– Vacancy reduction is proceeding, year-end target of vacancy rate reduction to around 13 per cent will be realised
– FFO with EUR 29.8 million well on track, target 2011 confirmed
– Profit for the period of EUR 8.1 million according to plan
– With acquisitions in excess of EUR 280 million, DIC Asset AG has already fulfilled its full-year target
Frankfurt, 15 November 2011 – DIC Asset AG (German Securities ID 509840 / ISIN DE0005098404) today presented its interim report for the first nine months of the 2011 financial year. The Company once again generated very stable results, on the basis of the significantly smaller portfolio volume (as a result of sales, and the contribution of properties to the investment fund in 2010). For the full year 2011, the Company is expecting to achieve all of the objectives set out at the beginning of the year.
Detailed review of the nine-month report:
DIC Asset AG“s gross rental income for the first nine months of 2011 amounted to EUR 85.8 million (9m 2010: EUR 95.7 million). The 10 per cent decline was largely attributable to the reduced portfolio size following disposals, and placement of the investment fund. Gross rental income of EUR 29.3 million in the third quarter exceeded the results of the two previous quarters (Q1 2011: EUR 27.6 million, Q2 2011: EUR 28.9 million). Net rental income in the third quarter amounted to EUR 26.6 million and therefore significantly exceeded the first quarter (Q1 2011: EUR 25.3 million) and matched nearly the second quarter (Q2 2011: EUR 26.9 million). At EUR 78.8 million, net rental income in the first nine months of 2011 was down 10 per cent year-on-year (9m 2010: EUR 87.3 million).
In a somewhat improved rental market, DIC Asset AG increased its total rental volume by four per cent. New rental contracts or renewals were concluded for portfolio properties with an aggregate floor space of 201,800 sqm (9m 2010: 193,900 sqm). This means that 80 per cent of the year-end target volume has been reached already. This is a good result generated by a portfolio that has been reduced significantly by disposals. The bulk of this increase was attributable to new rentals: up 10 per cent to 86.300 sqm, these were clearly higher than in the previous year. At 115,500 sqm, follow-up rentals were exactly in line with the high level achieved for the same period of the previous year. Total new rentals were equivalent to annualised rental income of EUR 19.5 million, which was down only slightly on the previous year’s level (9m 2010: EUR 20.5 million). Based on the strong letting result, the occupancy rate rose by 0.8 percentage points since the start of the year, to 86.5 per cent (85.7 per cent as at 31 December 2010). Together with the already accomplished rentals the occupancy rate will be raised to about 87 per cent by the end of the year. Like-for-like rental income was also positive and substantially up year-on-year, with an increase of 0.7 per cent (9m 2010: 0.0 per cent). For the full year 2011, the Company is expecting an improvement by 1-1.5 per cent.
The volume of acquisitions totalled more than EUR 280 million: the planned growth target for 2011 was thus already reached in October. The volume of disposals amounted to EUR 56.1 million as at the end of September – also within the scope of DIC Asset AG’s planning, which is targeting full-year sales of EUR 80 million to EUR 100 million.
DIC Asset AG has a sound financial position. As at 30 September 2011, the Company posted a net interest result of EUR -41.0 million, which was down a sizeable EUR 8.4 million (+17 per cent) on the previous year. This reduction was due to lower financing volumes (reflecting asset sales), the optimisation of interest expenses, and to higher cash and cash equivalents – generating the corresponding interest income – as a result of the two capital measures carried out during the first half of the year. Accordingly, the average interest rate declined to 4.45 per cent (9m 2010: 4.5 per cent).
With an average term of around 3.4 years, most of the Company“s EUR 1.42 billion financial debt is medium to long-term, of which 13 per cent will need to be refinanced over the next 12 months.
Staff expenses remained stable in the first three quarters at EUR 7.1 million, while administrative expenses rose marginally by EUR 0.3 million to EUR 6.2 million. This was offset by EUR 3.6 million in real estate management income, up 50 per cent year-on-year (9m 2010: EUR 2.4 million).
As expected, operating profit before depreciation and amortisation (EBDA) of EUR 29.7 million was 10 per cent lower than the EUR 33.1 million figure posted for the first nine months of the previous year. In line with expectations, profit for the period of EUR 8.1 million (9m 2010: EUR 9.5 million) fell short of last year’s figure; this was largely the result of the smaller portfolio and reduced sales activities as compared to the previous year as well as profits from associates no longer being recognised, as planned. The figure equates to earnings per share of EUR 0.18 (9m 2010: EUR 0.25).
At EUR 29.8 million, the FFO (funds from operations, defined as earnings before depreciation, interest and taxes, and excluding profits from disposals and development projects) for the first nine months of 2011 was down on the previous year (9m 2010: EUR 33.1 million). The decline is based above all on the reduced portfolio with the corresponding lower rental income. The FFO per share amounted to EUR 0.68 (9m 2010: EUR 0.88).
Cash flow from operating activities (after interest and taxes paid) rose notably by 15 per cent, from EUR 27.9 million in the previous year to EUR 32.1 million. This reflected the notable contribution of lower interest payments. Cash and cash equivalents as at 30 September 2011 was up from approximately EUR 77.7 million the previous year to in excess of EUR 117.8 million.
Real estate assets under management currently amount to approx. EUR 3.3 billion (31 December 2010: approx. EUR 3.1 billion). The equity ratio (as reported on the balance sheet) stood at 29.2 per cent as at 30 September 2011 (31 December 2010: 28.6 per cent).
Guidance and outlook for 2011: The real estate business has not been disrupted to date, despite the sovereign debt crisis and nervousness on financial markets. DIC Asset AG strengthens its FFO forecast of EUR 40 million to EUR 42 million for the 2011 financial year. This is based on expected rental incomes at the upper end of the EUR 112 million to EUR 115 million range for the full-year 2011, predicated on an occupancy rate of 87 per cent plus the acquisitions already becoming effective in 2011. The company has sufficient financial resources to face weaker economic development in 2012. DIC Asset AG has the necessary funds to take advantage of selective growth opportunities and to retain its financial flexibility.
Ulrich Höller, Chairman of the Management Board of DIC Asset AG, said that „We anticipate that by the end of the year we will reach all of our goals announced for 2011. We therefore once again represent a reliable and profitable investment for our shareholders.“
For more information on DIC Asset AG, please visit the Company’s website www.dic-asset.de, where the nine-month report for 2011 is also available.
About DIC Asset AG:
Established in 2002, DIC Asset AG, with registered offices in Frankfurt/Main, is a real estate company with a dedicated investment focus on commercial real estate in Germany, pursuing a return-oriented investment policy. Real estate assets under management currently amount to approx. EUR 3.3 billion, comprising around 280 properties. The portfolio is divided into three segments: the ‚Core plus‘ portfolio includes the proprietary portfolio held on a long-term basis and offering stable, attractive rental yields. The ‚Value-added‘ portfolio contains real estate with promising performance potential over the medium term. The ‚Co-investments‘ segment portfolio comprises minority stakes in supplementary real estate sectors, including opportunistic investments, project development as well as the Funds business area, where we invest in core real estate. DIC Asset AG has been included in the SDAX® segment of the Frankfurt Stock Exchange since June 2006. The Company’s shares are also included in the EPRA index, which tracks the performance of the most important European real estate companies.
DIC Asset AG
Immo von Homeyer
Eschersheimer Landstrasse 223
60320 Frankfurt/Main
+49 69 274033-86
www.dic-asset.de
i.vonhomeyer@dic-asset.de
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