DEMIRE Increases FFO by 40% during H1 2019 - Guidance to Rental Income and FFO I Raised

- Further acquisitions bring portfolio up to EUR 1.4 billion

- Value appreciation of the portfolio of EUR 29.1 million

- Rental income rises to EUR 38.2 million (H1 2018: EUR 36.6 million)

- FFO I (after tax, before minority interests) increases to EUR 15.9 million (H1 2018: EUR 11.4 million)

- Guidance for 2019 raised: EUR 80.5 to 82.5 million in rent revenues and EUR 30 to 32 million in FFO I

Langen, 14 August 2019 - DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) successfully concluded the first half-year of 2019 while also having expanded its portfolio. Following the acquisition of an office portfolio and a department store portfolio, the holdings of the DEMIRE Group comprised a total of 92 commercial properties (31 December 2018: 84 properties). The lettable area now totals around 1,086,000 square metres. The market value of the portfolio was increased not just by the acquisitions but also through the appreciation of the portfolio properties by EUR 29.1 million to c. EUR 1.4 billion (31 December 2018: EUR 1.1 billion).

The rental income of the DEMIRE Group totalled EUR 38.2 million in the first half-year of 2019 (H1 2018: EUR 36.6 million). The increase is attributable, on the one hand, to successful lettings and rent increases and, on the other hand, to the fact that the top line was widened by the recently completed acquisitions. Profit from rental of real estate rose to EUR 32.0 million during the reporting period and is thus considerably higher than the corresponding prior-year period (H1 2018: EUR 28.1 million).

By mid-year 2019, the letting performance equalled 126,935 square metres, clearly topping the full year total of 2018 (82,559 square metres) already. That the EPRA vacancy rate rose to 11.1 % by 30 June 2019 (31 December 2018: 7.5 %), as had been expected, is explained primarily by the acquisition of an office portfolio with value-add components as of 01 May 2019.

Another Massive Increase in FFO I

The funds from operations (FFO I, after tax, before minority interests) increased by 40 % compared to the first six months of the previous year to EUR 15.9 million. This is essentially due to the consistent implementation of the "REALize Potential" strategy and the improved performance of all business units as a result of it. A case in point is the 13.9 % growth in profit from rental of real estate.

Balance Sheet Ratios Reflect Robust Funding Structure

The balance sheet ratios as of 30 June 2019 show a solid funding structure and at the same time reflect the transfer of possession of the four office buildings on 01 May 2019. The total assets of the DEMIRE AG Group grew to c. EUR 1,501 million as of 30 June 2019. The equity ratio stood at 41.0 % by the reporting date. The (undiluted) EPRA NAV rose to EUR 5.87 per share as of the balance sheet date (31 December 2018: EUR 5.52 per share). Compared to year-end 2018 (38.7 %), the net debt-to-equity ratio (net loan to value) moved closer toward the target mark of 50 % at 44.3 % by 30 June 2019.

Ingo Hartlief, CEO of DEMIRE AG, commented: "The positive trend during the first six months exceeded our expectations and encouraged us to keep pursuing the strategic goals of our "REALize Potential" as consistently as we have been doing. Our efforts to boost the portfolio through new acquisitions is combined with our successful lease management of portfolio properties and sales to enable us to maintain our positive key ratios in the coming months."

Management Raises Guidance for Rental Income and FFO I for 2019

Buoyed by the successful first half-year, the Management expects an even better performance of the key ratios and raises full year guidance on rental income and FFO I. Rental income guidance is raised to EUR 80.5 to 82.5 million for 2019 (previously: EUR 77 to 79 million) and guidance of FFO I (after taxes and before minority interests) is increased to EUR 30 and 32 million (previously: EUR 27 to 29 million) for 2019.

The half-year financial report of 2019 is available for download in the Investor Relations section of the company's home page www.demire.ag under the following address: www.demire.ag/investor-relations/berichte-und-ergebnisse/2019

 

Invitation to a Conference Call on 14 August 2019

The Management Board of DEMIRE invites all interested parties to attend the presentation of the financial statement for H1 2019 during a conference call on 14 August 2019 at 10:00 CET.

To dial in, please use the following phone numbers:

Germany: +49 (0)69 2222 25574
United Kingdom: +44 (0)330 336 9125
United States: +1 929 477 0324
France: +33 (0)1 70 72 25 50
Switzerland: +41 (0)44 580 7206

PIN: 2318549

The presentation of the quarterly financial report will also streamed as a live webcast. Please use the link webcasts.eqs.com/demire20190814/no-audio

For the audio transmission, please use the dial-in numbers listed above. Shortly before the start of the conference call, a presentation of the financial figures will become available on our homepage www.demire.ag/investor-relations for downloading.

 

Selected Key Performance Indicators of the Group DEMIRE Deutsche Mittelstand Real Estate AG

 

	01/01/2019 - 30/06/2019	01/01/2018 - 30/06/2018
Consolidated income statement (in EURm)
Rental income	38.2	36.6
Profit from the rental of real estate	32.0	28.1
Fair-value adjustments on investment properties	29.1	70.1
General administrative overhead and other operating expenses	6.1	13.9
EBIT	54.9	84.3
Financial results	-14.0	-21.9
Profit/loss for the period after tax	34.2	44.7
- thereof attributable to shareholders of the parent company	31.8	39.5
FFO I (after tax, before minority interests)	15.9	11.4
FFO II (after tax, before minority interests)	15.8	11.4
Basic/diluted earnings per share (in EUR)	0.29/0.29	0.66/0.65
Consolidated accounts (in EURm)	30/06/2019	31/12/2018
Total assets	1,501	1,379
Investment property	1,314	1,140
Cash and cash equivalents	130.8	190.4
Properties held for sale	12.3	12.3
Shareholders' equity (incl. non-controlling shareholders)	616.1	582.3
Equity ratio (in % of total assets)	41.0	42.2
Basic/diluted EPRA-NAV	632.2/632.7	595.2/595.7
EPRA-NAV per share (EUR, basic/diluted)	5.87/5.85	5.52/5.50
Net financial liabilities	588.3	446.1
Net debt-to-equity ratio (net LTV), in %	44.3	38.7
Portfolio key ratios	30/06/2019	31/12/2018
Properties (number)	87	84
Market value (in EURm)	1,326.5	1,152.1
Annualised base rents (in EURm)	82.1	73.2
Rental yield (in %)	6.2	6.5
EPRA vacancy rate (in %) *	11.1	7.5
WALT (in years)	4.2	4.5

 

* Properties held exclusively for sale

 

About DEMIRE Deutsche Mittelstand Real Estate AG

DEMIRE - REALize Potential

DEMIRE Deutsche Mittelstand Real Estate AG has commercial real estate holdings in mid-sized cities and up-and-coming locations bordering German metropolitan areas. The company's specific forte is its focus on these second-tier cities and on a range of assets that appeals to both internationally active and regionally rooted tenants. DEMIRE holds a portfolio with a combined lettable area of around 1.1 million sqm and a fair market value of more than EUR 1.4 billion today.

The portfolio focus on office, retail and logistics assets results in exactly the kind of risk/return structure that DEMIRE considers appropriate for the business line of commercial real estate. The Company puts a premium on long-term contracts with solvent tenants in anticipation of stable and sustainable rent revenues. DEMIRE has set itself the goal to keep optimising its corporate structure. To this end, it pursues an active property management approach, convinced that it is the best way to achieve economies of scale and portfolio optimisations.
DEMIRE Deutsche Mittelstand Real Estate AG shares (ISIN: DE000A0XFSF0) are listed in the Prime Standard segment of the Frankfurt Stock Exchange.

Contact:
Michael Tegeder
Head of Investor Relations & Corporate Finance
DEMIRE Deutsche Mittelstand Real Estate AG
Telefon: +49 6103 372 4944
Email: tegeder@demire.ag