DEMIRE improves all key ratios in the first nine months of 2015
- Rental income: EUR 28.1 million (previous year: EUR 1.5 million)
- EBIT: EUR 26.5 million (EUR -0.4 million)
- Equity: +115.3 percent to EUR 117.6 million
- Equity ratio +9.4 percent to 24.0 percent
- NAV increases to EUR 122.2 million and NAV per share rises to EUR 4.47 (Q2 2015: EUR 4.23)
- Real estate portfolio likely to reach EUR 1 billion by the end of the year
- Further expansion of real estate portfolio planned in 2016
Frankfurt, 30 November 2015 – DEMIRE Deutsche Mittelstand Real Estate AG (“DEMIRE”, ISIN DE000A0XFSF0) significantly improved all of its key financial ratios in the first nine months of 2015. Income from the rental of commercial space within the core portfolio evolved into the main source of income as planned increasing to EUR 28.1 million (previous year: EUR 1.5 million). Profit/loss from the rental of real estate climbed sharply by EUR 16.2 million to EUR 17.5 million (previous year: EUR 1.3 million). Other operating income, which includes fair value adjustments on investment properties in the amount of EUR 16.4 million (previous year: EUR 2.9 million) rose to EUR 17.8 This million after their level of EUR 4.6 million in the previous year’s comparable period. Earnings before interest and taxes (EBIT) went from a negative EUR -0.4 million in the previous year’s comparable period to a positive EUR 26.5 million in the first nine months of 2015. Net of financial expenses and taxes, the profit/loss for the period totalled EUR 2.6 million (previous year: EUR 3k. This is the equivalent to basic earnings per share of EUR 0.07 (previous year: EUR 0.00) and diluted earnings per share of EUR 0.06 (previous year: EUR 0.00).
DEMIRE’s real estate portfolio now comprises roughly 175 properties with a gross asset value (GAV) of about EUR 638 million and total rental space of approximately 805,000 m². The year-end finalisation of the takeover of Fair Value REIT-AG, a company also focussed on Germany’s secondary commercial real estate locations, will increase the GAV to presumably EUR 1 billion.
The real estate group improved the profit/loss from the rental of real estate not only by means of acquisitions but also as a result of its active real estate management. The weighted average lease term was approximately 6 years as of the reporting date for the overall holdings. Rental income was also boosted by internal property management as, for example, in the case of the Logistikpark Leipzig purchase in only mid-2015.
In line with the expansion of DEMIRE’s portfolio, total assets as of September 30, 2015, increased by 31.5 percent to EUR 490.5 million in comparison to their level on December 31, 2014 (EUR 373.0 million). Equity also increased significantly by 115.3 percent to EUR 117.6 million following capital increases against cash and contribution in kind. The equity ratio advanced from 14.6 percent to 24.0 percent. As of September 30, 2015, the loan-to-value-ratio (LTV) amounted to 74 percent (December 31, 2014: 86 percent).
The conservative full-year 2015 forecast for rental income of approx. EUR 42 million an EBIT in the lower single-digit millions, excluding the fair value adjustments on real estate, was reconfirmed by the DEMIRE Executive Board. The finalisation of the Fair Value REIT-AG takeover expected and the end of the year and the company’s subsequent consolidation as a subsidiary, DEMIRE’s potential for acquisitions will expand and include indirect investments in closed-end funds next to direct investments, which should lead to a further expansion in the Company’s real estate holdings in the year 2016 as in 2015.
“The September 30, 2015 results confirm that all of our key balance sheet ratios are on the right track. In 2016, we want to continue with our expansion accompanied with an improvement in our key financial ratios and at the same time leverage the expertise of Fair Value REIT-AG,” explained DEMIRE CEO Hon.-Prof. Andreas as he commented on the Company’s promising outlook.
“Our active portfolio management through our asset, property and facility management activities, which were just started this year, has already yielded initial success. Through the future management of the Fair Value REIT-AG holdings as well as further acquisitions we will be able to generate significant economies of scale with this internal expertise. We are confident that we will be able to further optimise our portfolio in terms of its future development,” said Markus Drews, COO of DEMIRE, as he described the key strength of the commercial real estate specialist.
The Executive Board
DEMIRE Deutsche Mittelstand Real Estate AG
Lyoner Straße 32
60528 Frankfurt am Main
Phone: +49 (0) 69-719 189 79 0
Telefax: +49 (0) 69-719 189 79 11
Phone: +49 (0) 511 47 40 23 10