Vonovia SE: 9 Month Results 2018: Operating Result Increases in Reporting Period; Vonovia to Adjust its Modernization Strategy as of 2019 in a Move to Accommodate its Tenants (news with additional features)
DGAP-News: Vonovia SE / Key word(s): 9 Month figures/Real Estate
Results as of September 30, 2018
- Vonovia increases operating result (FFO 1) in the first nine months of 2018.
- Expenses for maintenance up by around 18 %: Expenses of around EUR 410 million expected for 2018 as a whole.
- Positive outlook for 2018 as a whole and for 2019.
- Vonovia will not be implementing any comprehensive energy-efficient modernization projects in 2019/2020; costs passed on to tenants will not exceed EUR 2 per square meter. This will reduce the investment volume for energy-efficient modernization by 40 %.
- Investment capacity for 2019 increased overall; volume of EUR 1.3 billion to EUR 1.6 billion expected; Vonovia to reallocate its investments and build more of the smaller and senior-friendly apartments that are urgently required.
Bochum, Germany, December 6, 2018 - Business at Vonovia SE ("Vonovia") showed positive development between January and September 2018. Vonovia thus increased its FFO 1 (funds from operations; profit from operations after interest and taxes; without BUWOG), for example, by 12.7 % as against the same period of 2017 to EUR 778.2 million (9M 2017: EUR 690.5 million). This performance can be attributed primarily to the earnings contribution made by Victoria Park in Sweden, an improved financial result, the continued high demand for apartments and the low vacancy rate.
The adjusted EBITDA Value-add Business (craftsmen and housing-related services such as condominium administration, cable TV and metering services) came to EUR 90.7 million in the first nine months of 2018, an increase of 19.3 % year-over-year (9M 2017: EUR 76.0 million). FFO 1 interest expense was around 13 % lower than in the same period of the previous year at EUR 189.2 million (9M 2017: EUR 216.5 million).
Investments in Energy-Efficient Modernization Cut by 40 %
New Climate Protection Concept Being Developed
Vonovia's portfolio currently comprises around 400,000 residential units, with around 23,000 located in Austria and 14,000 in Sweden. The company also manages around 84,000 apartments for third parties. The apartment vacancy rate fell to 2.7 % (September 30, 2017: 2.9 %). Rental income came to EUR 1,287.6 million (excl. BUWOG). Rent rose by 1.5 % due to market-related factors. The investments made in the quality of Vonovia's buildings and apartments resulted in a further increase in rent of 2.5 %. New construction and vertical expansion added 0.1 % to rental growth. The average monthly rent per square meter in Vonovia's German portfolio came to EUR 6.45.
New Construction of Urgently Needed Apartments in Cities
In 2019, Vonovia plans to increase the volume to up to 2,900 apartments. "The overall conditions, however, mean that building new apartments is not an easy undertaking at present," says Buch. "We need faster planning and construction permit procedures, streamlined construction legislation and greater construction capacity."
Vonovia remains committed to sustainable neighborhood development. In Essen, the company has set up a shared living facility for ten dementia sufferers as part of a collaboration with the nursing care service provider Humanika. "This is another important issue that we are tackling," says Buch. "Growing old doesn't have to translate into a binary choice between staying in one's own home and moving into a nursing home. There are many concepts that offer an option between the two. We must expand and promote these to ensure that we have a sustainable nursing care system going forward." Vonovia is planning to offer dementia facilities in other locations as well.
Positive Outlook for 2019; Planned Dividends of EUR 1.44 per Share for 2018
Given the strong operating performance in the first nine months of 2018, Vonovia is confirming its forecast for the year as a whole. The company expects to achieve FFO 1 of between EUR 1.05 billion and EUR 1.07 billion (including BUWOG). This is likely to put the FFO 1 at around 15 % above the previous year's figure (2017: EUR 920.8 million). Vonovia plans to propose a dividend in the amount of EUR 1.44 per share at the Annual General Meeting in May 2019. This corresponds to an increase of EUR 0.12 over 2017 and to a dividend yield of 3.4 % based on the closing price on November 30, 2018. In 2019, Vonovia expects to generate FFO (including BUWOG) of between EUR 1.14 billion and EUR 1.19 billion.
The investment volume for 2018 as a whole is likely to amount to around EUR 1 billion, with the expenses for maintenance borne by Vonovia alone set to rise to around EUR 410 million (2017: around EUR 346.2 million). The company's investments will increase considerably in 2019 to a volume of around EUR 1.3 billion to EUR 1.6 billion. Vonovia has, however, reallocated its investments and will be upping its investments in new construction, senior-friendly apartment conversion and projects in Sweden considerably. The company will be reducing its energy-efficient modernization measures in Germany by 40 % from 2019 onwards.
2018/2019 Financial Calendar
March 7, 2019: Publication of 2018 Annual Report
* All values without BUWOG except key figures specifically marked with *
The company, which is based in Bochum, has been listed on the stock exchange since 2013 and on the DAX 30 since September 2015. Vonovia SE is also listed on the international indices STOXX Europe 600, MSCI Germany, MSCI Germany, GPR 250 and EPRA/NAREIT Europe. Vonovia has a workforce of approximately 9,900 employees.
This press release has been issued by Vonovia SE and/or its subsidiaries solely for information purposes. This press release may contain statements, assumptions, opinions and predictions about the anticipated future development of Vonovia ("forward-looking statements") that reproduce various assumptions regarding, e.g., results derived from Vonovia's current business or from publicly available sources that have not been subject to an independent audit or in-depth evaluation by Vonovia and that may turn out to be incorrect at a later stage. All forward-looking statements express current expectations based on the current business plan and various other assumptions and therefore come with risks and uncertainties that are not insignificant. All forward-looking statements should not therefore be taken as a guarantee for future performance or results and, furthermore, do not necessarily constitute exact indicators that the forecast results will be achieved. All forward-looking statements relate solely to the day on which this press release was issued to its recipients. It is the responsibility of the recipients of this press release to conduct a more detailed analysis of the validity of forward-looking statements and the underlying assumptions. Vonovia accepts no responsibility for any direct or indirect damages or losses or subsequent damages or losses, as well as penalties that the recipients may incur by using the press release, its contents and, in particular, all forward-looking statements or in any other way, as far as this is legally permissible. Vonovia does not provide any guarantees or assurances (either explicitly or implicitly) in respect of the information contained in this press release. Vonovia is not obliged to update or correct the information, forward-looking statements or conclusions drawn in this press release or to include subsequent events or circumstances or to report inaccuracies that become known after the date of this press release.
Document title: Results as of September 30, 2018 Operating Result Increases in Reporting Period; Vonovia to Adjust its Modernization Strategy as of 2019 in a Move to Accommodate its Tenants
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