Annual Report • Mar 9, 2016
Annual Report
Open in ViewerOpens in native device viewer
Maia, Portugal - March 9th 2016
Sonae Sierra, the international shopping centre specialist, recorded a Net Profit of €142 million in 2015, a 47% increase which compares to the €96 million reached in 2014.
Direct Net Profit reached €61 million, a 16% increase y-o-y driven by improved operational results, the growth of professional services to third parties and lower interest rates. On a likefor-like portfolio basis, and excluding the adverse effect of the average exchange rate of Brazilian Real, Direct Net Profit increased by 22%, reflecting the resilience and quality of the assets portfolio and the Company's management ability.
Indirect Net Profit reached €81 million, an 85% growth compared to the €44 million in the same period of 2014. The positive variation was mainly consequence of the recovery of European markets and the consequent yield compression, mainly in Portugal and Spain, and the positive impact of the sale of Shopping Centre Zubiarte (Spain) and Torre Ocidente (Portugal).
In operational terms, tenant sales in the European portfolio recorded a 2.5% like-for-like increase in 2015, compared to the same period of 2014, with emphasis on the growth of 3.5% in Portugal and 5.3% in Italy. This performance is the result of the market recovery in general and the quality of our shopping centres as compelling retail destinations. Brazil maintained a positive performance with a 2.2% (BRL) increase in tenant sales, also compared to the same period of 2014, despite the current economic crisis, influenced by the country's political instability.
The Global Occupancy Rate of the portfolio was 95.2%, slightly below the 95.5% recorded in the same period of last year, although reaching 96% in the European portfolio. Sonae Sierra's global portfolio welcomed more than 430 million visits in 2015.
According to Fernando Guedes Oliveira, CEO of Sonae Sierra, "2015 was a year marked by highly improved operational results and by the consolidation of our financial performance. In terms of new project development, it was a year of opportunities to grow our business, with the announcement of our first investment in the Colombian market and significant progress in relevant developments in Romania and Morocco. In 2016, we will seek to consolidate our presence in North Africa and other emerging markets, maintaining our focus on the capital light approach and third party service provision".
Sonae Sierra continues its strategy of greater exposure to new development opportunities, asset valuation and third party professional services.
Our investment in projects under development has doubled, with the advances of ParkLake (Romania), Cucuta (Colombia), Zenata (Morocco), Malaga Designer Outlet (Spain) and the expansion of NorteShopping (Portugal).
The development of ParkLake, a €180 million investment in 70,000 m2 of Gross Lettable Area (GLA), proceeds at good pace and 93% of its commercial area is already let and/or committed. Its financing contract was signed in the third quarter of 2015, and the Centre's inauguration is scheduled for September 2016.
Sonae Sierra announced in 2015 its first investment in Colombia, through the acquisition of a site in Cucuta, where a new shopping centre with 45,000m2 of GLA will be built, in a €47 million investment scheduled to be inaugurated in 2017.
We also highlight the development of Shopping Centre Zenata (Morocco), a €100 million investment in more than 250 shops with a GLA of 90,000 m2 and Malaga Designer Outlet (Spain), a €115 million investment in 30,000 m2 of GLA, two projects scheduled to open in 2017.
In the professional services area, 24 development contracts were signed with clients in 11 geographies, namely in Italy, Russia, Turkey and Tunisia, where the Company celebrated its first contract.
We also signed a total of 13 service contracts for the property management and leasing of shopping centres for third parties, of which we stand out the start of service provision in seven shopping centres in Germany, Romania, Spain and Turkey.
We would like to emphasize the agreement signed with Generali Real Estate for the provision of development, property management and leasing services for CityLife Shopping District, a unique, innovative and premium retail destination in Milan, Italy.
Sonae Sierra calculates its NAV (Net Asset Value) according to the guidelines published in 2007 by the INREV (European Association for Investors in Non-Listed Real Estate Vehicles).
On the basis of this methodology, the NAV of Sonae Sierra, as of 31 December 2015, was €1.180 million an increase of 6% compared to 2014. The NAV increase results mainly from the increased Net Profit, despite the strong adverse exchange rate of the Brazilian Real (in the year-end, the Real depreciated by 25%).
| Net Asset Value (NAV) amounts in € m |
31 Dec 15 | 31 Dec 14 | |
|---|---|---|---|
| NAV as per the financial statements | 938.3 | 898.0 | |
| Revaluation to fair value of developments | 3.0 | 4.1 | |
| Deferred tax for properties | 238.1 | 213.2 | |
| Goodwill related to deferred tax | -14.3 | -14.3 | |
| Gross-up of Assets | 14.7 | 13.8 | |
| NAV | 1,179.8 | 1,114.7 | |
| NAV per share (in €) | 36.29 | 34.29 |
The Company maintained its conservative and balanced long-term funding and hedged debt strategy. The capital structure is supported by an average debt maturity of 4.2 years, 39% of which with fixed interest costs.
The following chart illustrates Sonae Sierra's debt as at 31 December 2015.
In 2015, Sonae Sierra refinanced the debt of four Shopping Centres in a total of €210 million and, as previously mentioned, closed the financing agreement for ParkLake (Romania), which reflects the trust of national and international banks in the management and solidity of the Company and its assets.
Sonae Sierra's weighted average cost of debt as at 31 December 2015 stands at 4.1%, 10 basis points below the end of the previous year. Excluding Brazil, the weighted average cost of debt is 3.2%.
The financial ratios show a prudent and solid approach and the financial strength of the Company's balance.
| Ratios | 31 Dec 15 | 31 Dec 14 |
|---|---|---|
| I TV | 39.5% | 41.5% |
| Interest cover | 3.O | 2.4 |
| Consolidated Profit and Loss Account (€ million) |
2015 | 2014 | % 15/14 |
|---|---|---|---|
| Direct income from properties | 154.7 | 157.7 | -2% |
| Direct costs from properties | 55.7 | 56.5 | -2% |
| EBIT from properties | 99.0 | 101.1 | -2% |
| Services rendered | 70.9 | 68.0 | 4% |
| Direct costs from services | 64.8 | 63.0 | 3% |
| EBIT from services | 6.1 | 5.0 | 21% |
| Net financial costs | 31.0 | 40.5 | -23% |
| Direct profit before taxes | 74.1 | 65.6 | 13% |
| Current tax | 13.1 | 12.9 | 1% |
| Direct net profit | 61.0 | 52.7 | 16% |
| Gains on sale of investments | 2.6 | 3.4 | -24% |
| Value created in investments | 109.1 | 89.4 | 22% |
| Impairment | 2.1 | -24.0 | 109% |
| Deferred tax | 33.1 | 25.1 | 32% |
| Indirect net profit | 80.7 | 43.6 | 85% |
| Net profit | 141.7 | 96.3 | 47% |
| Consolidated Balance Sheet (€ million) |
31 Dec 15 | 31 Dec 14 | Var. (15 - 14) |
|---|---|---|---|
| Investment properties | 2,007.5 | 2,016.3 | -9 |
| Properties under development | 120.3 | 63.5 | 57 |
| Other assets | 101.3 | 105.4 | -4 |
| Cash & Equivalents | 70.6 | 97.4 | -27 |
| Total assets | 2,299.7 | 2,282.6 | 17 |
| Net worth | 938.3 | 898.0 | 40 |
| Bank loans | 904.5 | 953.8 | -49 |
| Deferred taxes | 286.1 | 271.5 | 15 |
| Other liabilities | 170.7 | 159.2 | 11 |
| Total liabilities | 1,361.3 | 1,384.6 | -23 |
| Net worth and liabilities | 2,299.7 | 2,282.6 | 17 |
Sonae Sierra, www.sonaesierra.com, is the international shopping centre specialist, with a passion for creating innovative shopping experiences. The Company is present in 11 countries on 3 continents: Portugal, Algeria, Brazil, Colombia, Germany, Greece, Italy, Morocco, Romania, Spain and Turkey, and is also present in other geographies through service provision. Sonae Sierra owns 45 shopping centres with a market value of €6 billion euros, and manages and/or lets 80 Shopping Centres with a Gross Lettable Area of 2.3 million m2 and about 9,000 tenants. In 2015, the Company welcomed more than 430 million visits in the shopping centres it manages. Currently, Sonae Sierra has 11 projects under development, including 4 for clients, and 7 new projects in pipeline.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.