DEMIRE successfully starts the financial year and reaffirms forecast for 2018
- FFO I (after taxes, before minorities) of EUR 5.2 million more than doubled
(up 160 %)
- Net Loan-to-Value reduced to 58.1 %
- EPRA vacancy rate falls further 80 basis points to 8.6 %
- Forecast for 2018 confirmed, anticipated FFO I between EUR 16 and EUR 18 million
(up 160 %)
Langen, 30. May 2018 – DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) has continued its solid performance in the first quarter of 2018. Thanks to successful letting activities and the associated reduction of vacancies, annualised contractual rent rose from EUR 72.1 million as at 31 December 2017 to EUR 72.4 million as at 31 March 2018. On a like-for-like basis, annualised rental income has increased by 1.6 % since 31 December 2017. Funds from operations (FFO I, after taxes, before minorities) amounted to EUR 5.2 million in the first quarter of 2018 (Q1 2017: EUR 2.0 million) as a result of lower interest expenses and an improved tax charge. In the first quarter, in the context of the planned overall capital expenditure for the 2018 financial year, funds from operations still showed a lower capital expenditure. Earnings before taxes (EBT) rose sharply as against the same quarter of the previous year to EUR 30.5 million (Q1 2017: EUR 3.7 million). The significant increase stems from fair value adjustments in investment properties, reduced finance expenses and lower general administrative expenses.
At 8.6 % as at the reporting date, the EPRA vacancy rate was down 80 basis points compared to the end of 2017. Driven by new lettings and reduced vacancies, the DEMIRE Group generated rental income of EUR 18.3 million in the first three months of 2018, only 1.5 % lower than in the same period of the previous year (EUR 18.5 million) on account of property sales.
Net Loan-to-Value falls by 200 basis points to below 60 %
At EUR 6.47 (basic, up 8.5 %) and EUR 5.29 (diluted, up 7.1 %), the figures for EPRA NAV per share were higher than at the end of 2017 (EUR 5.96 and EUR 4.94 respectively). The net loan-to-value ratio improved significantly by a further 200 basis points as against the end of 2017 (60.1 %) to 58.1 % as at 31 March 2018. The average interest costs are unchanged at a low level of 3.0 % p.a.
CEO/CFO Ralf Kind commented: “After successfully completing the 2017 financial year, we were able to seamlessly continue on the path taken with our DEMIRE 2.0 strategy in the first quarter of 2018. Our focus in the current fiscal year will therefore be on the gradual expansion of the real estate portfolio and the continued optimisation of our Group structure.”
Forecast for year as a whole confirmed
The Executive Board is reiterating the forecast for the 2018 financial year of FFO I between EUR 16 million and EUR 18 million. On the basis of the current property portfolio, the company is anticipating rental income of approximately EUR 71 million to EUR 73 million for the year as a whole.