Earnings Release • Mar 25, 2013
Earnings Release
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Press Release Regulated Information EMBARGO UNTIL 25 MARCH 2013 AT 7h00 A.M.
25 March 2013
1 On a net debt basis which is measured as : (Outstanding bank debt + shareholder loans) minus cash.
2012 has been a very challenging year for the industrial and logistics market in the mid European region. Due to the difficult economic environment, the amount of demand for new industrial/logistics space remained very low throughout the biggest part of the year which had a negative impact on the occupancy rates. However towards the end of the year the Group recorded strong renewed industrial investment activity and rising demand for lettable area not only in the Czech Republic but also in all other countries where the Group is active in.
VGP's activities during the year 2012 can be summarised as follows:
| CONSOLIDATED INCOME STATEMENT – ANALYTICAL FORM (in thousands of €) |
2012 | 2011 |
|---|---|---|
| NET CURRENT RESULT | ||
| Gross rental income | 3,071 | 14,445 |
| Service charge income / (expenses) | (61) | 830 |
| Property operating expenses | (388) | (1,345) |
| Net rental and related income | 2,622 | 13,930 |
| Other income / (expenses) - incl. administrative costs | (2,025) | (1,700) |
| Operating result (before result on portfolio) | 597 | 12,230 |
| Net financial result1 | 2,902 | (1,737) |
| Revaluation of interest rate financial instruments (IAS 39) | - | - |
| Taxes | (306) | (938) |
| Net current result | 3,193 | 9,555 |
| RESULT ON PROPERTY PORTFOLIO | ||
| Net valuation gains / (losses) on investment properties | 12,347 | 3,133 |
| Deferred taxes | (2,346) | (595) |
| Result on property portfolio | 10,001 | 2,538 |
| NET RESULT | ||
| Share in the result of associates | (1,615) | 844 |
| NET RESULT (reported) | 11,579 | 12,937 |
| RESULT PER SHARE | 2012 | 2011 |
|---|---|---|
| Number of ordinary shares | 18,583,050 | 18,583,050 |
| Net current result per share (in €) | 0.17 | 0.51 |
| Net result (reported) per share (in €) | 0.62 | 0.70 |
The gross rental income reflects the full impact of the income generating assets delivered during 2012 and the sale of the Estonian assets on 24 May 2012. On a like for like basis2 , the gross rental income for the financial year ending 31 December 2012 increased by 45.9% from € 2.1 million for the period ending 31 December 2011 to € 3.1 million for the period ending 31 December 2012.
1 Excluding the revaluation of interest rate financial instruments.
2 31 December 2011 figures amended to exclude the impacts of the sale of VGP CZ I and VGP CZ II during 2011 and excluding the pro rata profit and loss impact of the sold assets of VGP Estonia which occurred in May 2012.
During 2012 VGP continued to successfully sign new and or renew existing leases despite the difficult economic environment. The signing of new annualised committed leases were in excess of € 10.8 million1 in total of which € 5.2 million2 related to new lettable area and € 5.6 million3 to the renewal of existing or replacement leases.
The Group's property portfolio reached an occupancy rate of 94.9% at the end of December 2012 (excluding the associates) which was a fraction better than the 94.5% as at 31 December 2011. The occupancy rate of the associates stood at 94.5% at the end of 2012 (compared to 100% at the end of 2011) reflecting the difficult economic environment.
The signed committed lease agreements represent a total of 99,731 m² of lettable area with the weighted average term of the committed leases standing at 9.8 years at the end of December 2012 compared to 8.6 years as at 31 December 2011.
The net valuation of the property portfolio as at 31 December 2012 shows a net valuation gain of € 12.3 million against a net valuation gain of € 3.1 million per 31 December 2011.
The net valuation as at 31 December 2012 consists of an € 12.1 million unrealised gain on the existing completed projects and projects under construction and a net realised valuation gain of € 0.3 million which is composed of a € 1.1 million realised gain on the disposal of the VGP Estonia assets, assets held by Brnenska rozvojova spolecnost, a.s (a new subsidiary acquired during the first half of 2012) and the final settlement of the VGP CZ II transaction, and a realised loss of € 0.8 million resulting from the disposal of VGP CZ IV a.s.
As at 31 December 2012 the financial income reflected the full benefit of the interest income on loans made available to associates which resulted in a financial income of € 3.4 million as at 31 December 2012 compared to € 2.4 million as at 31 December. The financial expenses significantly decreased to € 0.6 million as at the end December 2012 from € 5.8 million at the end of December 2011. This decrease was driven by the full impact of the repayment of shareholder loans and the reduction in bank debt.
Loans to associates grew slightly from € 45.3 million as at 31 December 2011 to € 45.8 million as at 31 December 2012. Bank debt increased slightly from € 15.2 million (before reclassification to liabilities related to disposal group held for sale) at the end of December 2011 to € 16.2 million at the end of December 2012.
1 € 8.3 million related to associates
2 € 2.7 million related to associates
3 € 5.6 million related to associates
The fair value of the investment property and the investment property under construction (the "property portfolio") as at 31 December 2012 increased with 41.9% to € 101.6 million compared to € 71.6 million as at 31 December 2011.
The total property portfolio (including the associates), excluding development land, is valued by the valuation expert at 31 December 2012 based on a market rate of 8.42%1 (compared to 8.34% as at 31 December 2011) applied to the contractual rents increased by the estimated rental value on unlet space.
During the year 9 building were completed.
For its own account VGP delivered 4 buildings i.e. 1 building of 11,243 m² at VGP Park Györ (Hungary), 2 buildings totalling 20,843 m² at VGP Park Hradek nad Nisou (Czech Republic) and one building of 12,789 m² at VGP Park Tallinn subsequently sold through the VGP Estonia transaction. All buildings are fully leased.
For the account of its associates VGP delivered another 3 buildings i.e. 2 buildings totalling 5,772 m² at VGP Park Horni Pocernice and 1 building of 13,056 m² at VGP Park Turnov. All buildings are fully leased.
The Group has currently a total of 6 completed buildings (73,378 m²) in its investment portfolio with another 55 buildings (601,217 m²) under management.
At the end of December 2012 there were 8 buildings under construction.
For its own account VGP has following 6 new buildings under construction: 1 building in each of the following Czech parks, VGP Park Tuchomerice, VGP Park Hradek nad Nisou and 2 buildings in VGP Park Brno. In the other countries: 1 building in VGP Park Malacky (Slovakia) and VGP Park Timisoara (Romania). The new buildings under construction on which several pre-leases have already been signed, represent a total future lettable area of 71,485 m².
On behalf of its associates VGP is constructing 2 new buildings: 1 new building in VGP Park Horni Pocernice and 1 building in VGP Park Nýřany.
The new buildings under construction on which several pre-leases have already been signed, represent a total future lettable area of 15,281 m².
During 2012 VGP continued to look at further expanding its land bank. During the year 168,579 m² of new development land located in the Czech Republic was acquired allowing the development of 55,000 m² of lettable area.
1 Yield applicable for total portfolio including the associates. If the associates would have been excluded the yields would have been 8.86% at the end of December 2012 compared to 9.07% as at the end of December 2011.
VGP has currently a land bank in full ownership of 1,090,900 m². The land bank allows VGP to develop besides the current projects under construction (71,485 m²) a further 130,000 m²of lettable area within the Czech Republic and 176,000 m² of lettable area outside the Czech Republic.
Besides this VGP has currently another 480,000 m² of new plots of land under option, subject to permits, allowing to develop approx. 216,000 m² of new projects. VGP expects to be able to secure the majority of the necessary permits over the next few months.
VGP has been putting in place solid foundations during 2012 to allow the Group to expand and grow in Germany.
VGP has been able to secure 2 top locations in Germany. One plot of land of 218,000 m² is located close to the airport of Frankfurt and allows the Group to develop some 100,000 m² of lettable area. VGP expects to buy this plot of land by the middle of 2013, and will start developing the site as soon as possible thereafter. VGP has drawn significant interest from blue chip companies wanting to re-locate to this new VGP Park.
Besides this VGP has secured a 108,000 m² plot of land on a top location in Leipzig. This plot is situated close to the Leipzig Messe and will allow VGP to develop in total 50,000 m² of lettable area. This area has seen significant inflow of investments from German companies such as BMW, DHL etc. and has developed itself as a regional logistic hub. VGP should be well placed with this plot of land to take full benefit from these inbound regional investments.
Finally, VGP is currently negotiating a number of built to suit projects which would be built under very long lease contracts i.e. + 10 years. Although discussions for built to suit are usually a bit more difficult to conclude, VGP expects that it should be able to win a number of these projects.
During the year of 2012 bank debt increased from € 15.2 million as at 31 December 2011 (before reclassification to liabilities related to disposal group held for sale) to € 16.2 million as at 31 December 2012.
The increase in the financial debt during the year was due to additional drawings on existing and new credit facilities in Slovakia and Hungary.
In December 2012 VGP was able to sign a € 57 million committed credit facility with UniCredit Bank which ensures that the total future development pipeline in the Czech Republic is now financed.
In April 2012 VGP completed the sale of an 80% equity interest in VGP CZ IV a.s. to the European Property Investors Special Opportunities, L.P. (EPISO), a property fund co-advised by AEW Europe and Tristan Capital Partners. In May 2012 VGP Estonia completed the sale of its assets composed of newly built logistic property of 40,000 m² in Tallinn (Estonia) to East Capital Baltic Property Fund II, a fund managed by East Capital.
During 2012 the loans provided to associates increased slightly to € 45.8 million compared to € 45.3 million at the end of 2011. These loans have a significant positive effect on the interest income.
For the period ending 31 December 2012, the financial income included a € 3.4 million interest income on loans granted to associates (compared to a € 2.4 million interest income on loans granted to associates and a € 1.6 million net foreign exchange gain as at 31 December 2011).
The financial expenses as at 31 December 2012 are mainly made up of € 0.6 million interest expenses related to financial debt (€ 5.7 million as at 31 December 2011) and a positive impact of € 0.4 million (€ 0.2 million per 31 December 2011) related to capitalised interests.
The main reason for the variance relates to the movements in the underlying bank and shareholder debt. As at 31 December 2012 the outstanding bank debt amounted to € 16.2 million compared to € 15.2 million (before reclassification to liabilities related to disposal group held for sale) as at 31 December 2011.
Taxes increased from € 1.5 million as at 31 December 2011 to € 2.7 million as at 31 December 2012. The change in the tax line is mainly due to the variance of the fair value adjustment of the property portfolio and has therefore no cash effect.
In 2012, VGP completed the total or partial sale of most of its income generating assets. With the proceeds of these sales VGP continued to progress the expansion of the land bank by acquiring and securing additional land plots in the Czech Republic and more importantly in the new German markets. These new land plots should start generating additional development profits and additional rent income within the next 12-18 months.
VGP believes that it is therefore well positioned to start a new development cycle which should generate continued significant development gains over the next few years.
| Annual report 2012 | 10 April 2013 |
|---|---|
| First quarter trading update 2013 | 10 May 2013 |
| General meeting of shareholders | 10 May 2013 |
| 2013 half year results | 26 August 2013 |
| Third quarter trading update 2013 | 14 November 2013 |
Mr Jan Van Geet Mr Dirk Stoop CEO CFO Tel. + 420 602 404 790 Tel.+32 2 737 74 06 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 associates, 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 of its own real estate portfolio.
VGP is quoted on Euronext Brussels and the Main Market of the Prague Stock Exchange.
INCOME STATEMENT (in thousands of €) 2012 2011 Gross rental income 3,071 14,446 Service charge income 1,439 5,217 Service charge expenses (1,500) (4,388) Property operating expenses (388) (1,345) Net rental and related income 2,622 13,930 Unrealised valuation gains / (losses) on investment properties 12,057 7,541 Realised valuation gains / (losses) on disposal of subsidiaries and investment properties 290 (4,408) Net valuation gains / (losses) on investment properties 12,347 3,133 Property result 14,969 17,063 Administrative cost (3,996) (3,576) Other income 2,836 2,680 Other expenses (865) (805) Net operating profit before net financial result 12,944 15,362 Financial income 3,456 4,060 Financial expenses (554) (5,797) Net financial result 2,902 (1,737) Result before taxes 15,846 13,625 Taxes (2,652) (1,532) Result after taxes (consolidated companies) 13,194 12,093 Share in result of associates (1,615) 844 Net result 11,579 12,937
| RESULT PER SHARE | 2012 | 2011 |
|---|---|---|
| Basic earnings per share (in €) | 0.62 | 0.70 |
| Diluted earnings per share (in €) | 0.62 | 0.70 |
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
| STATEMENT OF COMPREHENSIVE INCOME (in thousands of €) | 2012 | 2011 |
|---|---|---|
| Net result | 11,579 | 12,937 |
| Other comprehensive income / (loss) | ||
| Interest rate hedging derivatives | - | 5,409 |
| Tax relating to components of other comprehensive income | - | (1,028) |
| Net profit / (loss) recognised directly into equity | - | 4,381 |
| Total comprehensive income / (loss) of the period | 11,579 | 17,318 |
| Attributable to: | ||
| Equity holders of the parent | 11,579 | 17,318 |
| Minority interests | - | - |
For the year ended 31 December 2012
| ASSETS (in thousands of €) | 2012 | 2011 |
|---|---|---|
| Intangible assets | 58 | 43 |
| Investment properties | 101,629 | 71,643 |
| Property, plant and equipment | 241 | 278 |
| Investments in associates | (545) | 965 |
| Other non-current receivables | 45,758 | 45,313 |
| Deferred tax assets | 79 | 243 |
| Total non-current assets | 147,220 | 118,485 |
| Trade and other receivables | 9,037 | 9,138 |
| Cash and cash equivalents | 19,123 | 16,326 |
| Disposal group held for sale | - | 33,944 |
| Total current assets | 28,160 | 59,408 |
| TOTAL ASSETS | 175,380 | 177,893 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | 2012 | 2011 |
|---|---|---|
| (in thousands of €) | ||
| Share capital | 62,251 | 62,251 |
| Retained earnings | 88,940 | 92,415 |
| Other reserves | 69 | 69 |
| Shareholders' equity | 151,260 | 154,735 |
| Non-current financial debt | 3,916 | 4,160 |
| Other non-current financial liabilities | - | - |
| Other non-current liabilities | 951 | 28 |
| Deferred tax liabilities | 3,358 | 1,520 |
| Total non-current liabilities | 8,225 | 5,708 |
| Current financial debt | 12,242 | 4,692 |
| Other current financial liabilities | - | - |
| Trade debts and other current liabilities | 3,653 | 5,724 |
| Liabilities related to disposal group held for sale | - | 7,034 |
| Total current liabilities | 15,895 | 17,450 |
| Total liabilities | 24,120 | 23,158 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 175,380 | 177,893 |
| Other reserves | |||||||
|---|---|---|---|---|---|---|---|
| STATEMENT OF CHANGES IN EQUITY (in thousands of €) |
Statutory share capital |
Capital reserve ¹ |
IFRS share capital |
Retained earnings |
Share premium |
Hedging reserve |
Total equity |
| Balance as at 1 January 2011 | 175,361 | (113,110) | 62,251 | 119,431 | 69 | (5,409) | 176,342 |
| Other comprehensive income / (loss) | - | - | - | - | - | - | |
| Result of the period | - | - | - | 12,937 | - | - | 12,937 |
| Effect of disposals | - | - | - | - | - | 5,409 | 5,409 |
| Total comprehensive income / (loss) | - | - | - | 12,937 | - | 5,409 | 18,346 |
| Dividends to shareholders | - | - | - | - | - | - | - |
| Share capital distribution to shareholders | (39,953) | 39,953 | - | (39,953) | - | - | (39,953) |
| Balance as at 31 December 2011 | 135,408 | (73,157) | 62,251 | 92,415 | 69 | - | 154,735 |
| Balance as at 1 January 2012 | 135,408 | (73,157) | 62,251 | 92,415 | 69 | - | 154,735 |
| Other comprehensive income / (loss) | - | - | - | - | - | - | - |
| Result of the period | - | - | - | 11,579 | - | - | 11,579 |
| Effect of disposals | - | - | - | - | - | - | - |
| Total comprehensive income / (loss) | - | - | - | 11,579 | - | - | 11,579 |
| Dividends to shareholders | - | - | - | - | - | - | - |
| Share capital distribution to shareholders | (15,052) | 15,052 | - | (15,052) | - | - | (15,052) |
| Balance as at 31 December 2012 | 120,356 | (58,105) | 62,251 | 88,940 | 69 | - | 151,260 |
¹ Capital reserve relates to the elimination of the contribution in kind of the shares of a number of Group companies and the deduction of all costs in relation to the issuing of the new shares and the stock exchange listing of the existing shares from the equity of the company, at the time of the initial public offering ("IPO").
| Cash flows from operating activities Result before taxes 15,846 13,625 Adjustments for: Depreciation 139 164 Unrealised (gains) /losses on investment properties (12,057) (7,541) Realised( gains) / losses on disposal of subsidiaries and investment properties (290) 4,408 Unrealised (gains) / losses on financial instruments and foreign exchange 400 - Net interest paid / (received) (2,733) 3,508 Operating profit before changes in working capital and provisions 1,305 14,164 Decrease/(Increase) in trade and other receivables (227) (12,443) (Decrease)/Increase in trade and other payables (3,635) 1,194 Cash generated from the operations (2,556) 2,915 Net Interest paid / (received) 2,733 (3,508) Income taxes paid (219) (119) Net cash from operating activities (43) (712) Cash flows from investing activities Proceeds from disposal of subsidiaries 8,671 153,777 Proceeds from disposal of tangible assets 24,252 1,512 Acquisition of subsidiaries (1,807) - (Loans provided to) / loans repaid by associates 1,811 - Investment property and investment property under construction (13,934) (47,721) Net cash from investing activities 18,994 107,568 Cash flows from financing activities Gross dividends paid - Net Proceeds / (cash out) from the issue / (repayment) of share capital (15,052) (39,954) Proceeds from loans 8,010 18,005 Loan repayments (9,186) (73,721) Net cash from financing activities (16,228) (95,670) Reclassification to (-) / from held for sale - (6) Net increase / (decrease) in cash and cash equivalents 2,723 11,180 Cash and cash equivalents at the beginning of the period 16,326 5,341 Effect of exchange rate fluctuations 74 (195) Cash and cash equivalents at the end of the period 19,123 16,326 |
CASH FLOW STATEMENT (in thousands of €) | 2012 | 2011 |
|---|---|---|---|
| Net increase / (decrease) in cash and cash equivalents | 2,723 | 11,180 |
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