS 39) | (12,287) | (3,323) | (15,610) | (9,835) | - | (9,835) |
| Revaluation of derivative financial instruments (IAS 39) |
(4,619) | (647) | (5,266) | (319) | - | (319) |
| Taxes | 1,122 | (605) | 517 | 5,512 | - | 5,512 |
| Net current result | (12,599) | 2,363 | (10,236) | 430 | 191 | 621 |
| RESULT ON PROPERTY PORTFOLIO |
||||||
| Net valuation gains / (losses) on | ||||||
| investment property | 118,900 | 7,008 | 125,908 | 103,981 | - | 103,981 |
| Deferred taxes | (22,912) | (1,473) | (24,385) | (18,041) | - | (18,041) |
| Result on property portfolio | 95,988 | 5,535 | 101,523 | 85,940 | - | 85,940 |
| PROFIT FOR THE PERIOD | 83,389 | 7,897 | 91,286 | 86,370 | 191 | 86,561 |
The table below includes the proportional consolidated balance sheet interest of the Group in the VGP European Logistics joint venture. The interest held directly by the Group (5.1%) in the German asset companies of the Joint Venture have been included in the 50% Joint Venture figures (share of VGP).
| 2016 | 2015 | |||||
|---|---|---|---|---|---|---|
| In thousands of € | Group | Joint Venture |
Total | Group | Joint Venture |
Total |
| Investment properties | 550,262 | 307,053 | 857,315 | 173,972 | - | 173,972 |
| Other assets | 12,845 | 96 | 12,941 | 1,223 | - | 1,223 |
| Total non-current assets | 563,107 | 307,148 | 870,255 | 175,195 | - | 175,195 |
| Trade and other receivables | 19,432 | 4,523 | 23,955 | 4,927 | - | 4,927 |
| Cash and cash equivalents | 71,595 | 9,256 | 80,851 | 9,825 | - | 9,825 |
| Disposal group held for sale | 128,266 | - | 128,266 | 527,361 | - | 527,361 |
| Total current assets | 219,293 | 13,779 | 233,072 | 542,113 | - | 542,113 |
| Total assets | 782,400 | 320,928 | 1,103,328 | 717,308 | - | 717,308 |
| Non-current financial debt | 327,923 | 201,616 | 529,539 | 170,800 | - | 170,800 |
| Other non-current financial liabilities |
5,348 | 538 | 5,886 | 967 | - | 967 |
| Other non-current liabilities | 2,432 | 721 | 3,153 | 405 | - | 405 |
| Deferred tax liabilities | 20,012 | 17,449 | 37,461 | 8,247 | - | 8,247 |
| Total non-current liabilities | 355,715 | 220,323 | 576,038 | 180,419 | - | 180,419 |
| Current financial debt | 81,674 | 4,368 | 86,042 | 3,522 | - | 3,522 |
| Trade debts and other current liabilities |
35,496 | 7,043 | 42,539 | 10,342 | - | 10,342 |
| Liabilities related to disposal group | ||||||
| held for sale | 8,404 | - | 8,404 | 161,047 | - | 161,047 |
| Total current liabilities | 125,574 | 11,411 | 136,985 | 174,911 | - | 174,911 |
| Total liabilities | 481,289 | 231,734 | 713,023 | 355,330 | - | 355,330 |
| Net assets | 301,111 | 89,194 | 390,305 | 361,978 | - | 361,978 |
This means the value of the property at the time of acquisition. Any transfer costs paid are included in the acquisition price.
The annualised committed leases or the committed annualised rent income represents the annualised rent income generated or to be generated by executed lease – and future lease agreements.
Means all subsidiaries of VGP European Logistics S.à r.l. in which VGP NV holds a direct 5.1% participation, VGP MISV Comm. VA in which the Company holds 42.87%; and until December 2016 Snow Crystal S.à.r.l. and SUN S.à.r.l., in which the Company held 20% participation.
First option to terminate a lease.
The gross rent as contractually agreed in the lease on the date of signing.
Is a ratio calculated as net financial debt divided by total equity and liabilities.
As a borrower, VGP wishes to protect itself from any rise in interest rates. This interest rate risk can be partially hedged by the use of derivatives (such as interest rate swap contracts).
This is a valuation method based on a detailed projected revenue flow that is discounted to a net current value at a given discount rate based on the risk of the assets to be valued.
Estimated rental value (ERV) is the market rental value determined by independent property experts.
Is the capitalisation rate applied to the net income at the end of the discounted cash flow model period to provide a capital value or exit value which an entity expects to obtain for an asset after this period.
Day-to-day maintenance, alteration and improvement work. VGP employs an internal team of facility managers who work for the VGP Group and for third parties
The fair value is defined in IAS 40 as the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction. In addition, market value must reflect current rental agreements, the reasonable assumptions in respect of potential rental income and expected costs.
Gearing ratio: means the ratio calculated as consolidated Total Net Debt divided by the sum of the equity and total liabilities
International Accounting Standards / International Financial Reporting Standards. The international accounting standards drawn up by the International Accounting Standards Board (IASB), for the preparation of financial statements.
IAS 39 is an IAS/IFRS standard which sets out the way in which a company has to classify and evaluate its financial instruments in its balance sheet. It requires that all derivatives be booked in the balance sheet at their fair value, i.e. their market value at closing date.
The rent is contractually adjusted annually on the anniversary of the contract effective date on the basis of the inflation rate according to a benchmark index in each specific country.
The ratio of (initial) contractual rent of a purchased property to the acquisition price. See also Acquisition price.
The use of derived financial instruments to protect debt positions against interest rate rises.
The value of the portfolio, including transaction costs, as appraised by independent property experts
A transaction in which the parties swap interest rate payments for a given duration. VGP uses interest rate swaps to hedge against interest rate increases by converting current variable interest payments into fixed interest payments.
Means VGP European Logistics S.à r.l., the newly established 50:50 joint venture between the Issuer and Allianz.
The date on which a lease can be cancelled
The value of the total assets minus the value of the total liabilities.
Operating result plus net financial result (financial income - financial charges) less income and deferred taxes.
Total financial debt minus cash and cash equivalents.
The occupancy rate is calculated by dividing the total leased out lettable area (m²) by the total lettable area (m²) including any vacant area (m²).
Net current result + result on the portfolio.
Management of building and renovation projects. VGP employs an internal team of project managers who work exclusively for the company.
Independent property expert responsible for appraising the property portfolio.
The property investments, including property for lease, property investments in development for lease, assets held for sale and development land.
The first 15 VGP parks acquired by the Joint Venture at the end of May 2016, including the respective completed buildings, buildings under construction and development land at the end of May 2016.
Means SUTA s.r.o., having its registered office at Rozšířená 2159/15, Libeň, 182 00 Praha 8 and registered in the Commercial Register maintained by the Municipal Court in Prague, Section C, Entry No. 201835 and being a subsidiary of VGP.
The weighted average term of leases is the sum of the (current rent and committed rent for each lease multiplied by the term remaining up to the final maturity of these leases) divided by the total current rent and committed rent of the portfolio
The weighted average term of financial debt is the sum of the current financial debt (loans and bonds) multiplied by the term remaining up to the final maturity of the respective loans and bonds divided by the total current financial debt.
The sum of the contractual rent of a property portfolio to the acquisition price of such property portfolio.
Realised and non-realised changes in value compared to the most recent valuation of the expert, including the effective or latent capital gain tax payable in the countries where VGP is active.
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