DEMIRE: Successful 2015 fiscal year
- Real estate holdings nearly triple in 2015
- Increase in rental income and profit
- EBIT stable at EUR 58.7 million
- NAV per share rises 9.9%
- LTV substantially improved to 67.0%
Frankfurt/Main, 29. April 2016 – Frankfurt/Main, 29 April 2016 – DEMIRE Deutsche Mittelstand Real Estate AG (DEMIRE, ISIN DE000A0XFSF0) generated significant growth in the 2015 fiscal year driven by several property and portfolio purchases and the acquisition of a majority interest in Fair Value REIT-AG. As at the reporting date, the Company held 181 commercial properties with total rentable space of 1.1 million m² and a market value of roughly EUR 930 million, representing nearly a threefold increase over the previous year.
“In 2015, we transformed DEMIRE into one of the leading listed holders of German commercial real estate”, said Hon.-Prof. Andreas Steyer, CEO of DEMIRE, in his comments summarising the 2015 fiscal year. “The effects of the acquisitions are fully reflected in the balance sheet whereas, in the income statement, only the expenses related to the acquisitions are fully recognised. The income relating to the acquisitions, however, is only included on a pro rata basis. Or as in the case of Fair Value REIT-AG, the largest single acquisition of the year, it is not recognised at all, because the acquisition of the majority interests only occurred at the end of the year. Therefore, DEMIRE’s true earnings power is not fully reflected in the figures for 2015.”
Rental income and profit increase strongly
According to the completed, but not yet testified annual financial statements, the DEMIRE Group generated rental income of EUR 43.3 million in the 2015 fiscal year. This not only represents a more than tenfold increase over the level generated in the abbreviated 2014 fiscal year (April to December) but is also around EUR 10 million higher than the forecast published in the 2014 Annual Report.
The profit from the rental of real estate amounted to EUR 23.7 million, which also represented a tenfold increase in comparison to the abbreviated 2014 fiscal year (EUR 2.3 million). This rise resulted from rents related to the properties acquired in 2014 coming in for a full year for the first time. In addition, the portfolio expanded step by step with each new acquisition in the course of 2015. These new holdings made a corresponding pro rata contribution to rental income.
Other operating income, which are mainly composed by first-time consolidation effects of the properties and investments acquired and by fair values adjustments of investment properties, came to a total of EUR 52.5 million in 2015 (Previous year EUR 63.7 million). General and administrative expenses amounted to EUR 11.3 million and were significantly higher than the prior year’s level of EUR 3.6 million due to the considerable rise in legal and consulting expenses related to the numerous acquisitions and also due to growth-related rises in staff costs. After consideration of other income and expenses, earnings before interest and taxes (EBIT) were just slightly higher at EUR 58.7 million compared to the abbreviated 2014 fiscal year (EUR 58.4 million).
The financial result amounted to an expense of EUR 25.7 million after EUR 2.9 million in the previous year. The rise in net interest expenses corresponds to the rise in revenue in the past fiscal year and reflects the higher financial expenses associated with the expansion in real estate holdings.
The net profit for the period totalled EUR 28.9 million following EUR 45.7 million in the previous year of which EUR 28.1 million were attributable to DEMIRE AG shareholders compared to EUR 43.3 million in the previous year.
Equity ratio improved
Total assets increased 275 percent year-on-year to EUR 1.0 billion as a result of the acquisition-led growth. Investment properties, real estate inventory and properties available for sale comprise the largest single asset position amounting to a total of EUR 930.4 million. One-third of this amount originates from the takeover of Fair Value REIT-AG.
Equity increased nearly fivefold mainly as a result of several capital measures carried out during the reporting period and totalled EUR 264.9 million (previous year: EUR 54.6 million). This led to a significant year-on-year improvement in the equity ratio from 14.6 percent in the prior year to 25.6 percent in the reporting year.
NAV per share increases
After deducting the interests of non-controlling shareholders, equity amounted to EUR 230.7 million compared to EUR 51.7 million at the end of the previous year. This is equivalent to an NAV per share of EUR 4.68, or 9.9 percent higher than at the end of the prior year (EUR 4.26).
Substantial improvement in LTV
Because the majority of the acquisitions in 2015 were completed based on equity, the ratio of net debt to the carrying amount of properties (Loan-to-Value, or LTV) improved substantially to 67.0 percent (previous year: 85.6 percent).
“We achieved all our key strategic goals in 2015”, said Andreas Steyer. “We were successful in expanding and significantly increased our business volume. At the same time we absorbed the acquisition related costs and aid the groundwork for a significant increase in our operating results (FFO) in 2016 which we expect to only slightly fall short of EUR 20 million before non controlling interests. This should correspond to EUR 15 million after non controlling interests or FFO per share of EUR 0,30.”
The publication of the testified results and the full 2015 Annual Report is scheduled for mid-May 2016.
Selected Group key financials of DEMIRE Deutsche Mittelstand Real Estate AG
|In EUR million||2015||2014 (01/04 – 31/12)|
|Consolidated income statement|
|Other operating income||52.5||63.7|
|General and administrative expenses||11.3||3.6|
|Net profit for the period||28.9||45.7|
|Of which, attributable to DEMIRE shareholders||28.1||43.3|
|Basic/diluted earnings per share||0.95/0.65||3.03/1.74|
|Consolidated balance sheet||31.12.2015||31.12.2014|
|Real estate inventory and properties available for sale||15.3||7.4|
|Equity ratio (in % of total assets)||25.6||14.6|
|Net asset value (NAV) attributable to DEMIRE shareholder||230.7||51.7|
|NAV per share (EUR)||4.68||4.26|
|LTV (Net debt in % of real estate holdings)||67.0||85.8|