DEMIRE: 2015 grown to a new dimension
- Real estate holdings nearly triple in 2015
- Profit from the rental of real estate rises tenfold
- Earnings affected by acquisition costs
- Substantial improvement in LTV, EPRA NAV significantly higher
- Positive outlook for 2016
Frankfurt am Main, 19. May 2016 – DEMIRE Deutsche Mittelstand Real Estate AG today published its complete and audited financial statements for the 2015 fiscal year. 2015 was a year dominated by growth – in part through direct investments in individual properties and commercial real estate portfolios, in part through the acquisition of a majority interest in Fair Value REIT-AG. These investments almost tripled the value of the real estate portfolio to a total of EUR 928.1 million (previous year: EUR 333.1 million).
Profit from the rental of real estate rises tenfold
The new properties contributed to income in 2015 from the respective date of their acquisition. Fair Value REIT-AG, however, could not yet contribute because it was acquired at the year’s end. This means the surge in growth is fully reflected in the balance sheet but not yet in the income statement. Still, profits from the rental of real estate experienced a tenfold increase over the prior year and reached EUR 23.7 million (previous year: EUR 3.8 million).
Earnings affected by acquisition costs
Due to the numerous acquisitions, an unusually high amount of expenses were incurred in 2015 for consulting services, accounting and auditing expenses, two Extraordinary General Meetings and banking services related to designated sponsoring. Therefore, earnings before interest and taxes (EBIT) of EUR 58.7 million was only slightly above the previous year’s level (EUR 58.4 million).
The financial result ended the year at an expense of EUR 25.7 million (previous year: expense of EUR 2.3 million) reflecting the higher interest expenses from the increase in financial liabilities related to the acquisitions. This led to a net profit for the period of EUR 28.9 million, or well short of the previous year’s level of EUR 45.7 million.
“In 2015, growth clearly took priority over income,” said Hon. Andreas Steyer, CEO of DEMIRE Deutsche Mittelstand Real Estate AG. “This will certainly change in the future now that DEMIRE’s property holdings have reached a sum of contracted annual net rental income, excluding utilities, of EUR 72 million at the end of 2015 – a roughly eighteenfold increase over the level of net rental income in 2014. There is no better illustration of the new dimension our Company has grown into in 2015. We are now one of the leading listed companies in our industry in terms of revenue and portfolio value”.
Substantial improvement in LTV
DEMIRE completed the acquisitions in 2015 largely by issuing new shares. This brought down the ratio of net debt to the value of the real estate portfolio from 87.4 percent in 2014 to 67.5 percent in 2015.
EPRA NAV significantly higher
Because new shares were used as an acquisition currency to a significant extent, the equity ratio improved to 25.6 percent (previous year: 14.6 percent). The basic net asset value (NAV), calculated according to the recommendations of the European Public Real Estate Association (EPRA), increased more than fourfold to EUR 256.3 million (previous year: EUR 61.0 million) and on a per share basis by a solid 20 percent to EUR 5.20 (previous year: EUR 4.26).
Positive outlook for 2016
In the first three months of the current fiscal year, DEMIRE continued to expand its commercial real estate portfolio through its acquisition of Kurfürsten Galerie in Kassel. Since all of the properties acquired in 2015 will contribute for a full twelve months for the first time in the current fiscal year, DEMIRE anticipates 2016 rental income in the order of EUR 75 million and expects profits (funds from operations) adjusted for valuation and exceptional items and before the interests of minority shareholders to reach just under EUR 20 million.
The 2015 Annual Report with the complete IFRS consolidated financial statements for DEMIRE AG and the annual financial statements according to the German Commercial Code (HGB) are available on the company’s website at www.demire.ag under the Investor Relations section.
DEMIRE Group key financial figures
|Consolidated income statement|
|01/01/2015 – 31/12/2015||01/04/2014 – 31/12/2014|
|Profit/loss from the rental of real estate||23,680||2,290|
|Net profit/loss for the period||28,873||45,707|
|Net profit/loss for the period per share (basic) in euro||1.09||3.03|
|Consolidated balance sheet|
|Non-current assets held for sale||13,005||0|
|Total core portfolio||928,094||333,070|
|Cash and cash equivalents||28,467||4,397|
|Net financial debt||626,772||291,268|
|In % of core portfolio (LTV)||67.5||87.4|
|Equity in consolidated balance sheet||264,902||54,629|
|Equity ratio in %||25.6||14.6|
|Equity attributable to parent company shareholders (NAV)||230,697||51,684|
|EPRA NAV (basic)||256,267||60,996|
|EPRA NAV per share (basic) in euro||5.20||4.26|
|EPRA NAV (diluted)||271,585||71,420|
|EPRA NAV per share (diluted) in euro||4.25||2.84|