Earnings Release • May 7, 2012
Earnings Release
Open in ViewerOpens in native device viewer
by the board of directors for the first quarter of 2012
Antwerp, 7 May 2012
Improved operating distributable result per share: € 0,48 (+ 35 %)
Slight increase in fair value of the real estate portfolio
96 % of the space previously occupied by Tibotec-Virco has again been rented
The operating distributable result of Intervest Offices & Warehouses has increased to € 6,6 million in the first quarter of 2012, an increase of 35 % compared to the first quarter of 2011 (€ 4,9 million)1. This result derives primarily from the increase in rental income from the acquisitions and leases achieved in 2011, from stable property charges and from reduced borrowing costs of the property investment fund as new interest rate swaps at lower interest rates take effect. The average interest rate of the real estate investment fund for the first quarter of 2012 is approximately 3,7 %, including bank margins, compared with 4,9 % in the same period of 2011 (4,6 % for financial year 2011).
This means that there is an operating distributable result for the first quarter of 2012 of € 0,48 per share, compared to € 0,35π in the first quarter of 2011. This is an increase of 20 % in comparison to the fourth quarter of 2011, when € 0,40 per share was achieved.
3T Estate - Vilvorde - 8.757 m2
1 Comparative figures for the first quarter of 2011 have been adjusted in line with the amended valuation rule for compensation received as a result of early termination of lease contracts, as described in the 2011 Annual Report and in the press release on the annual results dated 14 February 2012. The effect on the comparative figures for the first quarter of 2011 is a reduction of rental income and, as a result, a reduction of the net result and distributable operating result of the property investment fund, amounting to € 184.000, in comparison with the published figures for the first quarter of 2011 (see press release Interim statement by the board of directors for the first quarter of 2011 dated 26 April 2011). To improve the readability of this press release, it has been decided to place the symbol π next to all comparative figures for financial year 2011 that have been adjusted with respect to the amended valuation rule and that appear in the published press release.
In March 2012, property investment fund Intervest Offices & Warehouses has concluded two additional leases with the biotechnology company Biocartis for 1.254 m² of office space and 1.415 m² of laboratory space in Intercity Business Park in Malines. The two lease contracts have a fixed term of 15 years, with a termination option after 9 years. This further expansion of Biocartis' leasing commitments represents an annual gross rental income of approximately € 420.0002. With a total surface of 6.639 m² of offices and laboratories, under long-term lease, Biocartis is now the largest tenant of Intervest Offices & Warehouses at Intercity Business Park. As a result of this lease transaction, Intervest Offices & Warehouses has included a portion of the compensation received in 2010 from Tibotec-Virco as profit, in the amount of € 0,5 million for the first quarter of 2012.
A lease contact has also been concluded in the first quarter of 2012 with Verhaeren & Co (road construction) for a surface area of 2.149 m² of office and storage space in Mechelen Campus (building F, formerly leased by Tibotec-Virco). The lease contract has a duration of 9 years, with an option to terminate after 6 years.
As a result of the above-mentioned transactions with Biocartis and Verhaeren & Co, 96 % of the space previously leased by Tibotec-Virco has been re-leased as on 31 March 2012 to tenants within or outside the existing portfolio of Intervest Offices & Warehouses (being 18.725 m² out of a total of 19.526 m²).
Other important rental transactions in the first quarter of 2012 concern the agreement with Galy Sport for 1.482 m² of office and storage space in the Berchem Technology Center building in Berchem-Sainte-Agathe and the agreement with Tempo Team for 636 m² of office space in Vilvoorde 3T Estate, building A.
At 31 March 2012, the occupancy rate3 of Intervest Offices & Warehouses NV was 86 %, remaining unchanged in comparison to 31 December 2011:
Tibotec-Virco, in keeping with the 2010 agreement regarding retrocession of rental income (see press release dated 3 June 2010).
2 For the period February 2012 to November 2013 / October 2014, half of the net rental income from these lease contracts will be shared with
3 The occupancy rate is calculated as the ratio of the commercial rental income to the same rental income plus the estimated rental value of the vacant locations for rent. The commercial rental income is the contractual rental income and the rental income of already signed lease contracts regarding locations which are contractually vacant on balance sheet date.
| Real estate patrimony | 31.3.2012 | 31.12.2011 | 31.3.2011 |
|---|---|---|---|
| Fair value of investment properties (€ 000) | 583.294 | 581.305 | 534.194 |
| Investment value of investment properties (€ 000) | 597.958 | 595.919 | 547.631 |
| Occupancy rate (%) | 86 % | 86 % | 82 % |
| Total leasable space (m²) | 627.096 | 627.096 | 553.221 |
The fair value of the investment properties of Intervest Offices & Warehouses amounts to € 583 million at 31 March 2012, compared to € 581 million at 31 December 2011. This increase in fair value of € 2 million is mainly due to the increase in the value of the logistics portfolio as a result of a new contract for solar panels on the Duffel Stocletlaan building and a prolongation of the lease contract for 9 years for a building in Aartselaar, Dijkstraat.
Berchem Technology Center - Berchem-Sainte-Agathe Storage hall 3.703 m2 - Offices 2.760 m2
| in thousands € | 31.3.2012 | 31.3.2011π |
|---|---|---|
| Rental income | 10.348 | 8.819 |
| Rental related expenses | -83 | -34 |
| Property management costs and income | 595 | 398 |
| Property result | 10.860 | 9.183 |
| Property charges | -1.176 | -1.195 |
| General costs and other operating income and costs | -379 | -291 |
| Operating result before result on portfolio | 9.305 | 7.697 |
| Changes in fair value of investment properties | 1.550 | -461 |
| Other result on portfolio | -131 | 6 |
| Operating result | 10.724 | 7.242 |
| Financial result (excl. change in fair value - IAS 39) | -2.671 | -2.770 |
| Changes in fair value of financial assets and liabilities (ineffective hedges - IAS 39) | -854 | 1.561 |
| Taxes | -4 | -5 |
| Net result | 7.195 | 6.028 |
| Note: | ||
| Operating distributable result | 6.630 | 4.922 |
| Result on portfolio | 1.419 | -455 |
| Changes in fair value of financial assets and liabilities (ineffective hedges - IAS 39) | -854 | 1.561 |
| Result per share | 31.3.2012 | 31.3.2011π |
|---|---|---|
| Number of shares entitled to dividend | 13.907.267 | 13.907.267 |
| Net result (€) | 0,52 | 0,43 |
| Operating distributable result (€) | 0,48 | 0,35 |
The rental income of Intervest Offices & Warehouses has increased by € 1,5 million to € 10,3 million (€ 8,8 million) in the first quarter of 2012, mainly as a result of acquisitions and leases achieved in 2011.
Property management costs and income shows a return of € 0,6 million (€ 0,4 million) in the first quarter of 2012 and includes compensations (received from Tibotec-Virco) received for rental charges following the additional rentals to Biocartis in Intercity Business Park, as well as refurbishment fees received.
Property charges amount to € 1,2 million for the first quarter of 2012, thus maintaining the level of the same period in 2011 (€ 1,2 million).
In the first quarter of 2012, general costs and other operating income and costs of the investment fund are € 0,4 million, a slight increase compared to the first quarter of 2011, mainly due to expansion of the workforce.
The increase in rental income and of the property management income ensures that the operating result before result on portfolio increases by 21 %, or € 1,6 million, to € 9,3 million (€ 7,7 million).
Changes in fair value of investment properties are positive in the first quarter of 2012 in the amount of € 1,6 million (- € 0,5 million), mainly due to the increase in the value of the logistics portfolio as a result of a new contract for solar panels on the Duffel Stocletlaan building and a prolongation of the lease contract for 9 years for a building in Aartselaar, Dijkstraat.
The financial result (excl. change in fair value - IAS 39) for the first quarter of 2012 amounts to - € 2,7 million (- € 2,8 million). This slight decrease is caused, on the one hand, by the introduction of new interest rate swaps at lower interest rates, and on the other hand, is partly offset by the increased use of credit facilities as a result of real estate acquisitions made in 2011 (for an amount of approximately € 52 million). The average interest rate for the property investment fund for the first quarter of 2012 is approximately 3,7 %, including bank margins (4,9 %).
As at 31 March 2012, 85 % of the credit lines are long-term financings, with an average remaining term of 3,5 years. 15 % of the credit lines are short-term financings with unlimited duration progressing each time for 364 or 30 days. The next date of maturity for a credit facility of the property investment fund is only in December 2013 (€ 10 million), which means that Intervest Offices & Warehouses does not need to carry out any major refinancing of its credit portfolio in 2012 and 2013.
At 31 March 2012, 66 % of the utilised credit lines had a fixed interest rate, or the rate is fixed by means of interest rate swaps. The interest rates on the credit facilities of the property investment fund remain fixed for a remaining average duration of 3,8 years.
The changes in fair value of financial assets and liabilities (non-effective hedges - IAS 39) include the decrease in market value of interest rate swaps that, in line with IAS 39, cannot be classified as cash flow hedging instruments, in the amount of - € 0,9 million (€ 1,6 million).
The net result of property investment fund Intervest Offices & Warehouses for the first quarter of 2012 amounts to € 7,2 million (€ 6,0 million) and may be divided into:
This results in an operating distributable result of € 0,48 per share (€ 0,35) for the first quarter of 2012.
The debt ratio of the property investment fund is 48,1 % at 31 March 2012, a decrease of 1,8 % compared to 31 December 2011 (49,9 %).
Herentals Logistics 2 - Herentals - Storage hall 40.540 m2 + 8.248 m2 (mezzanine) Offices 2.206 m2
| Balance sheet data per share | 31.3.2012 | 31.12.2011 |
|---|---|---|
| Number of shares entitled to dividend | 13.907.267 | 13.907.267 |
| Net asset value (fair value) (€) | 20,94 | 20,42 |
| Net asset value (investment value) (€) | 21,89 | 21,37 |
| Share price on closing date (€) | 20,40 | 18,15 |
| Discount to net asset value (fair value) (%) | - 3 % | - 11 % |
| Debt ratio (max. 65 %) (%) | 48,1 % | 49,9 % |
On 31 March 2012, the net asset value (fair value) of the share is € 20,94 (€ 20,42 at 31 December 2011). As the share price at 31 March 2012 is € 20,40, this means that the share is listed at the end of the first quarter of 2012 at a discount of 3 % compared to the net asset value (fair value).
The board of directors of Intervest Offices & Warehouses has decided to offer the property fund's shareholders a choice between receiving the dividend for 2011, in the form of either new ordinary shares, cash or a combination of these two payment methods. The terms of the optional dividend have been published in the press release dated 26 April 2012 and can be found on the website at www.intervestoffices.be.
Mechelen Campus - Malines - 60.768 m2
Despite the current economic uncertainties, Intervest Offices & Warehouses looks forward to the rest of 2012 with confidence.
Rental transactions with Biocartis and Verhaeren & Co show that Intervest Offices & Warehouses can achieve significant rental transactions, despite the competitive nature of the market. In particular, it should be noted that the fund succeeded in releasing practically all of premises formerly used by Tibotec-Virco at current market terms - in less than 18 months.
In addition, the property investment fund is optimistic regarding the expiry of current rental contracts. A number of agreements were already extended in the first quarter 2012. In forthcoming quarters, particular attention will be paid to the extension of rental agreements with optional or final termination dates in 2012 and 2013. The fund, accordingly, expects continuation of the 86 % occupancy rate.
As a result of the amended valuation rules of the property investment fund and due to the current economic climate, Intervest Offices & Warehouses has decided to adjust its dividend distribution policy with effect from financial year 2012 (i.e. dividend payable in 2013), so that the pay-out ratio will be between 80 % and 100 % of the operating distributable profit, depending on the compensation received for early termination of rental contracts and other compensation for rental damages.
INTERVEST OFFICES & WAREHOUSES SA, a public property investment fund under Belgian law, Jean-Paul Sols - CEO, or Inge Tas - CFO. tel: + 32 3 287 67 87, www.intervestoffices.be
| in thousands € | 31.3.2012 | 31.3.2011π |
|---|---|---|
| Rental income | 10.348 | 8.819 |
| Rental related expenses | -83 | -34 |
| NET RENTAL INCOME |
10.265 | 8.785 |
| Recovery of property charges | 554 | 427 |
| Recovery of charges and taxes normally payable by tenants on let properties | 2.224 | 1.662 |
| Costs payable by tenants and borne by the landlord for rental damage and refurbishment | -113 | -31 |
| Rental charges and taxes normally payable by tenants on let properties | -2.226 | -1.664 |
| Other rental related income and expenses | 156 | 4 |
| PROPERT Y RESULT |
10.860 | 9.183 |
| Technical costs | -183 | -342 |
| Commercial costs | -32 | -47 |
| Charges and taxes on unlet properties | -376 | -214 |
| Property management costs | -510 | -511 |
| Other property charges | -75 | -81 |
| PROPERT Y CHARGES |
-1.176 | -1.195 |
| OPERATING PROPERT Y RESULT |
9.684 | 7.988 |
| General costs | -393 | -296 |
| Other operating income and costs | 14 | 5 |
| OPERATING RESULT BEFORE RESULT ON PORTFOLIO |
9.305 | 7.697 |
| Changes in fair value of investment properties | 1.550 | -461 |
| Other result on portfolio | -131 | 6 |
| OPERATING RESULT | 10.724 | 7.242 |
| in thousands € | 31.3.2012 | 31.3.2011π |
|---|---|---|
| OPERATING RESULT | 10.724 | 7.242 |
| Financial income | 5 | 25 |
| Net interest charges | -2.670 | -2.790 |
| Other financial charges | -6 | -5 |
| Changes in fair value of financial assets and liabilities (ineffective hedges - IAS 39) | -854 | 1.561 |
| FINANCIAL RESULT | -3.525 | -1.209 |
| RESULT BEFORE TAXES |
7.199 | 6.033 |
| Taxes | -4 | -5 |
| NET RESULT |
7.195 | 6.028 |
| Attributable to: | ||
| Equity holders of the parent company | 7.195 | 6.028 |
| Minority interests | 0 | 0 |
| Note: | ||
| Operating distributable result | 6.630 | 4.922 |
| Result on portfolio | 1.419 | -455 |
| Changes in fair value of financial assets and liabilities (ineffective hedges - IAS 39) | -854 | 1.561 |
| Result per share | 31.3.2012 | 31.3.2011π |
| Number of shares entitled to dividend | 13.907.267 | 13.907.267 |
| Net result (€) | 0,52 | 0,43 |
Diluted net result (€) 0,52 0,43
Operating distributable result (€) 0,48 0,35
| in thousands € | 31.3.2012 | 31.3.2011π |
|---|---|---|
| NET RESULT |
7.195 | 6.028 |
| Changes in the effective part of fair value of authorised hedging instruments that are subject to hedge accounting |
-28 | 1.591 |
| COMPREHENSIVE INCOME Attributable to: |
7.167 | 7.619 |
| Equity holders of the parent company | 7.167 | 7.619 |
| Minority interests | 0 | 0 |
| ASSETS in thousands € | 31.3.2012 | 31.12.2011 |
|---|---|---|
| Non-current assets | 583.626 | 581.672 |
| Intangible assets | 31 | 37 |
| Investment properties | 583.294 | 581.305 |
| Other tangible assets | 286 | 316 |
| Trade receivables and other non-current assets | 15 | 14 |
| Current assets | 9.545 | 12.462 |
| Assets held for sale | 0 | 4.005 |
| Trade receivables | 2.875 | 1.687 |
| Tax receivables and other current assets | 3.207 | 4.520 |
| Cash and cash equivalents | 1.398 | 407 |
| Deferred charges and accrued income | 2.065 | 1.843 |
| SHAREHOLDERS' EQUITY AND LIABILITIES in thousands € | 31.3.2012 | 31.12.2011 |
|---|---|---|
| Shareholders' equity | 291.185 | 284.018 |
| Shareholders' equity attributable to the shareholders of the parent company | 291.145 | 283.978 |
| Share capital | 126.729 | 126.729 |
| Share premium | 60.833 | 60.833 |
| Reserves | 78.370 | 78.398 |
| Net result of financial year 2011 | 18.018 | 18.018 |
| Net result of financial year - first quarter 2012 | 7.195 | 0 |
| Minority interests | 40 | 40 |
| Liabilities | 301.986 | 310.116 |
| Non-current liabilities | 250.459 | 264.426 |
| Non-current financial debts | 244.395 | 259.143 |
| Credit institutions | 169.867 | 184.650 |
| Bond loan | 74.512 | 74.475 |
| Financial lease | 16 | 18 |
| Other non-current financial liabilities | 5.567 | 4.685 |
| Other non-current liabilities | 497 | 598 |
| Current liabilities | 51.527 | 45.690 |
| Provisions | 172 | 172 |
| Current financial debts | 38.018 | 34.018 |
| Credit institutions | 38.012 | 34.012 |
| Financial lease | 6 | 6 |
| Trade debts and other current debts | 2.303 | 2.641 |
| Other current liabilities | 276 | 399 |
| Accrued charges and deferred income | 10.758 | 8.460 |
| TOTAL SHAREHOLDERS ' EQUITY AND LIABILITIES |
593.171 | 594.134 |
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.