DIC Asset AG: First half of 2023 influenced by the geopolitical environment – “Performance 2024” action plan to strengthen the company

Press release

DIC Asset AG: First half of 2023 influenced by the geopolitical environment – “Performance 2024” action plan to strengthen the company
 

• Assets under management at high level of EUR 14.2 billion
• Outstanding high letting volume of around 257,900 sqm (+50%)
• Like-for-like rental income growth of 4.8% in Commercial Portfolio
• Funds from operations (FFO) at EUR 22.4 million

Frankfurt am Main, 3 August 2023. DIC Asset AG (“DIC”), ISIN: DE000A1X3XX4, one of Germany’s leading listed property companies, published its financials for the first half of 2023 today. The financial results are influenced by the current geopolitical environment, rising interest rates and inflation. All of this is leading to persistent reluctance on the transaction market, among other things, and is influencing the results for the first half of the year. As a result, the funds from operations (“FFO”) (after non-controlling interests, before taxes) equalled EUR 22.4 million (previous year: EUR 53.0 million).

What is decisive for the future, however, is that DIC immediately launched the “Performance 2024” action plan in response to the changed conditions. This plan defines five key priorities on which the company will work. The objective of the action plan is to sustainably strengthen the company’s liquidity and to reduce its debt volume, to keep implementing the planned transactions from the company’s proprietary portfolio, to bolster the operational portfolio business through a strong letting performance, to place further investment vehicles, as well as to optimise and lower the operating costs.

“What sets DIC apart is the speed and consistency with which we have always responded to changes in the market. For example, with the acquisition of VIB last year, we decisively expanded our activities in logistics and set the strategic course for the future. We have also ensured that a significantly higher proportion of our FFO than before benefits from long-term recurring and plannable sources. And with the same strategic consistency, we are now setting the framework with our ‘Performance 2024’ action plan to position our company successfully and with stable earnings in a changed world,” said Sonja Wärntges, CEO of DIC.

H1 2023 financials:

• By 30 June 2023, assets under management amounted to EUR 14.2 billion and were thus at a level comparable to that of 30 June 2022.
• Year on year, the letting result increased by about 50% to around 257,900 sqm, not least as a result of the higher share of logistics lettings.
• The gross rental income increased to a total of EUR 96.9 million (previous year: EUR 75.2 million), most notably due to the consolidation of VIB and the like-for-like rental growth of the Commercial Portfolio of 4.8%.
• The real estate management fees, breaking down into asset management, property management and development fees, equalled EUR 21.8 million (previous year: EUR 39.5 million). During the prior-year period, the company had earned EUR 22.1 million in additional transaction and performance fees. The share of the profit or loss of associates declined to EUR 2.8 million (EUR 16.9 million) because of the slow transaction business and the disposal of a joint-venture participation the year before.
• The funds from operations (FFO) (after non-controlling interests, before taxes) fell short of the prior-year level at EUR 22.4 million (previous year: EUR 53.0 million). The decline is explained, apart from the currently higher interest burden (esp. as a result of the bridge loan to finance the VIB takeover), by the virtually complete absence of transactions during the first half of this year.
• Especially due to the higher interest expenses of EUR 53.2 million (previous year: EUR 30.9 million) and write-downs of property totalling EUR 23.9 million, the net result for the period of EUR -16.6 million is below last year’s figure (EUR 30.8 million).
• With the full value of the Institutional Business included, the Adjusted NAV amounted to EUR 21.19 per share as of 30 June 2023 (31 December 2022: EUR 21.84). The NAV per share equalled EUR 17.66 (31 December 2022: EUR 18.29).
• The LTV ratio (loan-to-value) – not including warehoused assets – was 57.6% as of 30 June 2023 (31 December 2022: 57.8%), thus maintaining a virtually stable level. The Adjusted LTV (factoring in the full value of the Institutional Business) equalled 54.3% (31 December 2022: 54.7%).
• The holdings of cash and cash equivalents amounted to EUR 485.1 million by the reporting date (31 December 2022: EUR 188.4 million), primarily as a result of the funding activities during the first half of 2023.

Adjusted 2023 forecast confirmed

Against the background of lingering geopolitical uncertainties, persistent inflation, and the further increase in interest rates, DIC proceeded to adjust its forecast for the financial year in progress as early as 7 July 2023. With the publication of the half-year results for 2023, DIC confirmed that it would uphold the adjusted forecast for its key earnings ratios. On the whole, the company expects the FFO for the 2023 financial year (after non-controlling interests, before taxes) to range between EUR 50 and 55 million.

Invitation to attend investor call / webcast on 3 August 2023

The Management Board of DIC Asset AG invites you to attend the presentation of the financial statement for the first half-year of 2023 on 3 August 2023 at 10:00 CEST.

To attend the conference call, please register at:

https://webcast.meetyoo.de/reg/mWIaXSXNGYRo

The webcast (incl. replay) is available under the link below:

https://www.webcast-eqs.com/dic-2023-hy/no-audio

For more details on DIC Asset AG, visit the company’s homepage at
www.dic-asset.de/en.

About DIC Asset AG:

DIC Asset AG is Germany’s leading listed specialist for office and logistics real estate with 25 years of experience on the real estate market and access to a broad-based network of investors. Our business is based on a regional and inter-regional real estate platform with nine offices on the ground in all major German markets (with VIB Vermögen AG included). We currently manage a total of 358 assets with a combined market value of EUR 14.2 billion on site, always close to our properties and their occupiers.

The Commercial Portfolio segment comprises real estate held for our own account. Here, we generate steady cash flows from stable rent revenues on long-term leases while also optimising the value of our portfolio assets through active management, and realising gains from sales.

In the Institutional Business segment, we earn recurrent fees from real estate services we provide to national and international institutional investors by structuring and managing investment products that return attractive dividend yields.

IR Contact DIC Asset AG:
Peer Schlinkmann
Head of Investor Relations & Corporate Communications
Neue Mainzer Strasse 20
D-60311 Frankfurt am Main
Phone +49 69 9454858-1492
ir@dic-asset.de

DIC Asset AG at a glance

* Warehoused assets not included

** Per-share figures adjusted according to IFRS (number of shares on 30/06/2023: 83,565k | 31/12/2022: 83,152k)

*** Incl. full value of the Institutional Business

**** Commercial Portfolio without properties to be repositioned and warehoused assets