Deutsche Annington Immobilien SE / Key word(s): Half Year Results
2015-08-19 / 07:03
INFORMATION TO THE MEDIA
Deutsche Annington: Half-yearly result confirms sustainable growth strategy
- Further increase in earnings power - Funds from Operations more than doubled
- FFO I amount to EUR 0.74 per share (H1 2014: EUR 0.54)
- Consolidated FFO 1 of EUR 130.3 million (H1 2014) more than doubles to EUR 264.3 million (103 %)
- Net asset value up by 53.4 % to EUR 10.09 billion
- Vacancy rate remains very low at 3.5 %
- 2.7 % increase in rent like for like to EUR 5.73
- Sustainable business model - investments in existing properties stepped up considerably again
- Investments in property portfolio in H1 up considerably to EUR 265.2 million
- 56 % of investments destined for maintenance
- Modernisation well on track
- Solid outlook - Management Board confirms increased forecast for the year as a whole
- Dividend proposal up by 27 % year-on-year to EUR 0.94 per share
Bochum, August 19, 2015 - Improvements in property management, the rapid integration of GAGFAH and the fact that Dewag, Vitus and Franconia have already been integrated in full have resulted in a marked improvement in Deutsche Annington's earnings power. The company achieved a substantial increase in all key figures in the first half of 2015 and has confirmed the significantly higher forecast for 2015 as a whole.
"Our solid key figures for the first six months confirm that we are on the right track: We have established processes to integrate even large real estate portfolios. Consequently we are growing in Germany's attractive regions. At the same time, we are continually enhancing our operational business and investing vast sums in the modernisation of our properties. This allows us to secure stable returns for our investors and to improve the services we offer our customers at the same time", says Rolf Buch, CEO of Deutsche Annington. "The Südewo Group in Baden-Württemberg - new in our portfolio since July 2015 - will also make a sustainable contribution to improving our earnings power even further."
Funds from Operations more than doubled year-on-year
The company more than doubled the key figure FFO I (Funds from Operations), in the first half of 2015. FFO I represents the operating result after current interest and taxes. FFO I increased by 103 % to EUR 264.3 million (H1 2014: EUR 130.3 million). This corresponds to a contribution of EUR 0.74 per share (H1 2014: EUR 0.54). The net asset value (EPRA NAV) - real estate assets without liabilities - rose by 53.4 % as at June 30, 2015, from EUR 6.58 billion to around EUR 10.09 billion. EPRA NAV rose by 16.2 % to EUR 28.14 per share (December 31, 2014: EUR 24.22). The vacancy rate remained at a very low level of 3.5 % (June 30, 2014: 3.8 %). The monthly in-place rent per square metre rose to EUR 5.73 on a like-for-like basis (June 30, 2014: EUR 5.58), which corresponds to an increase of 2.7 %. Like-for-like, this means that the comparison refers to the same housing stocks.
On August 18, 2015, Deutsche Annington's market capitalisation came in at approximately EUR 13.6 billion, with a free float of 94.07 % (Definition of Deutsche Börse). The company acquired the Südewo Group, which is based in the German federal state of Baden-Württemberg and has nearly 20,000 residential units in its portfolio, on July 8, 2015. The cash capital increase of around EUR 2.3 billion, around EUR 1.9 billion of which was used to finance the takeover, helped to further reduce the Group's liabilities. The loan-to-value (LTV) ratio, which was on a par with the previous quarter (56.3 %) at the end of the first half at 56.4 %, dropped to 50.0 % in pro forma terms after the reporting date, taking Südewo and the capital increase into account. This means that the Management Board has almost achieved its medium-term LTV target value of below 50 %.
In addition to the acquisitions of Dewag and Vitus, which were realised in 2014, the financial statements for the first half of 2015 also include, from March 2015 onwards, the earnings contributions made by the merger with GAGFAH and, for the first time, from April 2015 onwards, the contribution to earnings made by Franconia. These figures are compared against the business figures for H1 2014, which include Dewag but do not include GAGFAH, Franconia or Vitus. The earnings contribution made by the recent acquisition of the Südewo Group will not be reflected in Deutsche Annington's financial statements until the third quarter of 2015.
Further improvement in property quality - significant increase in investments in existing properties
Investments in maintenance and modernisation have been stepped up again considerably in this financial year. Modernisation measures are well on track. In 2015 as a whole, the company is planning to invest between EUR 620 million and EUR 640 million in maintenance and modernisation. This corresponds to around EUR 31 (2014: EUR 29.12) per square metre. This puts Deutsche Annington's investments at a level that is much higher than that seen at comparable companies. In the first half of 2014, expenditure on maintenance and modernisation totalled EUR 265.2 million (H1 2014: EUR 141.5 million). In the period under review, around 56 % of this amount was attributable to maintenance and 44 % to modernisation.
Outlook for 2015 - Management Board confirms increased forecast
Deutsche Annington is also able to continue its positive development in the second half of the year and confirm its recently increased forecast. This is due to the improved operative developments and the integration of SÜDEWO within the third quarter. Additionally, Deutsche Annington expects the synergy effects resulting from the merger with GAGFAH to increase to around EUR 130 million by the end of 2017. These synergy effects will be generated in financial and operational areas - for example in rental, procurement and portfolio management, as well as in the area of housing-related services. The integration will also be completed more quickly than originally planned.
This is likely to push rental income up to around EUR 1.4 billion by end of 2015. The company is still aiming for a vacancy rate of around 3 %. As far as the FFO I is concerned, Deutsche Annington expects to see an amount of between EUR 560 million and EUR 580 million. The net asset value will rise to between EUR 27.50 and EUR 28.50 per share by the end of the year. The Management Board proposes a dividend of EUR 0.94 per share for the year, a 27 % increase on the previous year.
About Deutsche Annington
Deutsche Annington, which has its headquarters in Bochum, is Germany's leading real estate company with a European dimension. Deutsche Annington can be found across Germany with around 5,900 employees and offers customer-oriented services. The integration of GAGFAH's 144,000 apartments means that the company now boasts a portfolio of around 350,000 residential units, largely located in major German cities and the areas surrounding these cities. The operational subsidiaries are full-service providers offering a large range of property and facility management services. Its portfolio is worth approximately EUR 21 billion. Deutsche Annington is listed on the MDAX of the German stock exchange. (June 30, 2015)
More information about Deutsche Annington shares:
Approval: Regulated Market / Prime Standard, Frankfurt Stock Exchange
Common code 094567408
Registered office of Deutsche Annington: Münsterstrasse 248, 40470 Düsseldorf, Germany
Business address of Deutsche Annington: Philippstrasse 3, 44803 Bochum, Germany
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