DEMIRE defies Corona: Rental income and FFO increase in the first half of 2020, new 2020 guidance predicts further growth

DGAP-News: DEMIRE Deutsche Mittelstand Real Estate AG / Key word(s): Half Year Results/Forecast19.08.2020

DGAP-News: DEMIRE Deutsche Mittelstand Real Estate AG / Key word(s): Half Year Results/Forecast
19.08.2020 / 07:00
The issuer is solely responsible for the content of this announcement.

DEMIRE defies Corona: Rental income and FFO increase in the first half of 2020, new 2020 guidance predicts further growth

- Rental income increased by 14.7 percent to EUR 43.8 million

- FFO I (after taxes, before minorities) improved by 5.9 percent to EUR 16.9 million

- Rental payments in July and August are developing positively

- New forecast: rental income and FFO expected to be higher than previous year

- Dividend proposal of EUR 0.54 per share for the Annual General Meeting on 22 September 2020

Langen, 19 August 2020. DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) has recorded a positive first half of 2020 and continues to grow despite the COVID 19 pandemic. Key operating and portfolio-related figures improved compared to the first half of 2019. After the pandemic had no significant impact on DEMIRE in the first quarter, only 4.1% of the contractually agreed annual rent was not paid in the second quarter.

Rental income and FFO increased - liquidity buffer expanded

Despite the adverse effects of the COVID 19 pandemic on the economy as a whole, rental income rose by around 14.7 percent compared with the same period of the previous year to EUR 43.8 million. At the same time, Funds From Operations (FFO I, after taxes, before minorities) increased to around EUR 16.9 million - an increase of 5.9 percent. The undiluted EPRA NAV per share rose from EUR 6.35 at the end of 2019 to EUR 6.43 in the reporting period.

The DEMIRE portfolio with a market value of around EUR 1.5 billion consisted of 84 properties as of the reporting date (30 June 2020). Compared to the end of 2019, DEMIRE has trimmed its portfolio by disposing six non-strategic assets. The EPRA vacancy rate was reduced by 0.9 percentage points to 8.5 percent in the first half of the year due to a strong letting performance of more than 70,000 m², while the WALT remained constant at 4.8 years.

Ingo Hartlief, CEO of DEMIRE, says: "Despite the challenging economic situation and the continuing economic restrictions caused by the pandemic, our portfolio is proving to be robust. Our 'REALize potential' strategy is demonstrating its effectiveness and sustainability even in turbulent times. Right at the beginning of the pandemic, we outlined and resolutely pursued a comprehensive package of actions with various efficiency and liquidity measures to further improve our ability to act." These activities include the agreement of two loan contracts with a total volume of EUR 62.5 million, which DEMIRE can draw on short notice. "With the loans recently concluded at very favourable conditions and our existing liquidity position of EUR 81 million, we believe we are well positioned to take advantage of any market situation and growth opportunity that might arise - and to pay our first dividend for the 2019 fiscal year," adds Tim Brückner, CFO of DEMIRE.

Further loan agreements signed at attractive conditions - LTV improved

The nominal interest costs of DEMIRE have fallen from 2.78 percent on 30 June 2019 to 1.78 percent due to successfully implemented refinancing activities in the last few months and will continue to fall as a result of the new loan agreements. The net loan-to-value (NET LTV) has decreased by 0.5 percentage points to 46.2 percent as of 30 June 2020. In the course of the regular review both rating agencies Moody's and Standard & Poor's, confirmed DEMIRE's creditworthiness at the previous level of Ba2 and BB, despite the macroeconomic distortions, due to the high stability, further improved key figures and the good diversification of the portfolio.

Positive development of rental payments and new 2020 guidance above previous year's results

In view of the robust operational development in the first half of the year and the recovery of rental payments to 97% in July and 96% in August, DEMIRE has a positive outlook and publishes a new guidance for the current business year. Assuming that there is no further lockdown in Germany, DEMIRE expects rental income between EUR 85 and 87 million in 2020 (2019: EUR 81.8 million) and FFO I (after taxes, before minorities) between EUR 36 and 38 million (2019: EUR 34.5 million). Possible further acquisitions or disposals in the second half of 2020 are not included in this figure either.

Furthermore, DEMIRE has adjusted its proposal for the appropriation of profits for fiscal year 2019 and set the date for the 2020 Annual General Meeting. It will now be proposed to the Annual General Meeting, which is planned for 22 September 2020 as a virtual event without the physical presence of shareholders and their representatives, that a dividend of EUR 0.54 per share be distributed. As the dividend will be paid in full from the tax contribution account, it will be paid tax-free for domestic shareholders.

The DEMIRE interim report is available on the Company's website for downloading at: https://www.demire.ag/en/investor-relations/reports-results

Invitation to the Conference Call on 19 August 2020
The Management Board of DEMIRE invites all interested parties to attend the presentation of the H1 2020 interim results during a conference call on 19 August 2020 at 10:00 CET.

To dial in, please use the following phone numbers:
Germany: +49 32 2142 19720
UK: +44 20 8089 2860
USA: +1 334 777 6978

PIN: 318 8902

The presentation of the quarterly financial report will also streamed as a live webcast. Please use the link https://webcasts.eqs.com/demire20200819/no-audio

For the audio broadcast, please use the dial-in numbers listed above. A presentation will be available on https://www.demire.ag/en/investor-relations/reports-results

Selected Key Performance Indicators of DEMIRE Group

  01/01/2020-
30/06/2020
01/01/2019-
31/06/2019
Consolidated income statement
(in EURm)
   
Rental income 43.8 38.2
Net income from the rental of real estate 33.0 32.0
EBIT 21.9 54.9
Financial results -9.9 -14.0
Profit/loss for the period after tax 9.3 34.2
- thereof attributable to shareholders of the parent company 8.3 31.8
FFO I (after tax, before minority interests) 16.9 15.9
FFO II (after tax, before minority interests) 13.6 15.8
Basic/diluted earnings per share (in EUR) 0.16/0.16 0.15/0.15
Consolidated accounts (in EURm) 30.06.2020 31.12.2019
Total assets 1,657.6 1,677.4
Investment properties 1,511.8 1,493.9
Cash and cash equivalents 81.0 102.1
Properties held for sale 10.4 16.3
Shareholders' equity (incl. non-controlling shareholders) 669.2 660.8
Equity ratio (in % of total assets) 40.4 39.4
Undiluted/diluted EPRA-NAV 693.4/693.9 684.1/684.6
EPRA-NAV per share (EUR, basic/diluted) 6.43/6.41 6.35/6.32
Net financial liabilities 703.5 704.8
Net debt-to-equity ratio (net LTV), in % 46.2 46.7
Portfolio key ratios 30.06.2020 31.12.2019
Properties (number) 84 90
Market value (in EURm) 1,503.5 1,488.4
Annualised gross rental income (in EURm) 89.0 90.0
Rental yield (in %) 5.9 6.0
EPRA vacancy rate (in %) 8.5 9.4
WALT (in years) 4.8 4.8
 

Contact: 

Michael Tegeder
Head of Investor Relations & Corporate Communications
DEMIRE Deutsche Mittelstand Real Estate AG
Telefon: +49 6103 372 4944
Email:


 

About DEMIRE Deutsche Mittelstand Real Estate AG

DEMIRE - REALize Potential

DEMIRE Deutsche Mittelstand Real Estate AG acquires and holds commercial real estate in mid-sized cities and up-and-coming locations bordering metropolitan areas across German. The Company's particular strength lies in realising the potential of the properties at these locations while focusing on a range of properties that appeals to both regional and international tenants. As of 30 June 2020, DEMIRE's portfolio contains of 84 Assets with lettable space totalling more than 1 million square metres and has a market value in excess of EUR 1.5 billion.

The portfolio's focus on office properties with a blend of retail, hotel and logistics properties results in a return / risk structure that is appropriate for the commercial real estate segment. The Company places importance on long-term contracts with solvent tenants and the realisation of the properties' potential. DEMIRE anticipates continued stable and sustainable rental income along with solid value appreciation and expects the portfolio to grow significantly in the medium term. As it expands its portfolio, DEMIRE is concentrating on FFO-strong assets with potential and, at the same time, disposing of properties that are not in line with its strategy. DEMIRE is taking several steps to further the development of its operations and processes. Next to cost consciousness, the operating performance is set to improve through an active asset and portfolio management approach.

DEMIRE Deutsche Mittelstand Real Estate AG shares are listed in the Regulated Market (Prime Standard segment) of the Frankfurt Stock Exchange.


 


19.08.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Contact
DEMIRE Deutsche Mittelstand Real Estate AG
Robert-Bosch-Straße 11
63225 Langen
phone: +49 (0) 6103 – 372 49-0
fax: +49 (0) 6103 – 372 49-11
email:
Web: www.demire.ag

INVESTOR RELATIONS CONTACT
Michael Tegeder
Head of Investor Relations
& Corporate Finance

phone: +49 (0) 6103 37249 44
fax: +49 (0) 6103 37249 11
email:

Feldhoff & Cie. GmbH
Herr Markus Heber
phone: +49 69 26 48 677 – 19
email: