Real estate group DEMIRE AG closes abbreviated fiscal year ended December 31, 2014 with a jump in earnings
- EBIT increases by EUR 64 million to EUR 58.4 million
- Net profit for the period: EUR 45.7 million (previous year: EUR -6.0 million)
- Basic earnings per share: EUR 3.03 (previous year: EUR -0.43)
- Total assets rise to EUR 373.0 million (previous year: EUR 48.4 million)
- Portfolio with more than 350,000 m² (December 31, 2014) of rentable space expected to significantly expand in 2015
- Today’s total portfolio space more than 610,000 m²
- Annual rental income to be main revenue source in 2015
Frankfurt/Main, 5 June 2015 – DEMIRE Deutsche Mittelstand Real Estate AG’s (“DEMIRE”, ISIN DE000A0XFSF0) financial statements for the 2014 abbreviated fiscal year (April 1 to December 31, 2014) (according to IFRS) published today were greatly impacted by strong growth resulting from the creation of a large commercial real estate portfolio in Germany. In 2014, DEMIRE created a commercial real estate portfolio with total rentable space of more than 350,000 m², clearly exceeding its internal targets. Annual net rental income excluding utilities of the properties held in 2014 amounted to approximately EUR 25.4 million. Accordingly, the Group’s key financial ratios for the abbreviated fiscal year from April 1 to December 31, 2014, show a positive development.
The EBIT of EUR 58.4 million (previous year: EUR -5.6 million) was largely the result of rental income and, especially, fair value adjustments of investment properties. Accordingly, net profit for the period as at December 31, 2014, improved by EUR 51.7 million to EUR 45.7 million. Basic and diluted earnings per share as at the balance sheet date amounted to EUR 3.03 after EUR -0.43 as at March 31, 2014, and EUR 1.74 after EUR -0.43, respectively.
DEMIRE AG’s total assets rose more than sevenfold to EUR 373.0 million as at December 31, 2014 (March 31, 2014: EUR 48.4 million). The strong increase was mainly the result of the Group’s acquisition related growth.
DEMIRE’s share price clearly outperformed the overall market and the respective indices during the abbreviated fiscal year as a result of the positive business performance. Over the course of the year 2014, the share price rose 130% to EUR 1.80. The share’s outperformance also continued in the current 2015 fiscal year. The share price almost reached EUR 6 and the market capitalisation exceeded the EUR 100 million threshold at the end of April 2015.
The outlook for the 2015 fiscal year remains positive. Rental income from real estate holdings in 2014 will make a contribution to our earnings for a full calendar year for the first time. Additionally, DEMIRE closed three promising transactions in the first months of the current fiscal year. With Logistikpark Leipzig, this includes for the first time a logistics property. With the 184,000 m² of rentable space of the former logistics complex of Quelle, the DEMIRE portfolio reaches a ratio of roughly 70% office space and 30% logistics space. DEMIRE also acquired a property in Schwerin and the Gutenberg-Galerie in Leipzig in 2015.
Newly acquired properties in 2015 as well as additional planned purchases will lead to a strong rise in rental income compared to December 31, 2014. Following the acquisition since the beginning 2015, rentable space currently totals more than 610,000 m² with contractual annual net rental income excluding utilities of around EUR 32.8 million.
DEMIRE plans to continue rapidly expanding the portfolio in the months to come of the 2015 fiscal year. The objective is to the double the size of the portfolio in the 2015 fiscal year compared to 31 December 2014.
The specialist in commercial real estate considers itself well positioned for a further expansion in holdings in terms of the investment funds necessary in view of the capital actions already resolved. The real estate group has sufficient equity and authorisations for the issue of conditional capital for the further expansion of the portfolio. In March, the Company also increased a bond by EUR 50 million to EUR 100 million. In addition, these shares are used as a means of payment for property purchases. DEMIRE AG also utilises property-related financing from a variety of banks.
In addition to the portfolio’s expansion, the focus in the past few months has been on the structural development of the real estate group. Above all, this development involved an expansion of the existing group and management structures. For the optimal management of the commercial real estate portfolio, DEMIRE has built effective in-house asset, property and facility management operations since the beginning of 2015 through the acquisition and investment in three companies.
Andreas Steyer, Speaker of the Executive Board of DEMIRE: “With the rapid expansion of our real estate portfolio in Germany we were well above target in 2014 and were able to seamlessly continue the performance in the current fiscal year. This year, we have set ourselves the goal of almost doubling our portfolio and we are extremely confident that we will reach this goal”.
Markus Drews, member of the DEMIRE Executive Board: “The income from rentals is evolving into a substantial revenue stream for DEMIRE for the first time. This is mainly due to the portfolio expansion, but should improve again significantly more through the efficient management of our properties. With the creation of new corporate structures and the resulting representation of all real estate related activities within the Group, we can now more effectively manage properties, which promises – above all – the further optimisation and development of our portfolio particularly with regard to the reduction of vacancy rates, rental rate adjustments and improvements in services”.
The Company’s 2014 financial statements and the 2014 consolidated financial statements, both approved by the Supervisory Board, are available for download on the Company’s website under www.demire.ag within the 2014 separate financial statements and the 2014 Annual Report.
The Executive Board