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Cofinimmo — Interim / Quarterly Report 2012
Aug 1, 2012
3933_ir_2012-08-01_4d4397fe-e81c-4cc0-99b2-82e3f2345d2f.pdf
Interim / Quarterly Report
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REGULATED INFORMATION
Embargo until 01.08.2012, 8:00 AM CET
HALF-YEARLY FINANCIAL REPORT 2012
- Net current result per share Group share (excluding IAs 39 impact) of €4.14 at 30.06.12, vs. €3.75 at 30.06.2011
- Positive variation of the property portfolio valuation, on a like-for-like basis (+0.25%)
- Net Asset Value per share, expressed at fair value, including IAS 39 impact, of €91.58
- Forecasts for net current result (€7.47 per share) and gross dividend (€6.50 per ordinary share and €6.37 per preference share) confirmed for 2012
Brussels, 01.08.2012, 8:00 AM CET
Contents
| Interim Management Report | P. 2 |
|---|---|
| Summary of the activities and outlook | P. 2 |
| Consolidated key figures | P. 4 |
| Evolution of the portfolio | P. 6 |
| Commercial results | P. 11 |
| Real estate assets | P. 13 |
| Investment program 2012-2014 | P. 15 |
| Sustainable development and management policy | P. 19 |
| Management of financial resources | P. 20 |
| Information on shares and bonds | P. 25 |
| Events after 30.06.2012 | P. 28 |
| Risk management | P. 29 |
| Corporate Governance | P. 32 |
| Summary of the Financial Statements | P. 32 |
| Global result – Form Royal Decree of 07.12.2010 | P. 33 |
| Consolidated income statement – Analytical form | P. 35 |
| Consolidated balance sheet | P. 38 |
| Calculation of debt ratio | P. 39 |
| Statement of cash flows | P. 40 |
| Consolidated statement of changes in shareholders' equity | P. 41 |
| Notes on the consolidated accounts | P. 46 |
| Statement of Conformity | P. 60 |
| Appendices: | P. 62 |
| Real estate expert's report | P. 63 |
| Statutory auditor's report | P. 68 |
1. Interim Management Report
1.1. Summary of the activities and outlook
a. Activities of the first half year of 2012
For the first six months of 2012, the Group's net current result – Group share, without taking into account the impact of IAS 39, reached €4.14 per share, compared to €3.75 for the first half of 2011. The increase of this result is due to a non recurrent indemnity paid by Belfius Bank during the first quarter of this year in compensation of the early termination of its lease of the Livingstone building. This exceptional indemnity of 21 months of rent, amounting to €11.20 million, represents €0.71 per share.
The net result – Group share comes to €4.43 per share, compared to €5.01 for the first six months of 2011.
During the first half of 2012, Cofinimmo was successful in strengthening its positions in the elderly care sector and has realised two Public-Private Partnerships.
The following investments were made in the healthcare sector:
- A co-investment agreement was signed with Senior Assist, a reference operator in the healthcare sector in Belgium, relating to a property portfolio of nursing homes with a total value of nearly €150 million.
- An EHPAD1 was acquired in France under the partnership agreement with the ORPEA Group for an amount of €22.2 million.
Furthermore, Cofinimmo signed two Public- Private Partnerships ("PPP"):
- The Group acquired a newly built asset located in Dendermonde, occupied by the Federal Police for 18 years, for an amount of €15.57 million.
- Cofinimmo won a call for tenders by the Université Libre de Bruxelles ("ULB" Brussels University) for the renovation of two student residence buildings. The estimated total investment amounts to €14.2 million. The assets are rented to the University for 27 years.
The investments of the first half of this year enabled the Company to not only strengthen long term cash flows but also to lengthen its average lease maturity to 11.5 years.
The diversification strategy initiated by the Company in 2005 proves to be successful in balancing the risks within the portfolio and in achieving, for the first half year of 2012, a positive valuation of the portfolio of 0.25%. At 30.06.2012, the total portfolio's fair value variation comes to €+8.1 million, compared to €-15.9 million at 30.06.2011. This increase is due to the indexation of the nursing home leases and an increase in the valuation of the Pubstone portfolio in Belgium and of the MAAF insurance branches in France.
1 EHPAD (Etablissement d'Hébergement pour Personnes Âgées Dépendantes). In France, this is the most widespread form of institution for the elderly.
At the same time, Cofinimmo strengthened its financial resources during the first half of the year:
- by signing a syndicated loan, five years tenor, for €220 million with five banks at favourable market conditions;
- by offering its shareholders to reinvest their net 2011 dividend in new shares, thus enabling the company to increase its equity by €32.1 million1 ;
- by increasing its funding through the sale of 119,186 treasury shares for an amount of €11.1 million.
These financial resources will allow the Group to finance additional projects in the various segments in which it has developed its expertise.
The conventional financial debt ratio (Loan-to-value ratio) was at 53.09% at 30.06.2012. In accordance with Cofinimmo's financial policy and based on the current commitments, the financial debt ratio should be close to 50% by the end of 2012. The average interest rate decreased at 4.01% at 30.06.2012 compared to 4.20% for 2011.
b. Outlook
Given the trend in the results for this first half-year, the Board of Directors decided that the target of a net current result - Group share of €7.47 per share for the 2012 financial year should be maintained, despite the increase in number of shares due to the subscription of shareholders to an optional dividend in shares for the financial year 2011.
On this basis, and barring unforeseen events, it also maintains the dividend targets for the current financial year, which are identical to those for the preceding financial year, namely €6.50 gross for ordinary shares and €6.37 gross for preference shares.
c. Events after 30.06.2012
On 19.07.2012, Cofinimmo and the Buildings Agency (Belgian Federal State) signed an addendum to the lease with respect to the North Galaxy building for which several incentives have been granted. The addendum provides for a nine year extension of the lease. This transaction allows to increase the average lease length in the office segment by 2.4 years and the average lease length of the global portfolio by 1.1 year.
On 26.07.2012, Cofinimmo successfully issued a 7.5 year bond maturing on 07.02.2020 for a total amount of €100 million. The bond will offer a fixed coupon of 3.59%, payable annually. The transaction is scheduled to close on 07.08.2012. It will result in a lengthening to 4 years of the average debt maturity.
1 See also our press releases dated 02.05.2012 and 29.05.2012, available on our website.
1.2. Consolidated key figures
a. Global Information
| (X €1,000,000) | 30.06.2012 | 31.12.2011 |
|---|---|---|
| Portfolio of investment properties (in fair value) | 3,257.4 | 3,189.4 |
| (x €1000) | 30.06.2012 | 30.06.2011 |
| Property result | 114,692 | 105,307 |
| Operating result before result on portfolio | 97,271 | 89,990 |
| Financial result | -28,466 | -28,733 |
| Net current result (Group share) | 64,705 | 56,113 |
| Result on portfolio (Group share) | 4,855 | 19,948 |
| Net result (Group share) | 69,559 | 76,061 |
| 30.06.2012 | 31.12.2011 | |
| Operating costs/average value of the portfolio under management1 | 0.92% | 0.83% |
| Operating margin | 84.81% | 85.24% |
| Weighted residual lease term2 (in years) |
11.5 | 11.3 |
| Occupancy rate3 | 95.59% | 95.34% |
| Gross rental yield at 100% occupancy | 7.04% | 6.98% |
| Net rental yield at 100% occupancy | 6.50% | 6.56% |
| Average interest rate on borrowings4 | 4.01% | 4.20% |
| Debt ratio5 | 51.03% | 49.89% |
| Loan-to-value ratio6 | 53.09% | 51.50% |
b. Figures per share7 (in €)
| Results | 30.06.2012 | 30.06.2011 |
|---|---|---|
| Net current result – Group share – excluding IAS 39 impact | 4.14 | 3.75 |
| IAS 39 impact | -0.02 | -0.06 |
| Net current result – Group share | 4.12 | 3.69 |
| Realised result on portfolio | 0.01 | 2.92 |
| Unrealised result on portfolio8 | 0.30 | -1.60 |
| Net result – Group share | 4.43 | 5.01 |
1 Average value of the portfolio plus the value of sold receivables relating to buildings whose maintenance costs payable by the owner are still met by the Group through total cover insurance premiums.
2 Up until the date of the tenant's first break option.
3 Calculated according to actual rents and the estimated rental value for unoccupied buildings. The occupancy rate for offices only stands at 91.52% while that of the Brussels office market is 88.5% (source: DTZ Research).
4 Including bank margins and depreciation costs of hedging instruments pertaining to the period.
5 Legal ratio calculated in accordance with legislation regarding Sicafis/Bevaks as financial and other debts divided by total assets.
6 Ratio referred to in credit agreements, calculated by dividing net financial debt by the total of the portfolio's fair value and finance lease receivables.
7 Ordinary and preference shares.
8 This is mainly the variation in the fair value of investment properties, the exit tax and, in 2011, the recovery of deferred taxes.
Information per share1 based on the Belfius termination indemnity split on a prorata temporis basis over the financial year 2012 (in €)
| Results | 30.06.2012 | 30.06.2011 |
|---|---|---|
| Net current result – Group share – excluding IAS 39 impact | 3.78 | 3.75 |
| IAS 39 impact | -0.02 | -0.06 |
| Net current result – Group share | 3.76 | 3.69 |
| Realised result on portfolio | 0.01 | 2.92 |
| Unrealised result on portfolio2 | 0.30 | -1.60 |
| Net result – Group share | 4.07 | 5.01 |
| Net Asset Value per share | 30.06.2012 | 31.12.2011 |
|---|---|---|
| Revalued net asset value in fair value3 after distribution of the dividend for the year 2011 |
91.58 | 89.66 |
| Revalued net asset value in investment value4 after distribution of the dividend for the year 2011 |
96.18 | 94.19 |
| Diluted Net Asset Value per share5 | 30.06.2012 | 31.12.2011 |
|---|---|---|
| Diluted revalued net asset value in fair value3 after distribution of |
93.25 | 92.52 |
| dividend for the year 2011 | ||
| Diluted revalued net asset value in investment value4 after distribution of |
97.32 | 96.51 |
| dividend for the year 2011 |
c. EPRA performance indicators6 (in € per share)
| 30.06.2012 | 30.06.2011 | |
|---|---|---|
| EPRA Earnings | 4.14 | 3.75 |
| 30.06.2012 | 31.12.2011 | |
| EPRA Net Asset Value (NAV) | 99.71 | 104.117 |
| EPRA Adjusted Net Asset Value (NNNAV) | 93.25 | 98.297 |
| EPRA Net Initial Yield (NIY) | 6.38% | 6.26% |
| EPRA "Topped-up" NIY | 6.26% | 6,22% |
| EPRA Vacancy Rate | 4.35% | 4.84% |
1 Ordinary and preference shares.
2 This is the variation in the fair value of investment properties, the exit tax and, in 2011, the recovery of deferred taxes.
3 Fair value: after deduction of transactions costs (mainly transfer taxes) from the value of investment properties.
4 Investment value: before deduction of transactions costs (mainly transfer taxes) from the value of investment properties.
5 By assuming the theoretical conversion of convertible bonds issued by Cofinimmo and bonds repayable in shares issued by Cofinimur I.
6 Main financial performance indicators applicable to listed real estate companies determined according to EPRA recommendations (www.epra.com). These data are not compulsory according to the Sicafi regulation and are not subject to verification by public authorities.
7 According to the principles of the "EPRA Best Practices Recommendations" 2011, the EPRA Net Asset Value (NAV) and the EPRA Adjusted Net Asset Value (NNNAV) are not expressed ex-dividend.
1.3. Evolution of the portfolio
a. Acquisitions
Nursing homes/clinics
Belgium
In January 2012, Cofinimmo and Senior Assist finalised an agreement relating to a property portfolio of nursing homes operated by Senior Assist of a total value of nearly €150 million. Of this portfolio, €80 million corresponds to buildings already owned by Cofinimmo, €24 million to new buildings under operation and €46 million to projects still to be developed. Initial rental yields from the properties in this portfolio range from 6.50% to 7.04% in double net equivalent1 . All are let or pre-let with long 27-year leases featuring index-linked rents.
The company Maison Saint-Ignace, owner of the nursing home of the same name, of which Cofinimmo already owned the majority of shares, was registered as an institutional Sicafi/Bevak on 13.12.2011 and was renamed Silverstone SA on 31.01.2012.
Cofinimmo and Senior Assist are the sole shareholders in Silverstone, with stakes of 95% and 5% respectively2 .
France
On 19.04.2012, the ORPEA Group and the Cofinimmo Group acquired the premises of an EHPAD3 in Paris. The transaction was carried out under the partnership agreement signed by the two groups in November 20114 . The acquisition was made by the first joint venture, Cofinea I SAS, a company under French law in which Cofinimmo holds a 51% stake and the ORPEA Group the remaining 49%. Cofinea I SAS enjoys the SIIC (Société d'Investissements Immobiliers Cotée or French listed real estate investment company) status.
The EHPAD, located on Rue Germaine Tailleferre in Paris's 19th arrondissement, was built in 2004 and has a total area of 4,265m² for 107 operational beds.
The establishment is operated by the ORPEA Group, with which Cofinimmo has agreed a "triple net" commercial lease for a term of 12 years. Appended to this is a green lease agreed by the parties, in accordance with the Grenelle environmental legislation. This includes environmental provisions, particularly collaboration between the landlord and the tenant to improve the building's environmental performance.
The purchase price paid by Cofinea I SAS was €20.9 million, corresponding to the fair value of the building as determined by the independent real estate expert, plus registration fees payable to
1 The yield in double net equivalent allows comparison with the yields on offices.
2 See also our press release dated 31.01.2012, available on our website. Cofinimmo and Senior Assist are related parties within the meaning of Articles 18 § 1 and 31 § 2 of the Royal Decree of 07.12.2010. The described transaction was made with respect to the procedures applicable in case of conflicts of interests and at normal market conditions.
3 EHPAD (Etablissement d'Hébergement pour Personnes Âgées Dépendantes). In France, this is the most widespread form of institution for the elderly.
4 See also our press release dated 15.11.2011, available on our website. Cofinimmo and ORPEA are related parties within the meaning of Articles 18 § 1 and 31 § 2 of the Royal Decree of 07.12.2010. The described transaction was made with respect to the procedures applicable in case of conflicts of interests and at normal market conditions.
the French government on the sale, making the asset's total investment value €22.2 million. The rental yield is 6.15% in "double net" equivalent and 5.90% in "triple net" equivalent.
Cofinea I SAS will use the equity method of accounting in the consolidated accounts of Cofinimmo and the accounts of ORPEA1 .
Property distribution networks
Cofinimur I
On 10.01.2012, the Cofinimmo Group, via its subsidiary Cofinimur I, purchased two insurance services agencies, located in Limoges and Montceau-les-Mines respectively, for a total amount of €0.43 million. This amount corresponds to their investment value as determined by the independent real estate expert. They are leased to MAAF2 and generate a gross rental yield in line with that of the rest of the portfolio of agencies acquired at the end of 2011 (7.31%).
Public-Private Partnerships (PPP)
Police station
On 11.04.2012, the Cofinimmo Group acquired from the Group Cordeel 100% of the shares of the company Immopol Dendermonde SA. This company's sole asset is a building located at Kroonveldlaan 30, Dendermonde, whose construction work was completed at the end of March.
The building is let for an 18 year period to the Buildings Agency (Belgian Federal State) under a lease contract which began on 01.04.2012. It is occupied by the Federal Police. The rent is indexed annually. At the end of the lease, the Buildings Agency can choose to a) renew the lease for a minimum period of three years, b) vacate the building, or c) buy the building at a price equal to the conventional value depreciated at a 3% rate per year.
The conventional value of the building is €15.57 million, including land. This value is not superior to the fair value of the asset as determined by the independent real estate expert. The initial gross yield stands at 7%.
The building, which has an area of over 9,000m², enjoys an excellent level of energy performance and thermal insulation: E 12 (compared with a maximum authorised level in the Flemish Region of E 100) and K 20 (compared with a maximal authorised level in the Flemish Region of K 45)3 .
1 See also our press release dated 24.04.2012, available on our website.
2 Subsidiary of French insurance group Covéa. In December 2011, the Cofinimmo Group acquired a portfolio of 263 insurance services agencies leased to MAAF. See also our press release dated 21.12.2011, available on our website.
3 See also our press release dated 12.04.2012, available on our website. Cofinimmo and Cordeel are related parties within the meaning of Articles 18 § 1 and 31 § 2 of the Royal Decree of 07.12.2010. The described transaction was made with respect to the procedures applicable in case of conflicts of interests and at normal market conditions.
Student residence buildings
After a call for tenders by the Université Libre de Bruxelles ("ULB" - Brussels University) for a Public-Private Partnership, Cofinimmo won the contract for "works and services relating to student residence buildings" of the ULB.
The project comprises two buildings located in the immediate vicinity of the Solbosch Campus in Brussels, with a total surface of 11,284m². The first building, located Avenue des Courses 29-33, 1050 Brussels, has 242 rooms and is in need of a complete renovation. The second building, located at Avenue Depage 31, 1000 Brussels, was built in 1997, has 104 rooms and does not need immediate renovation works.
The ULB owns both buildings and has granted Cofinimmo a long 27-year lease. Cofinimmo has undertaken to carry out major renovation works on the "Courses" building and to make certain improvements to the "Depage" building, according to specifications defined by the ULB. Cofinimmo will also be responsible for the maintenance – technical maintenance only – of the buildings throughout the term of the lease to the ULB.
In return, Cofinimmo has signed a long-term lease with the ULB, which will rent both buildings as a whole for 27 years. The ULB pays an annual rent of €1.21 million, indexed annually. At the end of this 27-year lease contract, the full ownership of the buildings reverts to the ULB.
The estimated total investment of Cofinimmo in this project will be €14.2 million and the net internal yield is expected to be 6.60%1 .
1 See also our press release dated 23.04.2012, available on our website.
b. Divestments
Property distribution networks
Pubstone
During the second quarter, the Cofinimmo Group, via its subsidiary Pubstone SA, sold three pubs located in Flanders1 , for a total gross amount of €1.59 million, 6.38% above the value assigned to them by the independent real estate expert at 31.12.2011.
c. Constructions and renovations
In order to maintain at all times a portfolio with high-standard buildings, Cofinimmo regularly carries out (re)development projects. These aim to meet the needs of the occupants or to assist tenants in their expansion. For this purpose, the company uses construction techniques that are respectful of the environment.
Hence, in the first half of 2012, the company carried out constructions and renovations totalling €11.9million, including €10.1million in the nursing home sector, €1.0 million in the office sector, €0.7 million in the property distribution networks sector, and €0.1 million in the "Others" segment2 .
The main projects managed by Cofinimmo's Project Management department are:
1 Maalderijstraat 3 and Suikerrui 14 in Antwerp and Tiensestraat 72 in Leuven.
2 The "Others" segment comprises semi-industrial buildings, retail outlets, leisure facilities and a police station.
Nursing homes/clinics
| Property | Operator | Type of works |
Number of (additional) beds |
(Additional) surface area |
(Scheduled) end of works |
|---|---|---|---|---|---|
| Works started in 2011 | |||||
| Zevenbronnen - Walshoutem |
Anima Care | Extension | +17 beds +24 service flats |
+3,023m² | Q2 2012 |
| 't Smeedeshof - Oud-Turnhout |
Armonea | Extension | +64 service flats |
+6,542m² | Q3 2012 |
| Dageraad - Antwerp | Armonea | New construction |
95 beds | 5,090 m² | Q1 2013 |
| Damiaan - Tremelo | Senior Living Group |
Renovation and extension |
+42 beds | +5,918m² | Q1 2013 |
| Parkside - Brussels | Le Noble Age | Renovation and extension |
+15 beds | +1,990m² | Q1 2013 |
| Prinsenpark - Genk | Senior Living Group |
Extension | +34 beds +40 service flats |
+4,213m² | Q1 2013 |
| Works started in 2012 | |||||
| La Quiétude/Les VII Voyes - Védrin |
Senior Assist | Extension | +45 beds | +2,998m² | Q2 2012 |
| Zonnetij - Aartselaar | Senior Living Group |
Extension | +26 beds | +1,216m² | Q1 2013 |
| Lucie Lambert - Halle |
ORPEA | Extension | +55 beds | +1,767m² | Q4 2013 |
| Solva - Aalst | Senior Assist | New construction |
+80 beds + 29 service flats |
7,503m² | Q4 2013 |
| De Mouterij - Aalst | Senior Assist | New construction |
+106 beds +16 service flats |
7,894m² | Q1 2014 |
| Les Jours Heureux - Lodelinsart |
Senior Assist | New construction |
+20 beds | +1,350m² | Q1 2014 |
| Brise d'Automne & Chêne - Ransart |
Senior Assist | Renovation and extension |
+25 beds | +3,074m² | Q2 2014 |
| Noordduin - Koksijde | Armonea | New construction |
+87 beds | 6,440m² | Q4 2014 |
| Susanna Wesley - Brussels |
Armonea | New construction |
+ 84 beds | 4,900m² | Q4 2014 |
Offices
| Property | Type of works | Surface | (Scheduled) |
|---|---|---|---|
| area | end of | ||
| works | |||
| Tervuren 270-272 | Mid-scale renovation (phase II, III and IV) | +4,058m² | Q2 2013 |
| Livingstone I | Office conversion into residential | 16,000m² | |
| Livingstone II | Office renovation | 17,000m² | Q2 2014 |
| Woluwe 34 | Office conversion into residential | 6,680m² | Q3 2014 |
Public-Private Partnerships (PPP)
| Property | Type of works |
Surface area | (Scheduled) end of works |
|---|---|---|---|
| Student housing - Courses building - Brussels |
Renovation | 8,100m² (243 rooms, 8 studios and 1 caretaker apartment) |
Q3 2013 |
| Prison - Leuze-en-Hainaut | Construction | 28,300m² | Q2 2014 |
1.4. Commercial results
a. Rental situation of the portfolio
As of 30.06.2012, the occupancy rate stands at 95.59% 1 for the total portfolio and at 91.52% for the office segment alone, the latter outperforming by 3.02% the Brussels office market occupancy rate (88.5%) (source: DTZ Research). The properties other than office buildings are wholly rented. Overall, during the first half of 2012, Cofinimmo signed leases for over 17,000m² of office space.
| Offices – Occupancy rate | Cofinimmo | Market |
|---|---|---|
| Antwerp periphery | 87.21% | 90.0% |
| Brussels | 91.15% | 88.5% |
| Central Business District (CBD) | 95.91% | 91.8% |
| Decentralised | 87.41% | 83.0% |
| Periphery | 90.65% | 82.8% |
| Tenants | Contractual rents | Average residual lease |
|---|---|---|
| Global portfolio | term (in years) | |
| AB Inbev | 13.4% | 18.3 |
| Belgian Public Sector | 12.3% | 11.6 |
| Korian | 9.0% | 7.5 |
| Armonea | 7.1% | 21.9 |
| Senior Living Group | 6.9% | 22.8 |
| Top 5 tenants | 48.7% | 15.8 |
| International Public Sector | 6.4% | 5.0 |
| Axa Belgium | 5.1% | 5.1 |
| MAAF | 3.5% | 9.2 |
| Senior Assist | 3.1% | 25.2 |
| ORPEA France | 2.6% | 7.2 |
| Top 10 tenants | 69.3% | 13.8 |
| Top 20 tenants | 80.3% | 13.3 |
| Other tenants | 19.7% | 4.1 |
| TOTAL | 100.0% | 11.5 |
In the office sector, public tenants represent 37.3% of the portfolio, making rental incomes very stable.
1 The occupancy rate applies only to buildings in a state suitable for occupancy on the date of calculation (buildings in operation).
b. Average residual lease term (in contractual rents)
The average remaining term of all leases in effect on 30.06.2012 is 11.5 years, if every tenant were to exercise their first termination option ("break option"). This period increases to 12.4 years if the break option is not exercised and the tenants remain in the leased premises until the contractual expiry of their leases.
Maturity of leases by segment (number of years until first "break" option)
Maturity of the portfolio
| Leases >9 years | 52.9% |
|---|---|
| Offices (public sector) | 13.0% |
| Nursing homes/clinics | 21.4% |
| Distribution property networks | 15.3% |
| Offices (private sector) | 1.6% |
| Others | 1.6% |
| Leases 6-9 years | 14.3% |
| Offices | 3.9% |
| Nursing homes/clinics | 9.5% |
| Distribution property networks | 1.0% |
| Leases <6 years | 32.8% |
| Offices | 30.3% |
| Nursing homes/clinics | 1.5% |
| Distribution property networks | 0.6% |
| Others | 0.4% |
Over 50% of the leases are long-term leases (more than nine years).
1.5. Real estate assets
| GLOBAL PORTFOLIO OVERVIEW Extract from the report prepared by the independent real estate experts Winssinger & Associates and PricewaterhouseCoopers based on the investment value |
|||||
|---|---|---|---|---|---|
| (X €1,000,000) 30.06.2012 31.12.2011 |
|||||
| Total investment value of the portfolio | 3,382.70 | 3,311.31 | |||
| Projects and development sites | -130.44 | -59.20 | |||
| Total properties under management 3,252.26 3,252.11 |
|||||
| Contractual rents | 218.81 | 216.47 | |||
| Gross yield on properties under management 6.73% 6.66% |
|||||
| Contractual rents and estimated rental value on unlet space | 228.90 | 227.04 | |||
| Gross yield at 100% portfolio occupancy 7.04% 6.98% |
|||||
| Occupancy rate of properties under management1 | 95.59% | 95.34% |
At 30.06.12, the "Projects and development sites" item mainly includes the buildings Livingstone I and II. It also includes projects or extensions in the nursing home segment, the most important being located in Tremelo, Uccle and Laeken .
| Properties | Surface area of superstructure (in m²) |
Contractual rents (x €1,000) |
Occupancy rate |
Rent + ERV on unlet premises (x €1000) |
Estimated Rental Value (ERV) (x €1000) |
|---|---|---|---|---|---|
| Offices | 534,684 | 81,991 | 90.45% | 90,648 | 82,828 |
| Offices with sold receivables |
217,041 | 24,666 | 95.28% | 25,889 | 25,889 |
| Total offices & writeback of lease payments sold and discounted |
751,725 | 106,657 | 91.52% | 116,537 | 108,717 |
| Nursing homes/ clinics |
611,948 | 70,954 | 100.00% | 70,954 | 67,838 |
| Pubstone | 365,600 | 29,289 | 100.00% | 29,289 | 27,396 |
| Cofinimur I | 61,045 | 7,685 | 97.40% | 7,890 | 8,305 |
| Others | 31,537 | 4,227 | 100.00% | 4,227 | 3,497 |
| Total investment properties & writeback of lease payments sold and discounted |
1,821,855 | 218,812 | 95.59% | 228,897 | 215,753 |
| Projects & renovations | 34,341 | 390 | 744 | 765 | |
| Development sites | 11 | 11 | 11 | ||
| GENERAL TOTAL PORTFOLIO |
1,856,196 | 219,213 | 229,652 | 216,529 |
1 Calculated based on rental income.
| Segment | Fair value | Property result after direct costs |
|||
|---|---|---|---|---|---|
| (in €1,000) | (as a %) | Changes over the period1 |
(in €1,000) | (as a %) | |
| Offices | 1,536,136 | 47.2% | -1.73% | 54,099 | 49.7% |
| Brussels Leopold/Louise districts |
339,422 | 10.4% | -4.74% | 18,533 | 17.0% |
| Brussels Centre/North | 263,137 | 8.1% | -0.51% | 7,802 | 7.2% |
| Brussels Decentralised | 614,482 | 18.9% | -1.65% | 17,666 | 16.2% |
| Brussels Periphery & Satellites |
146,007 | 4.5% | 1.13% | 4,937 | 4.5% |
| Antwerp | 60,816 | 1.9% | 0.15% | 1,575 | 1.5% |
| Other Regions | 112,272 | 3.4% | -0.13% | 3,586 | 3.3% |
| Nursing homes/clinics | 1,137,472 | 34.9% | 2.12% | 34,770 | 31.9% |
| Belgium | 725,307 | 22.3% | 1.80% | 20,678 | 19.0% |
| France | 412,165 | 12.6% | 2.71% | 14,092 | 12.9% |
| Property distribution networks |
519,804 | 16.0% | 1.52% | 18,217 | 16.7% |
| Pubstone - Belgium | 263,166 | 8.1% | 2.27% | 9,658 | 8.9% |
| Pubstone - Netherlands | 149,178 | 4.6% | -0.09% | 4,737 | 4.3% |
| Cofinimur I - France | 107,460 | 3.3% | 1.95% | 3,822 | 3.5% |
| Others | 63,951 | 1.9% | 6.16% | 1,825 | 1.7% |
| TOTAL PORTFOLIO | 3,257,363 | 100.0% | 0.25% | 108,911 | 100.0% |
The valuation of the portfolio by the independent real estate experts resulted in a positive change in fair value for the first half of 2012 of €+8.1 million (€+0.6 million for the first quarter and €+7.5 million for the second quarter) compared to a negative variation of €-15.9 for the first half of 2011. While the office portfolio shows a depreciation, due mainly to the decrease of the value of the Livingstone I and II and Science 15-17 buildings in need of renovation, the segments "Nursing homes/Clinics", "Distribution property networks" and "Others" confirm their resilience.
| Yield per segment | Offices | Nursing homes and clinics in Belgium |
Nursing homes and clinics in France |
Property distribution networks |
Others | Total |
|---|---|---|---|---|---|---|
| Gross rental yield at 100% occupancy |
7.76% | 6.15% | 6.53% | 6.59% | 7.13% | 7.04% |
| Net rental yield at 100% occupancy |
6.67% | 6.09% | 6.52% | 6.46% | 7.10% | 6.50% |
1 On a like-for-like basis.
1.6. Investment program 2012-2014
Cofinimmo's 2012-2014 investment programme totals €242 million, of which €41 million relates to the second half of 2012 , €103 million to 2013 and €98 million to 2014.
In € million:
The "PPP" refurbishment budget relates to the student residence "Courses", located in Brussels. The offices refurbishment budget, on the other hand, relates mainly to the renovation of the Livingstone II, Science 15-17, Tervuren 270-272 and Woluwe 34 buildings.
Main office renovation projects1
Livingstone I-II
The Livingstone site comprises two distinct entities, Livingstone I and II.
The Livingstone I office building (16,000m²), which is divided into four units, was constructed in 1976 and has 10 floors.
Benefiting from an advantageous location in the heart of the European Quarter, close to green areas and with easy accessibility, the conversion of Livingstone I into a residential building will address the area's housing needs. The building will be developed into four separate apartment units, providing a total of around 125 apartments to be sold. The ground floor will be occupied by retail outlets and/or independent professionals with direct access to the adjacent streets.
From an energy perspective, Cofinimmo is aiming for K 30 and E 60 levels for the building. The functional structure of the building, allowing a very interesting redistribution into apartments, with large outdoor spaces, as well as the ambitions for energy and environmental performance have contributed to the selection of the Livingstone I project as the winner of the "residential conversion of unused office buildings" prize awarded by the Brussels-Capital Region.
1 See also our 2011 Annual Financial Report, available on our website.
The various permits required for the renovation works on Livingstone I were granted during the first half of the year. Construction will begin once a certain level of pre-sales of apartments has been achieved. Marketing is in progress and is being carried out by the Victoire Properties real estate agency and the company, Cordeel. The latter has guaranteed Cofinimmo a minimum sale price for the apartments, insofar the pre-sales are successful, which means there is no risk for unsold units on Cofinimmo's side.
The Livingstone II building, constructed in 1996, boasts ± 17,000m² of office space over seven levels and will benefit from complete restructuring and renovation. A new entrance lobby will be created on the corner of Rue Joseph-II and Rue Philippe le Bon, directly opposite the metro station. On the ground floor, a multi-purpose space will be designed, perfectly suited to an office layout or large meeting rooms.
The permits for the works on Livingstone II were issued during the first half of the year. Works are due to begin in the first quarter of 2013 and are expected to last 12 months.
The total budget for works on these two major redevelopment projects is estimated at €40 million, including VAT, of which €27 million for the renovation of Livingstone I, borne by the general contractor Cordeel, and € 13 million for the renovation of Livingstone II, borne by Cofinimmo.
Science 15-17
This building has a superstructure of ±20,000m², divided between eight floors and two underground parking levels, and is located on the corner of Rue Belliard and Rue de la Science. It dates from the early 1970s and was extended around 10 years later.
Since it no longer meets to current needs for modern and sustainable office buildings, Cofinimmo has decided to entirely redevelop it. The company has opted for a mixed project: the lower floors will be dedicated to commercial or cultural activities while the upper floors will retain their identity as office spaces. The monotony of the architecture on Rue Belliard will be broken through the creation of an esplanade on the corner of Rue Belliard and Rue de la Science. A transparent atrium over five levels, serving as the entrance to the building, will provide a view of the internal garden located behind the building, fitting perfectly into the new urban vision adopted.
Cofinimmo is aiming for a maximum level E rating of 60 and a "very good" BREEAM certification for the conversion of the Science 15-17 building. The project's concept and sustainability attributes, its energy performance ambition and environmental quality led the Brussels-Capital Region to name the project as a winner of the 2011 Exemplary Building competition.
Applications have been submitted for the various permits required for this redevelopment. Works will begin after the existing tenant (European Commission) departs and the permits have been obtained. The works are then due to take two years.
Woluwe 34
The Woluwe 34 office building, located on Boulevard de la Woluwe, which Cofinimmo has owned since 1996, was part of a project to build four office buildings on a shared underground car park. Its above-ground area is 7,325m² over nine floors. The below-ground area is 3,230m² and is used for car parking, archives and technical rooms. The building now has its own car park and a separate entrance. The building has never been subject to a major renovation.
Given its age, Cofinimmo has decided to carry out a complete renovation of the building. The office building will be reconverted into apartments, leaving the option of creating retail outlets and limited office space on the ground floor. These three intended uses (residential, retail and/or offices) fit in perfectly with the mix that already exists in the district.
In terms of energy and sustainability, the target is an overall K value of 40 and an E value of 70 for each apartment. Cofinimmo submitted its application for the Woluwe 34 project in response to the call for projects for the conversion of the unoccupied offices into apartments and was selected as the winner.
Applications have been submitted for urban planning and environment permits.
The total budget for the works on this redevelopment project is estimated at between €10 million and €12 million, excl. VAT.
1.7. Sustainable development and management policy
a. Green Charter
Since 01.01.2012, Cofinimmo offers its office tenants a Green Charter. This is a collaboration agreement signed by Cofinimmo, Cofinimmo Services and the tenant, whose purpose is to actively promote sustainable development and encourage all parties to reduce the environmental impact of the rented property.
Nine tenants have signed the charter since its launch. Together, they represent ±7.9% of all the tenants in Cofinimmo's office portfolio (61,740m²).
In France, Cofinimmo signed its first green lease with the ORPEA Group. This relates to the EHPAD located in Paris and acquired on 19.04.20121 .
b. BREEAM certification
Cofinimmo is pursuing its "BREEAM In-Use"2 certification policy, with priority given to buildings currently being marketed. "BREEAM In-Use" is a sub-programme of BREEAM which certifies cost reduction and environmental performance improvement processes in relation to existing buildings.
Four buildings were certified in the first half year: Bourget 42 and 44, Square de Meeus 23 and Omega Court. A "Good" rating was awarded to the four buildings themselves as well as for their property management.
c. ISO 14001:2004 certification
The Environmental Management System ("EMS") of Cofinimmo's entire internally managed office portfolio was approved by Bureau Veritas following standard ISO 14001:2004. This certification applies to the property management of the portfolio, as well as its project management.
ISO 14001:2004 specifies the requirements of an "EMS" enabling an organisation to develop and implement measurable objectives thanks to key performance indicators.
d. Cofinimmo makes parking spaces at its head office available to the general public
This year, Cofinimmo has signed an agreement with Be Park, a parksharing website, to lease the parking spaces in the basement level below its head office after working hours. Cofinimmo hopes to contribute in this way to the resolution of urban mobility problems.
1 See also pages 6 and 7 of the press release.
2 BREEAM ("Building Research Establishment Environmental Assessment Method" - www.breeam.org) is the leading standard in terms of sustainable construction, i.e. economic use of natural resources. BREEAM analysis of a building's environmental performance relates to the following aspects: Energy, Water, Materials, Transport, Waste, Pollution, Health, Well-being, Management, Land, and Ecology.
1.8. Management of financial resources
a. Financing
Sale of treasury shares
During the first quarter of 2012, Cofinimmo sold 119,186 ordinary own shares on the stock market for an average net price of €93.40 per share, thereby raising €11.1 million. As at 30.06.2012, the share's closing price was €87.98 and the net asset value per share, in fair value, was €91.58.
Strengthening of shareholder equity through the distribution of dividends in shares
The shareholders' equity was increased by €32.1 million, further to a decision by the shareholders of Cofinimmo to reinvest 40.8% of their 2011 dividends in new ordinary shares1 .
Signing of a new syndicated loan
On 20.04.2012, Cofinimmo signed a new syndicated loan for €220 million with five banks. This revolving credit facility has a term of five years.
Credit line extension
A bilateral bank credit line for an amount of €25 million maturing on 30.06.2012 has been extended for five years.
Considering the loans already in place and unused, all loan instalments to be reimbursed in 2012 and 63% of instalments to be reimbursed in 2013 have now already been refinanced.
1 See also our press releases dated 02.05.2012 and 29.05.2012, available on our website.
b. Debt
Debt structure
At 30.06.12, the Cofinimmo Group consolidated borrowings amounted to € 1,768.90 million, comprising:
- €262.03 million in the form of three debenture loans (bond issues), the first issued in 2004 by Cofinimmo Luxembourg SA and the second by Cofinimmo SA in 2009. Both issues mature in 2014 for a nominal amount of €100.00 million each. The third loan was issued by Cofinimmo SA in 2010 and matures in 2013 for a nominal amount of €50.00 million;
- €169.97 million in the form of bonds convertible into Cofinimmo shares, issued in April 2011 at a nominal amount of €173.31 million; this bond issue is booked at market value on the balance sheet;
- €310.00 million in commercial papers, including €295.00 million with a term of less than one year and €15.00 million with an initial term of more than three years;
- €4.20 million in in minimum coupons of the mandatory convertible bonds issued by Cofinimur I in December 2011;
- €1,002.67 million in bilateral medium- and long-term loans from 10 banks, with an initial term of three to 10 years;
- €20.03 million in other loans and advances (account debits).
At 30.06.2012, the Cofinimmo Group current consolidated borrowings amounted to € 303.34 million, including:
- €295.00 million in commercial paper with a term of less than one year;
- €8.34 million in other loans and advances (account debits).
The short-term borrowings (€303.34 million) are fully covered by the undrawn portions of longterm confirmed credit facilities totalling €581.60 million at 30.06.2012.
Repayment schedule of the long-term financial commitments1 of €2,014.6 million at 30.06.2012 (in € million)
The long-term financial commitments, with a total outstanding amount of €2,014.60 million at 30.06.2012, mature in a staggered manner up to 2019, with a maximum of 19.42% maturing in 2014. In the second half of 2012, 2.98% of the outstanding amount will mature, while 17.72% will mature in 2013. All loan instalments to be reimbursed in 2012 and 63% of the instalments to be reimbursed in 2013 have now already been refinanced. The average maturity of Cofinimmo's debt (excluding short-term commercial paper, which is fully covered by the undrawn portions of longterm credit facilities) comes from 3.3 years at 31.12.2011 to 3.8 years at 30.06.2012.
The average interest rate on Cofinimmo's debt, including bank margins and the amortisation costs of hedging instruments for the period, decreased from 4.20% in 2011 to 4.01% for the first six months of 2012. The historically low Euribor rate is offset by the exercise of derivative instruments, in particular FLOORs and Interest Rate Swaps.
1 This schedule takes into account the capital from financial commitments and excludes payment of interest (generally on a
Consolidated debt ratio
As at 30.06.2012, Cofinimmo is in compliance with regulatory and conventional financial ratios. Cofinimmo's regulatory debt ratio1 is 51.03% (vs. 49.89% at 31.12.2011) and is coherent with the moderate risk profile of assets and cashflow and – in particular – with the long residual term of the leases agreed. It should be recalled that the statutory maximum debt ratio for Sicafis/Bevaks is 65%2 . Based on the commitments for the second half of 2012, Cofinimmo's regulatory debt ratio, all things being equal, should be below 50% at the end of 2012.
The conventional financial debt ratio3 , as defined in the banking lines documentation, was 53.09% as at 30.06.2012. If the Group exceeds the threshold of 57.5%, it is agreed that it must return to below the threshold within six months. Cofinimmo's financial policy aims to preserve a financial debt ratio close to 50%. Based on the commitments for the second half of 2012, Cofinimmo's conventional debt ratio, all things being equal, should be close to 50% at the end of 2012.
1 Financial and other debts divided by total assets in accordance with the Royal Decree dated 07.12.2010.
2 As a result of article 54 of the Royal Decree of 10.12.2010 on Sicafis/Bevaks, the public Sicafi/Bevak must, where the consolidated debt ratio exceeds 50% of the consolidated assets, draw up a financial plan accompanied by an execution schedule, detailing the measures taken to prevent this debt ratio exceeding 65% of the consolidated assets. See also pages 164-165 of our 2011 Annual Financial Report, available on our website.
3 Ratio referred to in credit agreements, calculated by dividing net financial debt by the total of the portfolio's fair value and finance lease receivables.
Interest rate hedging
Situation of interest rate hedging for future years as at 30.06.2012 (in € million)
| CAP options bought | ||||
|---|---|---|---|---|
IRS1
| Interest Rate Swaps | 140M | 140M | 140M | 140M | 140M | 140M | 800M | 800M | |
|---|---|---|---|---|---|---|---|---|---|
| 4.5% | 4.10% | 4.10% | 4.10% | 4.10% | 4.10% | 4.10% 4.10% | |||
| 4.0% | 140M | 140M | 140M | 140M | 140M | 140M | :140M | ||
| 2.5% | 2.106% | 2.365% | |||||||
| $2.0\%$ | 660M | 800M |
| FLOOR options sold | |||||
|---|---|---|---|---|---|
Bank margins should be added to the above rates.
Assuming constant gearing, 78.58% of the interest rate risk2 is covered in 2012, 92.71% in 2013, 87.06% in 2014 and 2015, 64.45% in 2016 and 2017 and 45.23% until 2018. The sensitivity of Cofinimmo's result to interest rate fluctuations is explained in the section " Risk management".
Financial rating
1
At the time of writing, the Standard & Poor's rating is BBB for the long-term and A-2 for the short-term.
Average of Interest Rate Swaps with various strikes and assuming that IRS subject to early cancellation by the bank are active until their maturity date.
2 Calculated based on derivative "in-the-money" instruments: IRS and FLOORS sold.
1.9. Information on shares and bonds
a. Share performance
Ordinary share (COFB)
| 30.06.2012 | 31.12.2011 | 31.12.2010 | |
|---|---|---|---|
| Share price (over 6/12 months, in €) | |||
| Highest | 95.00 | 103.90 | 105.30 |
| Lowest | 83.38 | 82.31 | 90.25 |
| At close | 87.98 | 90.82 | 97.41 |
| Average | 89.05 | 94.77 | 97.59 |
| Dividend yield1 | 7.30% | 6.86% | 6.66% |
| Gross return2 (over 12 months) |
4.17% | 0.09% | 5.37% |
| Volume (over 6/12 months, in number of shares) on | |||
| Euronext | |||
| Average daily volume | 38,778 | 34,683 | 31,087 |
| Total volume | 5,041,135 | 9,017,465 | 8,113,577 |
| Number of outstanding ordinary shares at end of | |||
| period3 | 14,877,432 | 14,126,279 | 13,614,485 |
| Market capitalisation at end of period (x €1,000) | 1,308,916 | 1,365,960 | 1,326,187 |
| 4 Free float zone |
90% | 90% | 90% |
Preference shares (COFP1 & COFP2)
| COFP1 | COFP1 | COFP2 | COFP2 | |
|---|---|---|---|---|
| 30.06.2012 | 31.12.2011 | 30.06.2012 | 31.12.2011 | |
| Share price (over 6/12 months, in €) | ||||
| At close | 110.19 | 93.50 | 80.01 | 76.51 |
| Average | 98.42 | 93.45 | 80.55 | 88.5 |
| Dividend yield1 | 6.47% | 6.82% | 7.91% | 7.20% |
| Gross return2 (over 12 months) |
24.32% | 7.35% | 12.48% | -8.28% |
| Volume (over 6/12 months, in number of shares) |
||||
| Average daily volume5 | 39 | 61 | 30 | 34 |
| Total volume | 75 | 245 | 690 | 864 |
| Number of shares | 465,797 | 513,297 | 360,823 | 554,512 |
| Market capitalisation at end of period (x €1000) |
51,216 | 52,522 | 28,869 | 52,519 |
1 Gross dividend on average share price.
2 Increase in share price + dividend yield.
3 Excluding treasury shares.
4 Using the Euronext method.
5 Average calculated based on number of stock exchange days on which a volume was recorded.
Bonds
| Cofinimmo Luxembourg SA | Cofinimmo SA | |||
|---|---|---|---|---|
| €100 million – 2004-2014 | €100 million – 2009-2014 | |||
| ISIN XS0193197505 | ISIN BE0002171370 | |||
| 30.06.2012 | 31.12.2011 | 30.06.2012 | 31.12.2011 | |
| Market price | ||||
| (over 6/12 months, as a % of nominal price) |
||||
| At close | 103.56% | 103.06% | 103.33% | 102.42% |
| Average | 103.45% | 103.10% | 102.83% | 102.11% |
| Yield to maturity (12-month average) | 4.01% | 4.13% | 3.98% | 4.24% |
| Effective yield at issue | 5.06% | 5.06% | 4.54% | 4.54% |
| Interest coupon | ||||
| Gross | 5.25% | 5.25% | 5.00% | 5.00% |
| Net | 4.15% | 4.15% | 3.95% | 3.95% |
| Number of securities1 | 1,000,000 | 1,000,000 | 100,000 | 100,000 |
| Cofinimmo SA €50 million – 2010-2013 ISIN BE6202995393 |
Cofinimmo SA Convertible bonds €173.31 million – 2011-2016 ISIN BE0002176429 |
|||
|---|---|---|---|---|
| 30.06.2012 | 31.12.2011 | 30.06.2012 | 31.12.2011 | |
| Market price (over 6/12 months, as a % of nominal price) |
||||
| At close | 99.17% | 98.48% | 98.07% | 93.19% |
| Average | 99.06% | 97.77% | 96.47% | 97.40% |
| Yield to maturity (12-month average) | 3.43% | 4,12% | 4.10% | 3.70% |
| Effective yield at issue | 2.94% | 2.94% | 3.13% | 3.13% |
| Interest coupon | ||||
| Gross | 2.94% | 2.94% | 3.13% | 3.13% |
| Net | 2.32% 2.32% |
2.47% | 2.47% | |
| Number of securities1 | 1,000 | 1,000 | 1,486,332 | 1,486,332 |
b. 2011 dividends
The Board of Directors gave the holders of both ordinary and preference shares the option of payment of the 2011 dividend in new ordinary shares or in cash or a combination of the two.
At the end of the offer period, a total of 40.8% of the dividend coupons had been re-contributed to the capital in return for new shares. This resulted in the issuance of 390,778 new ordinary shares, at a subscription price of €82.16, for a total amount of €32.1 million.
The new ordinary shares will be included in Cofinimmo's results from 01.01.2012 (first dividend payable in May 2013) 2 .
1 Per band of €100 for the bond with ISIN code XS0193197505, €1,000 for the bond with ISIN code BE0002171370, €50,000 for the bond with ISIN code BE6202995393, €116.60 for the bond with ISIN code BE0002176429.
2 See also our press releases dated 02.05.2012 and 29.05.2012, available on our website.
c. 2012 dividends
Barring the occurrence of unforeseen events, the 2012 dividend forecast published in the 2011 Annual Financial Report is maintained and amounts to €6.50 gross (€5.135 net) per ordinary share and €6.37 gross (€5.0323 net) per preference share. Dividends are subject to 21% withholding tax1 .
d. Conversion of preference shares
In accordance with Article 8.2. of the company's articles of association, two new windows to convert Cofinimmo preference shares into Cofinimmo ordinary shares were opened during the first six months of the year. During this period, applications to convert 241,189 preference shares were received. Accordingly, since the opening of the conversion procedure (01.05.2009), 673,146 preference shares have been converted into ordinary shares. 826,620 preference shares are therefore still outstanding.
e. Shareholders
| Company | Ordinary shares | Preference shares | Total number of | % |
|---|---|---|---|---|
| shares | ||||
| (voting rights) | ||||
| Cofinimmo Group | 975,188 | 975,188 | 5.85% | |
| Total number of issued shares |
15,852,620 | 826,620 | 16,679,240 | 100.0% |
f. Shareholders' calendar
| Event | Date |
|---|---|
| Interim announcement: results at 30.09.2012 | 12.11.2012 |
| Annual press release: results at 31.12.12 | 08.02.2013 |
| Publication of the 2012 Annual Report | 26.03.2013 |
| 2012 Annual General Meeting | 26.04.20132 |
| Interim announcement: results at 31.03.13 | 02.05.2013 |
| Half-yearly Financial Report: results at 30.06.13 | 31.07.2013 |
| Interim announcement: results at 30.09.13 | 12.11.2013 |
1 For individual registered shareholders residing in Belgium who receive more than €20,020 in dividends and/or interests per year, the Law of 28.12.2011 imposes a solidarity contribution of 4% on dividends paid by the issuer.
2 The change with respect to the Ordinary General Meeting date to the second Wednesday of the month of May at 15.30, as from the Ordinary General Meeting to be held in 2013 will be put in the agenda of the Extraordinary General Meeting of 09.10.2012.
1.10. Events after 30.06.2012
a. Extension of the lease for the North Galaxy building
On 19.07.2012, Cofinimmo and the Buildings Agency (Belgian Federal State) signed a nine year lease extension with respect to the North Galaxy building. The maturity of the lease is therefore extended to 30.11.2031, instead of 30.11.2022 initially.
This transaction allows to significantly increase the average residual lease length in the office segment: on 30.06.2012, the average residual lease length would have stood at 8.4 years if the lease extension had already been signed, i.e. 2.4 years more in comparison with the current situation on 30.06.2012. The average residual lease length of Cofinimmo's global portfolio would have stood at 12.6 years, instead of the actual 11.5 years, i.e. an improvement of 1.1 year.
Several incentives have been granted to the Buildings Agency with respect to this transaction. These incentives have been fully taken into account in the 2012 forecasts published in the 2011 Annual Financial Report.
As a reminder, with its 105,000m² of office space, this building is located in the Brussels' North Area (CBD), in the immediate proximity of the North Station, and is occupied by the Federal Public Service of the Ministry of Finance.
b. Successful issuance of a €100 million private placement
On 26.07.2012, Cofinimmo successfully issued a 7.5 years bond maturing 07.02.2020 for a total amount of €100 million. The bond will offer a fixed coupon of 3.59% payable annually on February 7 th , with a first short coupon. The bond was placed with a limited number of institutional investors. The transaction is scheduled to close on 07.08.2012.
The net proceeds of this bond issue allow Cofinimmo to cover its refinancing needs until the end of 2013 and to further diversify its financial resources. This transaction lengthens the average debt maturity to four years.
c. Disposal of a pub located in Flanders
On 19.07.2012, the Cofinimmo Group, via its subsidiary Pubstone SA, sold a pub located in Flanders 1 , for a total gross amount which is 37.3% above the value assigned to them by the independent real estate expert at 31.12.2011.
1 Dorpstraat 48 in Serskamp (Wichelen).
1.11. Risk management
Below is an overview of the most significant risks to which Cofinimmo is exposed in its activities. Reference is made to pages 2 to 5 of the 2011 Annual Financial Report for a detailed account of the company's risk management strategy.
Risks associated with the economic climate
The activities of Cofinimmo are partially linked to the general economic climate. A decline in economic growth indirectly influences the occupancy rate of offices in the private sector as well as rents. It can also increase the risk of default by tenants. The impact on Cofinimmo's bottom line is, however, mitigated by the duration of its lease agreements (as at 30.06.12, the average period until the first break option is 11.5 years), the diversification of its tenant portfolio (362 clients), and the fact that over 37% of its office tenants are from the public sector. Thanks to its diversification into less volatile sectors such as nursing homes and clinics and sale and leaseback operations with AB InBev and MAAF, Cofinimmo's portfolio is less exposed to the risks posed by the general economic climate.
Risk of vacancy
For about four years, the vacancy rate on the Brussels office market has been increasing. As at 30.06.12, the vacancy rate in Brussels was 11.5% (source: DTZ Research). For Cofinimmo's Brussels office portfolio, the vacancy rate is 8.85% as at 30.06.12. Cofinimmo actively manages its client base in order to minimise vacancies and tenant turnover in the office segment. An internal property management team is responsible for swiftly resolving tenant complaints. The commercial team maintains regular contacts with existing tenants and actively seeks new ones.
The nursing homes/clinics are let on a long-term basis, with an initial lease term of 27 years in Belgium and 12 years in France. As at 30.06.12, the average remaining lease term was 23.0 years in Belgium and 7.8 years in France.
As at 30.06.12, the entire pub portfolio is let to AB InBev with a minimum average residual term of 18.3 years. Furthermore, all the insurance services agencies are leased to MAAF for an average residual term of 9.2 years.
Risk of tenant insolvency
Cofinimmo is exposed to the risk of default by its tenants. As at 30.06.12, the five most important clients accounted for 48.7% of its rental income. The two most important office tenants (18.7%) are from the public sector.
An advance deposit or bank guarantee corresponding to six months' rent is generally requested from private sector tenants.
Risks associated with investment and development
Cofinimmo engages in limited development activity for its own account, the maximum being set at 10% of the fair value of its portfolio.
When considering investments, Cofinimmo makes certain estimates as to economic, market and other conditions, including estimates relating to the value or potential value of a property and the potential return on investment. These estimates may prove to be incorrect, rendering Cofinimmo's investment strategy inappropriate with consequent negative effects for Cofinimmo's business, operational results, financial conditions and prospects.
Before acquiring a building, Cofinimmo performs an internal assessment in order to determine a price for the building with a view to long-term management. Moreover, an independent expert assesses each acquisition or sale of property.
Risks associated with deterioration and large-scale works
Cofinimmo maintains and regularly renovates its properties in order to ensure that they remain attractive to tenants. The current trend towards sustainable, energy-efficient buildings, both in terms of construction and use, may require additional investments.
Risks associated with fluctuations in the fair value of real estate
The properties are valued quarterly by independent property experts. A fluctuation of 1% in the value of the portfolio can have an impact of around €32.6 million on the company's net result and of €2.07 on the net asset value per share. It can also have an impact of approximately 0.5% on the debt ratio.
Liquidity and financing risks
A diversification of financing sources, a stable and varied banking pool with good financial ratings (Cofinimmo has 10 banking partners) and staggered loan maturity dates favour appropriate financial conditions.
Cofinimmo's borrowing capacity is limited by the maximum debt ratio authorised by regulations on Sicafis/Bevaks and by the Loan-to-Value ratio agreed with the banks in the loan documents. As at 30.06.12, the Sicafi/Bevak consolidated debt ratio stands at 51.03%, significantly below the maximum of 65%. As at 30.06.12, the consolidated Loan-to-Value ratio is 53.09%. This ratio cannot exceed 60%. However, if a first threshold of 57.50% is passed, it has been agreed with the banks that the ratio must drop below this percentage within the next six months.
Cofinimmo has a medium-term financial plan which is completely revised in the spring of each year and updated during the year following every significant property acquisition or sale. The purpose of this type of plan is notably to position the consolidated debt ratio of Cofinimmo at an appropriate level, based on an assessment by the Board of Directors of the risks inherent in the company's portfolios of assets and leases1 .
Interest rate risks
Cofinimmo almost always borrows at a variable (floating) interest rate. Derivatives are used to hedge financing costs against rate increases and to ensure that interest rates remain within a certain margin, between a maximum and minimum rate. These instruments include specifically Interest Rate Swaps and CAP options, partially financed by FLOOR options.
By using existing hedging mechanisms and assuming a constant level of debt, a 0.5% rise or fall in the interest rate should not significantly affect financing expenses of the current year.
The interest-rate derivatives are marked to market at the end of each quarter. Future rate fluctuations thus impact the net asset value and the profit for the period.
1 See Article 54 of the Royal Decree of 07.12.2010.
1.12. Corporate Governance
Cofinimmo seeks to maintain high standards of corporate governance and continuously assesses its governance principles, practices and requirements. The practice of corporate governance by Cofinimmo is entirely in line with the Belgian Corporate Governance Code1 .
A detailed description of the various Committees, their respective roles and members appears in the chapter entitled "Corporate Governance Statement" of the 2011 Annual Financial Report.
The composition of the Board of Directors is given on page 60 of this Report. The General Meeting on 27.04.2012 renewed the Directorships of Mr. Jean-Edouard Carbonnelle, Mr. Gaëtan Hannecart, Mr. Baudouin Velge, Mr. Xavier de Walque and Mr. Vincent Doumier, with immediate effect and until the end of the Ordinary General Meeting to be held in 20162 .
Following the resignation of Mr. Serge Fautré, the company's Director and CEO since 2002, the Cofinimmo Board of Directors appointed, Mr. Jean Edouard Carbonnelle, Director and CFO, as CEO and Chairman of the Executive Committee, and, subject to FSMA approval, Mr. Marc Hellemans, Head of Corporate Finance and International Development, as CFO and Member of the Executive Committee3 .
2. Summary of the Financial Statements
The accounting principles and methods used to draw up these interim financial statements are identical to those used to prepare the annual financial statements for FY 2011. These interim financial statements have been prepared using accounting methods that comply with IFRS and in particular IAS 34 on "Interim Financial Reporting".
1 See our Corporate Governance Charter available on our website.
2 See our press release dated 27.04.2012, available on our website.
3 See our press releases dated 22.03.2012, 30.03.12 and 08.06.2012, available on our website.
2.1. Comprehensive income statement – in accordance with the Royal Decree of 07.12.2010 (x €1,000)
| Notes | nd quarter 2 |
nd quarter 2 |
Year to date | Year to date | |
|---|---|---|---|---|---|
| 2012 | 2011 | on 30.06.12 | on 30.06.11 | ||
| A. NET RESULT | |||||
| Rental income | 5 | 48,956 | 48,593 | 106,979 | 94,863 |
| Writeback of lease payments sold and | 5 | 5,749 | 5,234 | 11,497 | 10,468 |
| discounted | |||||
| Rental-related expenses | -1,405 | 168 | -1,413 | 166 | |
| Net rental income | 4, 5 | 53,300 | 53,995 | 117,063 | 105,497 |
| Recovery of property charges | 458 | -42 | 682 | 78 | |
| Recovery income of charges and taxes | |||||
| normally payable by the tenant on let | 13,576 | 8,107 | 22,966 | 20,525 | |
| properties | |||||
| Costs payable by the tenant and borne | -596 | -480 | -1,970 | -785 | |
| by the landlord on rental damage and | |||||
| redecoration at end of lease | |||||
| Charges and taxes normally payable by | |||||
| the tenant on let properties | -14,235 | -8,274 | -24,049 | -20,008 | |
| Property result | 52,503 | 53,306 | 114,692 | 105,307 | |
| Technical costs | -1,322 | -1,022 | -3,307 | -1,715 | |
| Commercial costs | -126 | -549 | -464 | -751 | |
| Taxes and charges on unlet properties | -1,164 | -1,001 | -2,010 | -2,147 | |
| Property management costs | -4,000 | -3,323 | -7,846 | -7,022 | |
| Property charges | -6,612 | -5,895 | -13,627 | -11,635 | |
| Property operating result | 45,891 | 47,411 | 101,065 | 93,672 | |
| Corporate management costs | -1,801 | -1,806 | -3,794 | -3,682 | |
| Operating result before result on the portfolio |
44,090 | 45,605 | 97,271 | 89,990 | |
| Gains or losses on disposals of | 95 | 446 | 95 | 4,946 | |
| investment properties | |||||
| Changes in fair value of investment | 7,421 | -7,722 | 8,062 | -15,915 | |
| properties | |||||
| Other result on the portfolio | -474 | -4,348 | -1,771 | -4,385 | |
| Operating result | 51,132 | 33,981 | 103,657 | 74,636 | |
| Financial income | 6 | 1,322 | 1,513 | 2,748 | 2,772 |
| Net interest charges | 7 | -15,366 | -16,330 | -30,689 | -30,368 |
| Other financial charges | 8 | -137 | -93 | -235 | -192 |
| Changes in fair value of financial assets | 9 | 560 | 105 | -290 | -945 |
| and liabilities | |||||
| Financial result | -13,621 | -14,805 | -28,466 | -28,733 | |
| Share in the result of associated | -381 | -381 | |||
| companies and joint ventures |
| Pre-tax result | 37,130 | 19,176 | 74,810 | 45,903 |
|---|---|---|---|---|
| Corporate tax | -1,265 | -2,930 | -1,981 | -4,714 |
| Exit tax | -244 | -47,651 | -509 | -47,743 |
| Others1 | 87,344 | 87,344 | ||
| Taxes | -1,509 | 36,763 | -2,490 | 34,887 |
| Net result | 35,621 | 55,939 | 72,320 | 80,790 |
| Minority interests | -1,316 | -4,184 | -2,761 | -4,729 |
| Net result – Group share | 34,305 | 51,755 | 69,559 | 76,061 |
| Net current result – Group share | 28,107 | 27,977 | 64,705 | 56,113 |
| Result on the portfolio – Group share | 6,198 | 23,778 | 4,854 | 19,948 |
| B. OTHER ELEMENTS OF THE GLOBAL RESULT |
||||
|---|---|---|---|---|
| Impact on fair value of estimated transaction costs resulting from hypothetical disposal of investment properties |
-527 | -4,725 | -1,337 | -4,813 |
| Change in the effective part of the fair value of authorised cash flow hedging instruments as defined under IFRS |
-20,663 | -11,581 | -34,763 | 21,832 |
| Other elements of the global result | -21,190 | -16,306 | -36,100 | 17,019 |
| Minority interests | 55 | 65 | 160 | 64 |
| Other elements of the global result – Group share |
-21,135 | -16,241 | -35,940 | 17,083 |
| C. GLOBAL RESULT | 14,431 | 39,632 | 36,221 | 97,810 |
| Minority interests | -1,261 | -4,119 | -2,602 | -4,665 |
| Global result – Group share | 13,170 | 35,513 | 33,619 | 93,145 |
| Result per share – Group share (in €) | 30.06.2012 | 30.06.2011 |
|---|---|---|
| Net current result per share – Group share | 4.12 | 3.69 |
| Result on portfolio per share – Group share | 0.31 | 1.32 |
| Net result per share – Group share | 4.43 | 5.01 |
| 2 Diluted result per share – Group share (in €) |
30.06.2012 | 30.06.2011 |
|---|---|---|
| Diluted number of shares | 17,733,289 | 15,715,726 |
| Diluted net result per share – Group share | 4.55 | 4.86 |
1 This item comprises the reversal of deferred taxes.
2 Following the theoretical conversion of convertible bonds.
2.2. Consolidated income statement – analytical format (x €1,000)
| 30.06.2012 | 30.06.2011 | |
|---|---|---|
| A. NET CURRENT RESULT | ||
| Rental income, net of rental-related expenses | 105,566 | 95,029 |
| Writeback of lease payments sold and discounted (non-cash) | 11,497 | 10,468 |
| Taxes and charges on rented properties not recovered | -1,083 | 517 |
| Redecoration costs, net of tenant compensation for damages | -1,288 | -707 |
| Property result | 114,692 | 105,307 |
| Technical costs | -3,307 | -1,715 |
| Commercial costs | -464 | -751 |
| Taxes and charges on unlet properties | -2,010 | -2,147 |
| Property result after direct property costs | 108,911 | 100,694 |
| Property management costs | -7,846 | -7,022 |
| Property operating result | 101,065 | 93,672 |
| Corporate management costs | -3,794 | -3,682 |
| Operating result (before result on portfolio) | 97,271 | 89,990 |
| Financial income (IAS 39 excluded)1 | 2,748 | 2,772 |
| Financial charges (IAS 39 excluded)2 | -30,924 | -30,560 |
| Revaluation of derivative financial instruments (IAS 39) | -290 | -945 |
| Share in the result of associated companies and joint ventures | -311 | |
| Taxes | -1,981 | -4,714 |
| Net current result3 | 66,513 | 56,543 |
| Minority interests | -1,808 | -430 |
| Net current result – Group share | 64,705 | 56,113 |
| B. RESULT ON PORTFOLIO | ||
| Gains or losses on disposals of investment properties | 95 | 4,946 |
| Changes in fair value of investment properties | 8,062 | -15,915 |
| Share in the result of associated companies and joint ventures | -70 | |
| Other result on the portfolio4 | -2,280 | 35,216 |
| Result on the portfolio | 5,807 | 24,247 |
| Minority interests | -953 | -4,299 |
| Result on the portfolio – Group share | 4,854 | 19,948 |
| C. NET RESULT | ||
| Net result – Group share | 69,559 | 76,061 |
| NUMBER OF SHARES | 30.06.2012 | 30.06.2011 |
|---|---|---|
| Number of ordinary shares issued (including treasury shares) | 15,852,620 | 13,998,047 |
| Number of preference shares issued and not converted | 826,620 | 1,248,601 |
| Number of ordinary shares entitled to share in the result of the period | 14,877,432 | 13,945,440 |
| Number of preference shares entitled to share in the result of the period | 826,620 | 1,248,601 |
| Total number of shares entitled to share in the result of the period | 15,704,052 | 15,194,041 |
1 Including IAS 39, as at 30.06.2012 and 30.06.2011, financial income totalled k€13,603 and k€10,943 respectively.
2 Including IAS 39, as at 30.06.2012 and 30.06.2011, financial charges totalled k€-42,068 and k€-39,676 respectively.
3 Net income excluding the income from the sale of investment buildings, the variations in the fair value of investment buildings, the exit tax and, in 2011, the recovery of deferred taxes.
4 Including, in 2011, the recovery of deferred taxes.
Comments on the consolidated income statement – analytical format
Rental income for the first half of 2012 amounts to €105.6 million, compared to €95.0 million for the first half of 2011, i.e. an increase of 11.2%. This increase is due to a non recurrent indemnity paid by Belfius Bank in compensation for the termination of its lease of the Livingstone building. This exceptional indemnity of €11.2 million was paid during the first quarter of 2012 and was entirely included in the first quarter's income statement. If the indemnity paid by Belfius Bank is split over the entire financial year 2012, which is €2.8 million per quarter, rental income on 30.06.2012 comes to €100.0 million, which is an increase of 5.3% compared to 30.06.2011.
On the basis of an unchanged portfolio (like-for-like), the level of rent rose by 0.29% over the last 12 months. As of 30.06.2012, the occupancy rate is 95.59% for the entire portfolio and 91.52% for the office portfolio alone.
Direct and indirect operating costs amount to €-17.4 million on 30.06.2012, compared to €-15.3 million on 30.06.2011.These costs represent 0.92% of the average value of the assets under management (versus 0.83% for the full year 2011).
The operating result (before result on portfolio) is €97.3 million, compared to €90.0 million for the first half of 2011.
The financial result comes at €-28.5 million in the first half of 2012, compared to €-28.7 million for the first half of 2011. The average interest rate1 , including bank margins and the amortisation costs of hedging instruments for the period, stands at 4.01% at 30.06.2012, compared to 4.31% at 30.06.2011. The average debt, meanwhile, rose from €1,524.4 million to €1,676.0 million over the same period.
The revaluation of optional hedging instruments resulted in a net latent loss of €-0.3 million2 for the first half of 2012, compared to a net latent loss of €-0.9 million for the first half of 2011. The balance sheet item under shareholders' equity entitled "Reserve for the balance of changes in fair value of financial instruments" 3 , where fluctuations in the effective value of financial instruments, both optional and nonoptional, are recorded, comes from €-117.7 million on 31.12.2011 to €-143.0 million on 30.06.2012. The variation of the period does not appear on the income statement but unfavourably affects shareholders' equity and the net asset value of the shares. The amount will be progressively reversed over future years.
Taxes (€-2.0 million) include the tax on non-deductible costs of a Sicafi/Bevak (primarily the office tax in the Brussels Capital Region) and corporate income tax due by subsidiaries which do not benefit from the Sicafi/Bevak tax regime. The fall of over 50% recorded under this item over the year can be explained by Pubstone SA's conversion into an institutional Sicafi/Bevak.
1 The average interest rate is calculated by dividing on an annual basis the interest charges with respect to the financial debt (€30.7 million) plus the amortisation costs of hedging instruments (€2.9 million) by the average debt over the period (€1,676.0 million).
2 This amount also includes €8.5 million, representing the positive change in the fair value of the debt made up of the convertible bonds issued by the company in April 2011. This debt is booked at market value on 30.06.2012, namely €170.0 million.
3 This entry appears under the "Reserves" heading on the balance sheet.
The net current result (Group share) for the first half of 2012 amounts to €64.7 million, versus €56.1 million for the first half of 2011 (+15.3%). Per share, it represents €4.12 versus €3.69 for the first half of 2011 (+11.7%). The number of shares participating in earnings rose by 3.4% between 30.06.2011 and 30.06.2012.
The result on portfolio comprises four elements: the realised gains/losses from property sales, the unrealised gains/losses from revaluation of the portfolio, the share in the result of associated companies and joint ventures and the elements contained under "Other result on portfolio".
- The change in fair value of the portfolio increased positively. Where an unrealised loss of €-15.9 million was recorded at 30.06.2011, the results at 30.06.2012 show an unrealised gain of €+8.1 million. This increase is due to the indexation of the nursing homes/clinics leases and an increase in the valuation of the Pubstone portfolio in Belgium and of the MAAF insurance branches in France.
- The result realised on disposals of properties stands at €+0.1 million at 30.06.2012, while it was €+4.9 million at 30.06.2011.
- The share in the result of associated companies and joint ventures, namely Cofinéa I, comes at €-0.1 million.
- The content under the heading "Other result on portfolio" fell from €+35.2 million to €-2.3 million between 30.06.2011 and 30.06.2012. This variation can be explained by the €39.3 million recovered deferred taxes following the conversion of Pubstone SA into an institutional Sicafi/Bevak in the first half of 2011.
The total result on portfolio decreased from €+19.9 million at 30.06.2011 to €+4.9 million at 30.06.2012.
The net result (Group share) for the first half of 2012 indicates a profit of €69.6 million, compared to €76.1 million for the first half of 2011. Per share, this result amounts to €4.43, compared with €5.01 a year earlier.
| 2.3. Consolidated balance sheet (x €1,000) | ||
|---|---|---|
| Notes | 30.06.2012 | 31.12.2011 | |
|---|---|---|---|
| Non-current assets | 3,500,076 | 3,414,890 | |
| Goodwill | 4 | 157,456 | 157,456 |
| Intangible assets | 732 | 745 | |
| Investment properties | 4,10 | 3,244,508 | 3,177,560 |
| Other tangible assets | 952 | 966 | |
| Non-current financial assets | 36,665 | 21,880 | |
| Finance lease receivables | 54,211 | 55,403 | |
| Trade receivables and other non-current assets | 99 | 43 | |
| Participations in associated companies and joint ventures | 5,453 | 838 | |
| Current assets | 122,087 | 114,051 | |
| Assets held for sale | 4 | 12,855 | 12,025 |
| Current financial assets | 12,875 | 13,779 | |
| Finance lease receivables | 3,145 | 2,868 | |
| Trade receivables | 24,320 | 20,840 | |
| Tax receivables and other current assets | 18,866 | 17,015 | |
| Cash and cash equivalents | 1,477 | 10,207 | |
| Accrued charges and deferred income | 48,549 | 37,317 | |
| TOTAL ASSETS | 3,622,163 | 3,528,941 | |
| Shareholders' equity | 1,497,975 | 1,515,544 | |
| Shareholders' equity attributable to shareholders of parent company | 1,438,198 | 1,460,887 | |
| Capital | 11 | 841,557 | 814,228 |
| Share premium account | 11 | 325,214 | 312,330 |
| Reserves | 201,868 | 215,790 | |
| Net result of the financial year | 12 | 69,559 | 118,539 |
| Minority interests | 59,777 | 54,657 | |
| Liabilities | 2,124,188 | 2,013,397 | |
| Non-current liabilities | 1,618,036 | 1,601,387 | |
| Provisions | 18,108 | 18,474 | |
| Non-current financial debts | 1,465,557 | 1,435,094 | |
| Other non-current financial liabilities | 98,231 | 106,735 | |
| Deferred taxes | 36,140 | 41,083 | |
| Current liabilities | 506,152 | 412,011 | |
| Current financial debts | 303,344 | 246,316 | |
| Other current financial liabilities | 88,051 | 58,930 | |
| Trade debts and other current debts | 79,652 | 79,225 | |
| Accrued charges and deferred income | 35,105 | 27,540 |
Comments on the consolidated balance sheet
The fair value of the property portfolio1 , as appears from the consolidated balance sheet, by application of IAS 40, is obtained by deducting transaction costs from the investment value. At 30.06.2012, the fair value stands at €3,257.4 million, compared to €3,189.4 million at 31.12.2011.
The investment value of the property portfolio1 , as established by the independent real estate experts, is €3,382.7million at 30.06.2012, compared with €3,311.3 million at 31.12.2011.
1 Including own-use buildings and development projects.
The "Participations in associated companies and joint ventures" header regards Cofinimmo's 51% stakes in Cofinéa I SAS.
The "Minority interests" section includes the bonds repayable in shares issued by the subsidiary Cofinimur I, as well as the minority interests of subsidiaries Silverstone and Pubstone.
2.4. Calculation of debt ratio (x €1,000)
The debt ratio (debts to total assets) at 30.06.12 comes to 51.03%. It should be recalled that the statutory maximum debt ratio for Sicafis/Bevaks is 65%.
| 30.06.2012 | 31.12.2011 | ||
|---|---|---|---|
| Non-current financial debts | 1,465,557 | 1,435,094 | |
| Other non-current financial liabilities (except for hedging instruments) | + | ||
| Current financial debts | + | 303,344 | 246,316 |
| Other current financial liabilities (except for hedging instruments) | + | ||
| Trade debts and other current debts | + | 79,652 | 79,225 |
| Total debt | = | 1,848,553 | 1,760,635 |
| Total assets | / | 3,622,163 | 3,528,941 |
| DEBT RATIO | = | 51.03% | 49.89% |
2.5. Consolidated cash flow statement (x €1,000)
| 30.06.2012 | 30.06.2011 | |
|---|---|---|
| CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD | 10,207 | 3,265 |
| Operating activities | ||
| Net result for the period | 69,559 | 76,061 |
| Adjustments for interest charges and income | 28,838 | 27,649 |
| Adjustments for gains and losses on disposal of property assets | -95 | -4,946 |
| Adjustments for non-cash charges and income | -16,759 | -26,522 |
| Changes in working capital requirement | -9,354 | 2,816 |
| CASH FLOW FROM OPERATING ACTIVITIES | 72,189 | 75,058 |
| Investment activities | ||
|---|---|---|
| Investments in intangible assets and other tangible assets | -353 | -522 |
| Acquisitions of investment properties | -16,903 | -44,585 |
| Extensions of investment properties | -10,557 | -12,409 |
| Investments in investment properties | -4,379 | -16,656 |
| Acquisitions of consolidated subsidiaries | -18,772 | -20,238 |
| Disposals of investment properties | 1,585 | 41,095 |
| Payment of exit tax | -1,230 | |
| Disposal and reimbursement of finance lease receivables | 1,456 | 1,452 |
| Other cash flows from investment activities | -13,446 | |
| NET CASH FROM INVESTING ACTIVITIES | -62,599 | -55,863 |
| Financing activities | ||
|---|---|---|
| Disposal of own shares | 11,132 | |
| Dividends paid to shareholders | -68,679 | -64,406 |
| Increase in financial debts | 130,414 | 230,364 |
| Decrease in financial debts | -51,459 | -144,363 |
| Financial income received | 2,394 | 15,511 |
| Financial charges paid | -30,411 | -39,138 |
| Other cash flows from financing activities | -11,711 | -17,941 |
| CASH FLOW RESULTING FROM FINANCING ACTIVITIES | -18,320 | -19,973 |
| CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 1,477 | 2,487 |
2.6. Consolidated statement of changes in shareholders' equity (x €1,000)
| Capital | Share premium account |
Reserves1 | Net result of the year |
Shareholders ' equity Parent company |
Minority interests |
Sharehold ers' equity |
|
|---|---|---|---|---|---|---|---|
| AT 01.01.11 | 796,528 | 513,093 | 66,364 | 83,796 | 1,459,781 | 7,097 | 1,466,878 |
| Appropriation of the 2010 result | 83,796 | -83,796 | |||||
| Elements directly recognised in shareholders' equity | 17,460 | 76,061 | 93,521 | 4,729 | 98,250 | ||
| Cash flow hedge | 21,832 | 21,832 | 21,832 | ||||
| Impact on fair value of estimated transaction costs resulting from hypothetical disposal of investment properties |
-4,372 | -4,372 | -4,372 | ||||
| Result of the period | 76,061 | 76,061 | 4,729 | 80,790 | |||
| Minority interests | 802 | 802 | |||||
| Others | -214,086 | 213,237 | -849 | -925 | -1,774 | ||
| SUB-TOTAL | 796,528 | 299,007 | 380,857 | 76,061 | 1,552,453 | 11,703 | 1,564,156 |
| Issue of new shares | 17,698 | 13,321 | 31,018 | 31,018 | |||
| Acquisitions/Disposals of own shares | |||||||
| Dividends | -96,452 | -96,452 | -96,452 | ||||
| AT 30.06.2011 | 814,225 | 312,328 | 284,405 | 76,061 | 1,487,019 | 11,703 | 1,498,722 |
| Elements directly recognised in shareholders' equity | -68,952 | 42,478 | -26,474 | -270 | -26,744 | ||
| Cash flow hedge | -71,080 | -71,080 | -71,080 | ||||
| Impact on fair value of estimated transaction costs resulting from hypothetical disposal of investment properties |
2,128 | 2,128 | -87 | 2,041 | |||
| Result of the period | 42,478 | 42,478 | -183 | 42,295 | |||
| Minority interests | 42,299 | 42,299 | |||||
| Others | 337 | 337 | 925 | 1,262 | |||
| SUB-TOTAL | 814,225 | 312,328 | 215,790 | 118,539 | 1,460,882 | 54,657 | 1,515,539 |
| Issue of new shares | |||||||
| Conversation of convertible bonds | 3 | 2 | 5 | 5 | |||
| Acquisitions/Disposals of own shares | |||||||
| AT 31.12.11 | 814,228 | 312,330 | 215,790 | 118,539 | 1,460,887 | 54,657 | 1,515,544 |
1 Details regarding the reserves are featured on the following pages.
| Capital | Share | Reserves1 | Net result | Shareholders | Minority | Sharehold | |
|---|---|---|---|---|---|---|---|
| premium | of the | ' equity | interests | ers' equity | |||
| account | financial | Parent | |||||
| year | company | ||||||
| AT 31.12.11 | 814,228 | 312,330 | 215,790 | 118,539 | 1,460,887 | 54,657 | 1,515,544 |
| Appropriation of the 2011 net result | 118,539 | -118,539 | |||||
| Elements directly recognised in shareholders' equity | -35,940 | 68,894 | 32,954 | 2,601 | 35,555 | ||
| Cash flow hedge | -34,763 | -34,763 | -34,763 | ||||
| Impact on fair value of estimated transaction costs resulting from hypothetical | |||||||
| disposal of investment properties | -1,177 | -1,177 | -160 | -1,337 | |||
| Result of the period | 68,894 | 68,894 | 2,761 | 71,655 | |||
| Minority interests | 2,519 | 2,519 | |||||
| Others | -125 | 665 | 540 | 540 | |||
| SUB-TOTAL | 814,228 | 312,330 | 298,264 | 69,559 | 1,494,381 | 59,777 | 1,554,158 |
| Issue of new shares | 20,941 | 11,165 | 32,106 | 32,106 | |||
| Acquisitions/Disposals of own shares | 6,388 | 1,719 | 3,024 | 11,131 | 11,131 | ||
| Dividends | -99,420 | -99,420 | -99,420 | ||||
| AT 30.06.12 | 841,557 | 325,214 | 201,868 | 69,559 | 1,438,198 | 59,777 | 1,497,975 |
1 The following pages contain details regarding reserves.
Detail of the reserves
| Reserve for | Reserve for | Reserve for | Reserve for | Distributable | Non | Tax-exempt | Legal | TOTAL | |
|---|---|---|---|---|---|---|---|---|---|
| the positive/ | estimated | the balance | the balance | reserves | distributable | reserves | reserve | RESERVES | |
| negative | transaction | of changes in | of changes in | reserves | |||||
| balance of | costs | fair value of | fair value of | ||||||
| changes in | resulting | authorised | authorised | ||||||
| fair value of | from | hedging | hedging | ||||||
| investment | hypothetical | instruments | instruments | ||||||
| properties | disposal of | qualifying for | not qualifying | ||||||
| investment | hedge | for hedge | |||||||
| properties | accounting as | accounting as | |||||||
| defined by | defined by | ||||||||
| IFRS | IFRS | ||||||||
| AT 01.01.11 | -28,617 | -64,128 | -60,061 | 222,437 | 1,557 | -4,859 | 35 | 66,364 | |
| Appropriation of the 2010 result | -143,414 | -904 | -7,070 | -1,312 | 235,905 | 591 | 83,796 | ||
| Elements directly recognised in shareholders' equity | -4,372 | 21,832 | 17,460 | ||||||
| Cash flow hedge | 21,832 | 21,832 | |||||||
| Impact on fair value of estimated transaction costs resulting from | |||||||||
| hypothetical disposal of investment properties | -4,372 | -4,372 | |||||||
| Result of the period | |||||||||
| Minority interests | |||||||||
| Others | -26 | 208,631 | -206 | 4,838 | 213,237 | ||||
| SUB-TOTAL | -172,057 | -69,404 | -45,299 | -1,312 | 666,973 | 1,942 | -21 | 35 | 380,857 |
| Issue of new shares | |||||||||
| Acquisitions/Disposals of own shares | |||||||||
| Dividends | -96,452 | -96,452 |
| Reserve for | Reserve for |
Reserve for | Reserve for | Distributable | Non | Tax-exempt | Legal | TOTAL | |
|---|---|---|---|---|---|---|---|---|---|
| the positive/ | estimated | the balance | the balance | reserves | distributable | reserves | reserve | RESERVES | |
| negative | transaction | of changes in | of changes in | reserves | |||||
| balance of | costs | fair value of | fair value of | ||||||
| changes in | resulting | authorised | authorised | ||||||
| fair value of | from | hedging | hedging | ||||||
| investment | hypothetical | instruments | instruments | ||||||
| properties | disposal of | qualifying for | not qualifying | ||||||
| investment | hedge | for hedge | |||||||
| properties | accounting as | accounting as | |||||||
| defined by | defined by | ||||||||
| IFRS | IFRS | ||||||||
| AT 30.06.2011 | -172,057 | -69,404 | -45,299 | -1,312 | 570,521 | 1,942 | -21 | 35 | 284,405 |
| Elements directly recognised in shareholders' equity | 2,128 | -71,080 | -68,952 | ||||||
| Cash flow hedge | -71,080 | -71,080 | |||||||
| Impact on fair value of estimated transaction costs resulting from | |||||||||
| hypothetical disposal of investment properties | 2,128 | 2,128 | |||||||
| Result of the period | |||||||||
| Minority interests | |||||||||
| Others | -321 | 468 | 169 | 21 | 337 | ||||
| SUB-TOTAL | -172,378 | -67,276 | -116,379 | -1,312 | 570,989 | 2,111 | 35 | 215,790 | |
| Issue of new shares | |||||||||
| Acquisitions/Disposals of own shares | |||||||||
| AT 31.12.2011 | -172,378 | -67,276 | -116,379 | -1,312 | 570,989 | 2,111 | 35 | 215,790 |
| Reserve for | Reserve for | Reserve for | Reserve for | Distributable | Non | Tax-exempt | Legal | TOTAL | |
|---|---|---|---|---|---|---|---|---|---|
| the positive/ | estimated | the balance | the balance | reserves | distributable | reserves | reserve | RESERVES | |
| negative | transaction | of changes in | of changes in | reserves | |||||
| balance of | costs | fair value of | fair value of | ||||||
| changes in | resulting | authorised | authorised | ||||||
| fair value of | from | hedging | hedging | ||||||
| investment | hypothetical | instruments | instruments | ||||||
| properties | disposal of | qualifying for | not qualifying | ||||||
| investment | hedge | for hedge | |||||||
| properties | accounting as | accounting as | |||||||
| defined by | defined by | ||||||||
| IFRS | IFRS | ||||||||
| AT 01.01.2012 | -172,378 | -67,276 | -116,379 | -1,312 | 570,989 | 2,111 | 35 | 215,790 | |
| Appropriation of the 2011 result |
22,576 | -1,466 | 9,641 | -167 | 87,677 | 278 | 118,539 | ||
| Elements directly recognised in shareholders' equity | -1,177 | -34,763 | -35,940 | ||||||
| Cash flow hedge | -34,763 | -34,763 | |||||||
| Impact on fair value of estimated transaction costs resulting from | |||||||||
| hypothetical disposal of investment properties |
-1,177 | -1,177 | |||||||
| Others | -233 | -71 | -1,609 | 161 | 1,627 | -125 | |||
| SUB-TOTAL | -150,035 | -69,990 | -141,501 | -1,479 | 657,057 | 2,550 | 1,662 | 298,264 | |
| Issue of new shares | |||||||||
| Acquisitions/Disposals of own shares | 3,024 | 3,024 | |||||||
| Dividends | -99,420 | -99,420 | |||||||
| AT 30.06.2012 | -150,035 | -69,990 | -141,501 | -1,479 | 560,661 | 2,550 | 1,662 | 201,868 |
2.7. Notes on the consolidated accounts
Note 1. General information
Cofinimmo SA/NV (the "Company") is a public Sicafi/Bevak (Belgian REIT) organised under Belgian law with its registered office at Boulevard de la Woluwe 58, 1200 Brussels.
The half year consolidated financial statements of Cofinimmo SA for the period which ended on 30.06.12 cover the Company and its subsidiaries (collectively referred to as "the Group"). The scope of consolidation has been altered since 31.12.2011 (see Note 13).
The half year consolidated financial statements were drawn up by the Board of Directors on 30.07.2012. The audit firm of Deloitte, represented by Mr. Frank Verhaegen, concluded its limited audit and confirmed that the accounting information contained in this half year report does not call for any reservations and corresponds with the financial statements adopted by the Board of Directors.
Note 2. Significant accounting methods
The half year consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, as adopted by the European Union, and IAS 34 on Interim Financial Reporting.
The accounting methods are identical to those mentioned in the 2011 Annual Financial Report.
Some figures in this half year report have been rounded up and, consequently, the overall totals in this report may differ slightly from the exact sum of the preceding figures.
Note 3. Operational and financial risk management
As of 30.06.12, the Group is facing substantially the same risks as those identified and mentioned in the 2011 Annual Financial Report. Risk management during the first half of 2012 was done using the same means and in accordance with the same criteria as those applied the previous year.
Note 4. Segment information (x €1,000) – Global portfolio
| INCOME STATEMENT | Offices | Nursing homes/ clinics |
networks | Property distribution | Others | Unallocated amounts | TOTAL | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| AT 30.06 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Net rental income | 61,622 | 59,871 | 34,932 | 29,541 | 18,558 | 14,319 | 1,951 | 1,766 | 117,063 | 105,497 | ||
| Property result after direct property costs | 54,099 | 54,484 | 34,770 | 29,492 | 18,217 | 14,139 | 1,825 | 2,579 | 108,911 | 100,694 | ||
| Property management costs | -7,846 | -7,022 | -7,846 | -7,022 | ||||||||
| Corporate management costs |
3,794 | -3,682 | -3,794 | -3,682 | ||||||||
| Gains or losses on disposals of investment properties | 4,556 | 422 | 95 | 91 | -123 | 95 | 4,946 | |||||
| Changes in fair value of investment properties | -27,005 | -20,330 | 23,663 | 4,680 | 7,768 | -100 | 3,636 | 418 | -583 | 8,062 | -15,915 | |
| Other result on the portfolio | -47 | -1,724 | 35,216 | -1,771 | 35,216 | |||||||
| Operating result | 103,657 | 74,636 | ||||||||||
| Financial result | -28,466 | -28,733 | -28,466 | -28,733 | ||||||||
| Share in the result of associated companies and joint ventures |
-70 | -311 | -381 | |||||||||
| Taxes | -286 | 267 | -489 | -1,982 | 34,887 | -2,490 | 34,887 | |||||
| NET RESULT | 72,320 | 80,790 | 72,320 | 80,790 | ||||||||
| NET RESULT – GROUP SHARE |
69,559 | 76,061 | 69,559 | 76,061 |
| BALANCE SHEET | Offices | Nursing homes/ | Property distribution | Others Unallocated amounts |
TOTAL | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| clinics | networks | |||||||||||
| AT 30.06/31.12 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Assets | ||||||||||||
| Goodwill | 26,929 | 26,929 | 130,527 | 130,527 | 157,456 | 157,456 | ||||||
| Investment properties | 1,536,136 | 1,551,568 | 1,127,712 | 1,071,786 | 516,709 | 509,045 | 63,951 | 45,171 | 3,244,508 | 3,177,560 | ||
| Of which: Development projects | 70,878 | 3,370 | 50,248 | 48,446 | 6,132 | 5,937 | 127,258 | 57,752 | ||||
| Assets held for own use | 9,152 | 9,130 | 9,152 | 9,130 | ||||||||
| Assets held for sale | 9,760 | 8,740 | 3,095 | 3,285 | 12,855 | 12,025 | ||||||
| Other assets | 207,344 | 181,900 | 207,344 | 181,900 | ||||||||
| TOTAL ASSETS | 3,622,163 | 3,528,941 | ||||||||||
| Shareholders' equity and Liabilities | ||||||||||||
| Shareholders' equity | 1,497,975 | 1,515,544 | 1,497,975 | 1,515,544 | ||||||||
| Shareholders' equity attributable to | ||||||||||||
| shareholders of parent company | 1,438,198 | 1,460,887 | 1,438,198 | 1,460,887 | ||||||||
| Minority interests | 59,777 | 54,657 | 59,777 | 54,657 | ||||||||
| Liabilities | 2,124,188 | 2,013,397 | 2,124,188 | 2,013,397 | ||||||||
| TOTAL SHAREHOLDERS' EQUITY AND | ||||||||||||
| LIABILITIES | 3,622,163 | 3,528,941 |
Note 4. Segment information (x €1,000) – Offices
| INCOME STATEMENT | Brussels Brussels |
Brussels Periphery | Antwerp | Other Regions | TOTAL | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CBD1 | Decentralised | |||||||||||
| AT 30.06 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Net rental income | 29,218 | 23,421 | 21,200 | 21,155 | 5,394 | 5,575 | 2,063 | 5,678 | 3,747 | 4,042 | 61,622 | 59,871 |
| Property result after direct property costs | 26,335 | 22,230 | 17,666 | 18,281 | 4,937 | 4,906 | 1,575 | 5,161 | 3,586 | 3,906 | 54,099 | 54,484 |
| Property management costs | ||||||||||||
| Corporate management costs |
||||||||||||
| Gains or losses on disposals of investment properties | 4,556 | 4,556 | ||||||||||
| Changes in fair value of investment properties | -18,247 | -10,683 | -10,329 | -3,923 | 1,626 | -5,547 | 92 | -2,826 | -147 | 2,649 | -27,005 | -20,330 |
| Other result on the portfolio | ||||||||||||
| Operating result | ||||||||||||
| Financial result | ||||||||||||
| Share in the result of associated companies and joint ventures | ||||||||||||
| Taxes | ||||||||||||
| NET RESULT | ||||||||||||
| NET RESULT – GROUP SHARE |
| BALANCE SHEET | Brussels | Brussels Decentralised | Brussels Periphery | Antwerp | Other Regions | TOTAL | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CBD | |||||||||||||
| AT 30.06/31.12 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |
| Assets | |||||||||||||
| Goodwill | |||||||||||||
| Investment properties | 602,558 | 609,876 | 614,482 | 623,490 | 146,007 | 144,381 | 60,816 | 60,732 | 112,273 | 113,089 | 1,536,136 | 1,551,568 | |
| Of which: | Development projects | 69,717 | 1,435 | 377 | 196 | 304 | 296 | 422 | 412 | 58 | 1,031 | 70,878 | 3,370 |
| Assets held for own use | 9,152 | 9,130 | 9,152 | 9,130 | |||||||||
| Assets held for sale | |||||||||||||
| Other assets | |||||||||||||
| TOTAL ASSETS | |||||||||||||
| Shareholders' equity and Liabilities | |||||||||||||
| Shareholders' equity | |||||||||||||
| Shareholders' equity attributable to shareholders of parent company |
|||||||||||||
| Minority interests | |||||||||||||
| Liabilities | |||||||||||||
| TOTAL SHAREHOLDERS' EQUITY AND | |||||||||||||
| LIABILITIES |
1 Central Business District.
Note 4. Segment information (x €1,000) – Nursing homes/clinics
| INCOME STATEMENT | Belgium | France | TOTAL | |||
|---|---|---|---|---|---|---|
| AT 30.06 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Net rental income | 20,825 | 17,110 | 14,107 | 12,431 | 34,932 | 29,541 |
| Property result after direct property costs | 20,678 | 17,068 | 14,092 | 12,424 | 34,770 | 29,492 |
| Property management costs | ||||||
| Corporate management costs |
||||||
| Gains or losses on disposals of investment properties | 422 | 422 | ||||
| Changes in fair value of investment properties | 12,794 | 3,738 | 10,869 | 942 | 23,663 | 4,680 |
| Other result on the portfolio | ||||||
| Operating result | ||||||
| Financial result | ||||||
| Share in the result of associated companies and joint ventures | -70 | -70 | ||||
| Taxes | -62 | -224 | -286 | |||
| NET RESULT | ||||||
| NET RESULT – GROUP SHARE |
| BALANCE SHEET | Belgium | France | TOTAL | |||
|---|---|---|---|---|---|---|
| AT 30.06/31.12 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Assets | ||||||
| Goodwill | 26,929 | 26,929 | 26,929 | 26,929 | ||
| Investment properties | 725,307 | 679,229 | 402,405 | 392,557 | 1,127,712 | 1,071,786 |
| Of which: Development projects |
50,248 | 48,339 | 107 | 50,248 | 48,446 | |
| Assets held for own use | ||||||
| Assets held for sale | 9,760 | 8,740 | 9,760 | 8,740 | ||
| Other assets | ||||||
| TOTAL ASSETS | ||||||
| Shareholders' equity and Liabilities | ||||||
| Shareholders' equity | ||||||
| Shareholders' equity attributable to shareholders of parent company | ||||||
| Minority interests | ||||||
| Liabilities | ||||||
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES |
Note 4. Segment information (x €1,000) – Property distribution networks
| INCOME STATEMENT | Pubstone - | Belgium | Pubstone - | Netherlands | Cofinimur I - France |
TOTAL | ||
|---|---|---|---|---|---|---|---|---|
| AT 30.06 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Net rental income | 9,842 | 9,573 | 4,874 | 4,746 | 3,842 | 18,558 | 14,319 | |
| Property result after direct property costs | 9,658 | 9,528 | 4,737 | 4,611 | 3,822 | 18,217 | 14,139 | |
| Property management costs | ||||||||
| Corporate management costs |
||||||||
| Gains or losses on disposals of investment properties | 95 | 91 | 95 | 91 | ||||
| Changes in fair value of investment properties | 5,852 | 396 | -140 | -496 | 2,056 | 7,768 | -100 | |
| Other result on the portfolio | -47 | -47 | ||||||
| Operating result | ||||||||
| Financial result | ||||||||
| Share in the result of associated companies and joint ventures | ||||||||
| Taxes | 267 | 267 | ||||||
| NET RESULT | ||||||||
| NET RESULT – GROUP SHARE |
| BALANCE SHEET | Pubstone - | Belgium | Pubstone - | Netherlands | Cofinimur I - | France | TOTAL | |
|---|---|---|---|---|---|---|---|---|
| AT 30.06/31.12 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Assets | ||||||||
| Goodwill | 91,877 | 91,877 | 38,650 | 38,650 | 130,527 | 130,527 | ||
| Investment properties | 263,166 | 258,085 | 149,178 | 149,235 | 104,365 | 101,725 | 516,709 | 509,045 |
| Of which: Development projects |
||||||||
| Assets held for own use | ||||||||
| Assets held for sale | 3,095 | 3,285 | 3,095 | 3,285 | ||||
| Other assets | ||||||||
| TOTAL ASSETS | ||||||||
| Shareholders' equity and Liabilities | ||||||||
| Shareholders' equity | ||||||||
| Shareholders' equity attributable to | ||||||||
| shareholders of parent company | ||||||||
| Minority interests | ||||||||
| Liabilities | ||||||||
| TOTAL SHAREHOLDERS' EQUITY AND | ||||||||
| LIABILITIES |
Note 4. Segment information (x €1,000) – Others
| INCOME STATEMENT | Brussels | Brussels | Brussels | Antwerp | Other Regions | TOTAL | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CBD | Decentralised | Periphery | ||||||||||
| AT 30.06 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Net rental income | 1,187 | 1,067 | 490 | 465 | 274 | 234 | 1,951 | 1,766 | ||||
| Property result after direct property costs | 1,184 | 1,064 | 489 | 463 | 152 | 1,052 | 1,825 | 2,579 | ||||
| Property management costs | ||||||||||||
| Corporate management costs |
||||||||||||
| Gains or losses on disposals of investment properties | -123 | -123 | ||||||||||
| Changes in fair value of investment properties | 114 | 564 | 65 | -146 | 7 | 3,450 | 3,636 | 418 | ||||
| Other result on the portfolio | ||||||||||||
| Operating result | ||||||||||||
| Financial result | ||||||||||||
| Share in the result of associated companies and joint ventures | -311 | -311 | ||||||||||
| Taxes | -489 | -489 | ||||||||||
| NET RESULT | ||||||||||||
| NET RESULT – GROUP SHARE |
| BALANCE SHEET | Brussels CBD |
Brussels Decentralised | Brussels Periphery |
Antwerp | Other Regions | TOTAL | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| AT 30.06/31.12 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Assets | ||||||||||||
| Goodwill | ||||||||||||
| Investment properties | 34,944 | 34,814 | 10,287 | 10,222 | 142 | 135 | 18,578 | 63,951 | 45,171 | |||
| Of which: Development projects |
4,226 | 4,030 | 1,906 | 1,907 | 6,132 | 5,937 | ||||||
| Assets held for own use | ||||||||||||
| Assets held for sale | ||||||||||||
| Other assets | ||||||||||||
| TOTAL ASSETS | ||||||||||||
| Shareholders' equity and Liabilities | ||||||||||||
| Shareholders' equity | ||||||||||||
| Shareholders' equity attributable to shareholders of parent | ||||||||||||
| company | ||||||||||||
| Minority interests | ||||||||||||
| Liabilities | ||||||||||||
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES |
| Note 5. Rental income and rental-related expenses (x €1,000) | |||
|---|---|---|---|
| 30.06.2012 | 30.06.2011 | |
|---|---|---|
| Rental income | ||
| Gross potential income | 101,882 | 102,569 |
| Vacancy | -5,468 | -6,643 |
| Rents1 | 96,414 | 95,926 |
| Cost of rent free periods | -690 | -440 |
| Concessions granted to tenants | -373 | -916 |
| Indemnities for early termination of rental contracts | 11,628 | 293 |
| SUB-TOTAL | 106,979 | 94,863 |
| Writeback of lease payments sold and discounted | 11,497 | 10,468 |
| Rental-related expenses | ||
| Rent payable on rented premises | -1,440 | -42 |
| Writedowns on trade receivables | -198 | |
| Writeback of writedowns on trade receivables | 27 | 406 |
| SUB-TOTAL | -1,413 | 166 |
| TOTAL | 117,063 | 105,497 |
The classification method and treatment of rental income and charges are detailed in the 2011 Annual Financial Report, on page 148.
Note 6. Financial income (x €1,000)
| 30.06.2012 | 30.06.2011 | |
|---|---|---|
| Interests and dividends received | 1,101 | 1,251 |
| Interest receipts in respect of finance lease receivables | 1,586 | 1,488 |
| Other financial income | 61 | 33 |
| TOTAL | 2,748 | 2,772 |
1 Including income guaranteed by developers to replace rents.
Note 7. Net interest charges (x €1,000)
| 30.06.2012 | 30.06.2011 | |
|---|---|---|
| Nominal interest on loans with amortised cost | -14,706 | -14,857 |
| Bilateral loans – floating rate | -5,431 | -7,067 |
| Syndicated loans – floating rate | -472 | -2,010 |
| Treasury bills – floating rate | -1,917 | -1,027 |
| Investment credits – floating or fixed rate | -782 | -365 |
| Debenture loan – fixed rate | -6,104 | -4,388 |
| Charges relating to authorised hedging instruments | -14,465 | -13,851 |
| Authorised hedging instruments qualifying for hedge accounting | -12,314 | -11,669 |
| Authorised hedging instruments not qualifying for hedge accounting | -2,151 | -2,182 |
| Income relating to authorised hedging instruments | 10 | |
| Authorised hedging instruments qualifying for hedge accounting | 10 | |
| Other interest charges | -1,528 | -1,660 |
| TOTAL | -30,689 | -30,368 |
Note 8. Other financial charges (x €1,000)
| 30.06.2012 | 30.06.2011 | |
|---|---|---|
| Bank costs and other commissions | -168 | -115 |
| Net realised losses on disposals of financial assets | -3 | -3 |
| Others | -64 | -74 |
| TOTAL | -235 | -192 |
Note 9. Changes in fair value of financial assets and liabilities (x €1,000)
| 30.06.2012 | 30.06.2011 | |
|---|---|---|
| Authorised hedging instruments qualifying for hedge accounting | 9,613 | -4,385 |
| Authorised hedging instruments not qualifying for hedge accounting | -1,434 | 2,744 |
| Others (convertible bond) | -8,469 | 696 |
| TOTAL | -290 | -945 |
Note 10. Investment properties (x €1,000)
| 30.06.2012 | 31.12.2011 | |
|---|---|---|
| Properties available for lease | 3,108,098 | 3,110,678 |
| Development projects | 127,258 | 57,752 |
| Assets held for own use | 9,152 | 9,130 |
| TOTAL | 3,244,508 | 3,177,560 |
Properties available for lease (x €1,000)
| 30.06.2012 | 31.12.2011 | |
|---|---|---|
| AT 01.01 | 3,110,678 | 2,990,379 |
| Capital expenditures | 1,188 | 8,268 |
| Acquisitions | 32,747 | 241,954 |
| Transfers from/to Assets held for sale | -1,400 | -10,200 |
| Transfers from/to Development projects | -58,593 | 25,132 |
| Sales/Disposals (fair value of assets sold/disposed of) | -1,354 | -161,218 |
| Writeback of lease payments sold | 11,497 | 20,999 |
| Increase/Decrease in fair value | 13,335 | -4,636 |
| AT 30.06/31.12 | 3,108,098 | 3,110,678 |
Development projects (x €1,000)
| 30.06.2012 | 31.12.2011 | |
|---|---|---|
| AT 01.01 | 57,752 | 42,656 |
| Capital expenditures | 10,402 | 29,732 |
| Acquisitions | 5,235 | 14,093 |
| Transfer from/to Properties available for lease | 58,593 | -25,132 |
| Sales/Disposals (fair value of assets sold/disposed of) | -11 | |
| Increase/Decrease in fair value | -4,724 | -3,586 |
| AT 30.06/31.12 | 127,258 | 57,752 |
Assets held for own use (x €1,000)
| 30.06.2012 | 31.12.2011 | |
|---|---|---|
| AT 01.01 | 9,130 | 8,881 |
| Increase/Decrease in fair value | 22 | 249 |
| AT 30.06/31.12 | 9,152 | 9,130 |
Note 11. Share capital and share premium
| Ordinary shares | Convertible preference | TOTAL | ||||
|---|---|---|---|---|---|---|
| shares | ||||||
| (in number) | 30.06.2012 | 31.12.2011 | 30.06.2012 | 31.12.2011 | 30.06.2012 | 31.12.2011 |
| Number of shares (A) | ||||||
| AT 01.01 | 15,220,653 | 13,667,092 | 1,067,809 | 1,249,310 | 16,288,462 | 14,916,402 |
| Issued against contribution in kind | 390,778 | 330,246 | 390,778 | 330,246 | ||
| Issued in mergers to Group subsidiaries | 1,041,767 | 1,041,767 | ||||
| Conversion of convertible bonds into ordinary shares | 47 | 47 | ||||
| Conversion of preference shares into ordinary shares | 241,189 | 181,501 | -241,189 | -181,501 | ||
| AT 30.06/31.12 | 15,852,620 | 15,220,653 | 826,620 | 1,067,809 | 16,679,240 | 16,288,462 |
| Own shares held by the Group (B) | ||||||
| AT 01.01 | 1,094,374 | 52,607 | 1,094,374 | 52,607 | ||
| Issued in mergers to Group subsidiaries | 1,041,767 | 1,041,767 | ||||
| Own shares sold/purchased – net |
-119,186 | -119,186 | ||||
| AT 30.06/31.12 | 975,188 | 1,094,374 | 975,188 | 1,094,374 | ||
| Shares outstanding (A-B) | ||||||
| AT 01.01 | 14,126,279 | 13,614,485 | 1,067,809 | 1,249,310 | 15,194,088 | 14,863,795 |
| AT 30.06/31.12 | 14,877,432 | 14,126,279 | 826,620 | 1,067,809 | 15,704,052 | 15,194,088 |
| Ordinary shares | Convertible preference shares | TOTAL | ||||
|---|---|---|---|---|---|---|
| (x €1000) | 30.06.2012 | 31.12.2011 | 30.06.2012 | 31.12.2011 | 30.06.2012 | 31.12.2011 |
| Capital | ||||||
| AT 01.01 | 757,287 | 729,909 | 56,941 | 66,619 | 814,228 | 796,528 |
| Issued as optional dividend | 20,941 | 17,697 | 20,941 | 17,697 | ||
| Own shares sold/purchased – net |
6,388 | 6,388 | ||||
| Conversion of preference shares into ordinary shares | 9,678 | -9,678 | ||||
| Conversion of convertible bonds into ordinary shares | 3 | 3 | ||||
| AT 30.06/31.12 | 784,616 | 757,287 | 56,941 | 56,941 | 841,557 | 814,228 |
| Share premium account | ||||||
| AT 01.01 | 256,024 | 447,215 | 56,305 | 65,878 | 312,330 | 513,093 |
| Issued as optional dividend | 11,165 | 13,321 | 11,165 | 13,321 | ||
| Own shares sold/purchased – net |
1,719 | 1,719 | ||||
| Conversion of preference shares into ordinary shares | 9,572 | -9,572 | ||||
| Conversion of convertible bonds into ordinary shares | 2 | 2 | ||||
| Reclassification of share premiums | -214,086 | -214,086 | ||||
| AT 30.06/31.12 | 268,908 | 256,024 | 56,305 | 56,306 | 325,214 | 312,330 |
Note 12. Result per share
| 30.06.2012 | 30.06.2011 | |
|---|---|---|
| Result attributable to ordinary and preference shares (x €1,000) | ||
| Net current result attributable to ordinary and preference shares | 64,705 | 56,113 |
| Net current result for the period | 66,513 | 56,543 |
| Minority interests | -1,808 | -430 |
| Result on portfolio attributable to ordinary and preference shares | 4,854 | 19,948 |
| Result on portfolio for the period | 5,807 | 24,247 |
| Minority interests | -953 | -4,299 |
| Net result attributable to ordinary and preference shares | 69,559 | 76,061 |
| Net result for the period | 72,320 | 80,790 |
| Minority interests | -2,761 | -4,729 |
| Result per share (in €) | 30.06.2012 | 30.06.2011 |
|---|---|---|
| Number of ordinary and preference shares entitled to share in the result of the period |
15,704,052 | 15,194,041 |
| Net current result per share – Group share | 4.12 | 3.69 |
| Result on portfolio per share – Group share | 0.31 | 1.32 |
| Net result per share – Group share | 4.43 | 5.01 |
Note 13. Consolidation scope and criteria
Scope of consolidation
| Name and address of the registered office of fully consolidated subsidiaries |
VAT or national number (NN) |
Direct and indirect shareholdings and voting rights (as a %) |
|---|---|---|
| BELLIARD I-II PROPERTIES SA Boulevard de la Woluwe 58, 1200 Brussels |
BE 832 136 571 | 100.00 |
| BELLIARD III-IV PROPERTIES SA | ||
| Boulevard de la Woluwe 58, 1200 Brussels | BE 475 162 121 | 100.00 |
| BOLIVAR PROPERTIES SA Boulevard de la Woluwe 58, 1200 Brussels |
BE 878 423 981 | 100.00 |
| COFINIMMO FRANCE SA | FR 88 487 542 169 | 100.00 |
| Avenue de l'Opéra 27, 75001 Paris (France) | ||
| SAS IS II Avenue de l'Opéra 27, 75001 Paris (France) |
FR 74 393 097 209 | 100.00 |
| SCI AC NAPOLI | FR 71 428 295 695 | 100.00 |
| Avenue de l'Opéra 27, 75001 Paris (France) SCI BEAULIEU |
||
| Avenue de l'Opéra 27, 75001 Paris (France) | FR 50 444 644 553 | 100.00 |
| SCI CHAMTOU Avenue de l'Opéra 27, 75001 Paris (France) |
FR 11 347 555 203 | 100.00 |
| SCI CUXAC II Avenue de l'Opéra 27, 75001 Paris (France) |
FR 18 343 262 341 | 100.00 |
| SCI DE L'ORBIEU Avenue de l'Opéra 27, 75001 Paris (France) |
FR 14 383 174 380 | 100.00 |
| SA DOMAINE DE VONTES Avenue de l'Opéra 27, 75001 Paris (France) |
FR 67 654 800 135 | 100.00 |
| SCI DU DONJON Avenue de l'Opéra 27, 75001 Paris (France) |
FR 06 377 815 386 | 100.00 |
| SNC DU HAUT CLUZEAU | FR 39 319 119 921 | 100.00 |
| Avenue de l'Opéra 27, 75001 Paris (France) SARL HYPOCRATE DE LA SALETTE |
not subject to VAT | |
| Avenue de l'Opéra 27, 75001 Paris (France) | NN 388 117 988 | 100.00 |
| SCI LA NOUVELLE PINÈDE Avenue de l'Opéra 27, 75001 Paris (France) |
FR 78 331 386 748 | 100.00 |
| SCI PRIVATEL INVESTISSEMENT Avenue de l'Opéra 27, 75001 Paris (France) |
FR 13 333 264 323 | 100.00 |
| SCI RESIDENCE FRONTENAC | FR 80 348 939 901 | 100.00 |
| Avenue de l'Opéra 27, 75001 Paris (France) SCI SOCIBLANC |
not subject to VAT | |
| Avenue de l'Opéra 27, 75001 Paris (France) | NN 328 781 844 | 100.00 |
| COFINIMMO LUXEMBOURG SA | not subject to VAT | |
| Boulevard Grande-Duchesse Charlotte 56, | NN 100 044 | 100.00 |
| 1331 Luxembourg (Luxembourg) | ||
| COFINIMMO SERVICES SA Boulevard de la Woluwe 58, 1200 Brussels |
BE 437 018 652 | 100.00 |
| COFINIMUR I SA | ||
| Avenue George V 10, 75008 Paris (France) | FR 74 537 946 824 | 97.65 |
| EGMONT PROPERTIES SA | BE 819 801 042 | 100.00 |
| Boulevard de la Woluwe 58, 1200 Brussels | ||
| GALAXY PROPERTIES SA Boulevard de la Woluwe 58, 1200 Brussels |
BE 872 615 562 | 100.00 |
| IMMOPOL DENDERMONDE SA | ||
| Boulevard de la Woluwe 58, 1200 Brussels | BE 845 261 958 | 100.00 |
| KOSALISE SA Boulevard de la Woluwe 58, 1200 Brussels |
BE 467 054 604 | 100.00 |
| LEOPOLD SQUARE SA | ||
| Boulevard de la Woluwe 58, 1200 Brussels | BE 465 387 588 | 100.00 |
| PARKSIDE INVEST SA | BE 881 606 373 | 100.00 |
|---|---|---|
| Boulevard de la Woluwe 58, 1200 Brussels | ||
| PUBSTONE GROUP SA | BE 878 010 643 | 90.0006 |
| Boulevard de la Woluwe 58, 1200 Brussels | ||
| PUBSTONE SA | 1 | |
| Boulevard de la Woluwe 58, 1200 Brussels | BE 405 819 096 | 90.00 |
| PUBSTONE HOLDING BV | not subject to VAT | 1 |
| Prins Bernhardplein 200, 1097 JB Amsterdam (Netherlands) | NN 8185 89 723 | 90.00 |
| PUBSTONE PROPERTIES I BV | ||
| Prins Bernhardplein 200, 1097 JB Amsterdam (Netherlands) | NL 00.11.66.347.B.01 | 90.001 |
| PUBSTONE PROPERTIES II BV | ||
| Prins Bernhardplein 200, 1097 JB Amsterdam (Netherlands) | NL 00.26.20.005.B.01 | 90.001 |
| RHEASTONE SA | ||
| Boulevard de la Woluwe 58, 1200 Brussels | BE 893 787 296 | 100.00 |
| LE PROGRES SPRL | ||
| Boulevard de la Woluwe 58, 1200 Brussels | BE 458 308 469 | 100.00 |
| SILVERSTONE SA | ||
| Boulevard de la Woluwe 58, 1200 Brussels | BE 452 711 074 | 95.00 |
| SUPERSTONE SA | ||
| Claudius Prinsenlaan 128, 4818 CP Breda (Netherlands) | NL 85.07.32.554.B.01 | 100.00 |
| Name and address of the registered office of associated companies and joint ventures consolidated using the equity consolidation method |
VAT or national number (NN) |
Direct and indirect shareholdings and voting rights (as a %) |
|---|---|---|
| COFINEA I SAS Avenue de l'Opéra 27, 75001 Paris (France) |
FR 74 538 144 122 | 51.00 |
| FPR LEUZE SA Boulevard de la Woluwe 58, 1200 Brussels |
BE 839 750 279 | 50.00 |
Consolidation criteria
The consolidation criteria given in the 2011 Annual Financial Report have not been changed and are still applied by the Cofinimmo Group.
Note 14. Transactions between related parties
In January 2012, Cofinimmo and Senior Assist finalised an agreement relating to a property portfolio of nursing homes operated by Senior Assist. In this context, the company Maison Saint-Ignace was registered as an institutional Sicafi/Bevak and was renamed Silverstone SA. Cofinimmo and Senior Assist are the sole shareholders of Silverstone, with stakes of 95% and 5% respectively. See also page 6 of this Report.
In April 2012, the Cofinimmo Group acquired 100% of the shares of the company Immopol Dendermonde SA owned by Cordeel Zetel Temse SA and Cordeel Zetel Hoeselt SA. The company Immopol Dendermonde SA has as sole asset a police station located in Dendermonde. See also page 7 of this Report.
During the same month of April, Cofinimmo and the ORPEA Group acquired the premises of an EHPAD2 in Paris. The acquisition was made by a joint venture, Cofinea I SAS, a company under
1 Economic interest.
2 EHPAD (Etablissement d'Hébergement pour Personnes Âgées Dépendantes). In France, this is the most widespread form of institution for the elderly.
French law in which Cofinimmo holds a 51% stake and the ORPEA Group the remaining 49%. See also pages 6 and 7 of this Report.
In May 2012, the Board of Directors gave the holders of both ordinary and preference shares the option of payment of the 2011 dividend in new ordinary shares or in cash or a combination of the two. See also page 26 of this Report.
These transactions are transactions between related parties within the meaning of Articles 18 § 1 and 31 § 2 of the Royal Decree of 07.12.2010. These operations were made with respect to the procedures applicable in case of conflicts of interests and at normal market conditions.
Notice with respect to note 4 of the 2011 Annual Financial Report
Cofinimmo wishes to bring a correction to note 4 on page 143 of the 2011 Annual Financial Report, with respect to the acquisition of a portfolio of MAAF agencies and offices by Cofinimur I, in partnership with Atland, on 28.12.2011.
The table presented in note 4 on page 143 of the 2011 Annual Financial Report is the statutory balance sheet of Cofinimur I expressed at fair value at the acquisition date, rather than the impact of the acquisition on the consolidated accounts of Cofinimmo on 31.12.2011.
3. Statement of Conformity (pursuant to Article 13 of the Royal Decree of 14.11.2007)
The Board of Directors of Cofinimmo SA assumes the responsibility for the content of this 2012 Half Year Financial Report, subject to the information supplied by third parties, including the reports of the statutory auditor and the real estate experts.
Mr. André Bergen, in his capacity as Chairman of the Board of Directors, Mr. Jean Edouard Carbonnelle, Mr. Xavier Denis, Mr. Xavier de Walque, Mr. Vincent Doumier, Mr. Robert Franssen, Mr. Gaëtan Hannecart, Mr. Alain Schockert, Mr. Gilbert van Marcke de Lummen, Mr. Baudouin Velge and Mrs. Françoise Roels, in their capacity as Directors,
declare that to the best of their knowledge:
- a. the 2012 Half Year Financial Report contains a true and fair statement of the important events and, as the case may be, major transactions between related parties which occurred during the first six months of the year, and their incidence on the financial statements;
- b. this Report has no omissions likely to significantly modify the scope for any statements made in it;
- c. the financial statements, prepared in accordance with the applicable accounting standards, have been submitted to the statutory auditor for a limited review and give a true and fair view of the portfolio, financial situation and results of Cofinimmo and its subsidiaries included in the scope of consolidation; the interim management report provides moreover a perspective for the full year result as well as comments on the risks and uncertainties facing the company (see page 2 of the 2011 Annual Financial Report and page 29 of this 2012 Half Year Financial Report).
For further information: Valérie Kibieta Chloé Dungelhoeff Tel.: +32 2 373 60 36 Tel.: +32 2 777 08 77
Investor Relations Manager Corporate Communication Manager [email protected] [email protected]
About Cofinimmo
Cofinimmo is the premier listed Belgian real estate company specialising in rental property. The company's property portfolio is valued at over €3.3 billion and represents a total area of 1,860,000m². Its main investment segments are offices, nursing homes and property distribution networks. Cofinimmo is an independent company which manages its properties in-house. It is listed on Euronext Brussels (BEL20) and is recognised for tax purposes as a Sicafi/Bevak in Belgium and a SIIC in France. As at 30.06.12, its total market capitalisation was €1.5 billion.
www.cofinimmo.com
Appendices
-
- Real estate expert's report
-
- Statutory auditor's report
| Investment Value | Fair Value | % Fair Value | |
|---|---|---|---|
| Offices | 1.574.539.000 € | 1.536.135.700 € | 47,16% |
| Nursing Homes | 1.178.424.600 € | 1.137.471.800 € | 34,92% |
| Distribution prop. net. | 564.187.700 € | 519.804.000 € | 15,96% |
| Others | 65.549.700 € | 63.950.900 € | 1,96% |
| Total | 3 382 701 000 $\in$ | 3.257.362.400 $\in$ | 100.00% |