Earnings Release • May 14, 2018
Earnings Release
Open in ViewerOpens in native device viewer
• Rental income growth: +1.8% on a like-for-like basis
• Consolidated revenue: €434.6 million (+7.3% after impact of IFRS 151 , +16.5% on a comparable basis)
Unaudited figures at 31 March 2018
1 The Group has applied IFRS 15 (Revenue from Contracts with Customers) since 1 January 2018. This standard, which impacts the results of the Group's property development operations, leads to faster recognition of revenue based on the stage of completion and the resulting net property income.
| New orders (incl. tax) | 31/03/2018 | 31/03/2017 | Change | ||
|---|---|---|---|---|---|
| Institutional investors | 1,087 units | 42% | 819 units | 34% | +33% |
| Individuals - Residential Buyers | 713 units | 27% | 553 units | 23% | +29% |
| Individuals - Investors | 807 units | 31% | 1,050 units | 43% | -23% |
| Total in units | 2,607 units | 2,422 units | +8% | ||
| Institutional investors | €194 million | 33% | €167 million | 28% | +16% |
| Individuals - Residential Buyers | €217 million | 36% | €188 million | 31% | +16% |
| Individuals - Investors | €184 million | 31% | €247 million | 41% | -26% |
| Total in € millions | €594 million | €601 million | -1% |
The Group recorded a strong increase in the number of new orders from residential buyers (+29%) and institutional investors (+33%). Cumulative sales grew by 8%.
In terms of value, the level of sales was stable (-1%), with an average sale price of €228,000 (incl. tax), compared to €248,000 (incl. tax) for Q1 2017.
Regarding short and long-term Office investments, numerous negotiations are under way and will lead to signing in the coming months.
During the quarter, Altarea Cogedim recorded rental income of €46.5 million (-0.2%). On a like-for-like basis, this represents growth of 1.8%.
With effect from 1 January 2018, Altarea Cogedim will recognise its revenue in accordance with the now effective IFRS 15.
The main change concerns the use of the percentage of completion method to recognise revenue from property development projects. This percentage now includes the land cost in the calculation, which is equivalent to the acceleration of revenue recognition.
Thus, revenue of almost €630 million, which should have been recognised during and after 2018, is considered to have been recognised before 1 January 2018, with a positive impact of approximately +€46 million on opening equity (Group share) and a negative impact on revenue for Q1 2018, which grew by 7.3% rather than 16.5% on a comparable basis.
By taking into account the new IFRS 15 standard, Q1 2018 revenue amounted to €434.6 million, an increase of 7.3% compared with published Q1 2017 revenue2 .
| With application of IFRS 15 at 1 January 2018 | ||||
|---|---|---|---|---|
| In € millions (excl. tax) | Q1 2018 | Q1 2017 published | Change | |
| Rental income | 46.5 | 46.6 | -0.2% | |
| Services | 4.6 | 4.4 | +4.2% | |
| Property development revenue | - | 2.0 | n/a | |
| Retail | 51.0 | 52.9 | -3.6% | |
| Revenue | 339.5 | 280.0 | +21.2% | |
| Services | 0.1 | 0.5 | n/a | |
| Residential | 339.6 | 280.5 | +21.0% | |
| Revenue | 42.0 | 69.9 | -39.9% | |
| Services | 2.0 | 1.7 | n/a | |
| Office | 44.0 | 71.6 | -38.5% | |
| Revenue | 434.6 | 405.1 | +7.3% |
On a comparable basis, Q1 2018 revenue calculated according to the former consolidation standards would amount to €471.8 million, representing growth of 16.5%.
| Former standard | |||
|---|---|---|---|
| In € millions (excl. tax) | Q1 2018 | Q1 2017 published | Change |
| Rental income | 46.5 | 46.6 | -0.2% |
| Services | 4.6 | 4.4 | +4.2% |
| Property development revenue | - | 2.0 | n/a |
| Retail | 51.0 | 52.9 | -3.6% |
| Revenue | 371.2 | 280.0 | +32.5% |
| Services | 0.1 | 0.5 | n/a |
| Residential | 371.2 | 280.5 | +32.3% |
| Revenue | 47.6 | 69.9 | -32.0% |
| Services | 2.0 | 1.7 | n/a |
| Office | 49.5 | 71.6 | -30.8% |
| Revenue | 471.8 | 405.1 | +16.5% |
Taking IFRS 15 into account, the backlog for property development (Residential and Office) amounts to €3,535 million at end-March 2018, down 15.5% compared to end-2017 (on a non-comparable basis).
| With application of IFRS 15 at 1 January 2018 | ||||
|---|---|---|---|---|
| Backlog (excl. tax) | 31/03/2018 | 31/12/2017 published |
Change | |
| Residential | €2,764 million | €3,273 million | -15.6% | |
| Office | €771 million | €908 million | -15.1% | |
| Property Development Backlog | €3,535 million | €4,181 million | -15.5% |
2 The Group has chosen to apply IFRS 15 according to the cumulative catch-up method, in its communications.
3 Residential Backlog: the residential backlog consists of revenues (excl. tax) from notarised sales to be recognised on a percentage-of-completion basis and individual and block reservations to be notarised.
Offices Backlog: the offices backlog consists of revenues (excl. tax) from notarised sales to be recognised in the accounting turnover using the percentage of completion method, sales agreements not yet regularised by notarial deed (signed "CPI" development contracts) and fees to be received from third parties for signed contracts.
On a comparable basis, this backlog amounts to €4,251 million (+1.7%).
| Former standard | |||
|---|---|---|---|
| Backlog (excl. tax) | 31/03/2018 | 31/12/2017 published |
Change |
| Residential | €3,382 million | €3,273 million | +3.3% |
| Office | €869 million | €908 million | -4.3% |
| Property Development Backlog | €4,251 million | €4,181 million | +1.7% |
Net financial debt (bank and bond) amounts to €2,691 million at 31 March 2018, compared with €2,526 million at 31 December 2017 (+€165 million). This change is mainly due to the implementation of Property Development projects and Retail REIT investments.
As announced in the annual results, the Group will ask the General Shareholders' Meeting of 15 May 2018 to approve the payment of a dividend of €12.50 per share, up +8.7% compared to the dividend paid in respect of the 2016 financial year.
General Shareholders' Meeting: Tuesday 15 May 2018 at 11:00 AM Dividend payment: Thursday 24 May 2018 (ex-coupon date: Tuesday 22 May) H1 2018 results: Thursday 26 July 2018 after closing
Altarea Cogedim is the leading property developer in France. As both a developer and an investor, the Group operates in the three main property markets (Retail, Residential and Offices), leading major mixed-use urban renewal projects in France. The Group has the required expertise in each sector to design, develop, market and manage made-to-measure property products. In Retail, Altarea Cogedim manages standing assets of €4.7 billion. Listed in Compartment A of Euronext Paris, Altarea has a market capitalisation of €3,3 billion at 31 March 2018.
Eric Dumas, Chief Financial Officer [email protected]. Tel: +33 1 44 95 51 42
Catherine Leroy, Analyst and Investor Relations [email protected]. Tel: +33 1 56 26 24 87
Agnès Villeret, Press Relations – KOMODO [email protected]. Tel: +33 6 83 28 04 15
This press release does not constitute an offer to sell or solicitation of an offer to purchase Altarea shares. For more detailed information concerning Altarea, please refer to the documents available on our website www.altareacogedim.com.
This press release may contain some forward-looking statements. While the Company believes such statements are based on reasonable assumptions at the date of publication of this document, they are by nature subject to risks and uncertainties which may lead to differences between real figures and those indicated or inferred from such declarations.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.