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DIC Asset AG posts strong earnings growth

DIC Asset AG / Key word(s): Quarter Results

13.11.2013 / 08:02

Press Release

Frankfurt, 13 November 2013

DIC Asset AG posts strong earnings growth

Vacancy rate improved, to 10.8 per cent (9m 2012: 11.7 per cent)

FFO (funds from operations) up 6 per cent, to EUR 34.3 million (9m 2012: EUR 32.5 million)

FFO forecast for the 2013 financial year confirmed

DIC Asset AG (German Securities ID A1X3XX / ISIN DE000A1X3XX4) today presented its interim report for the first nine months of the 2013 financial year. The Company’s key financial indicators point towards DIC Asset AG achieving its year-end targets for 2013.

Significant increase in earnings

DIC Asset AG generated gross rental income of EUR 91.9 million during the first nine months of the year (9m 2012: EUR 94.3 million). Reflecting the realised sales of properties, rental income was slightly lower year-on-year. However, the trend during the second and third quarters was positive (Q2 2013: EUR 30.7 million; Q3 2013: EUR 30.9 million), thanks to the increased letting rate. Profits on property disposals rose markedly during the first nine months of 2013 and amounted to EUR 4.2 million (9m 2012: EUR 0.7 million). Consequently, total income for the period ending on 30 September 2013 rose to EUR 175.7 million, up 46 per cent year-on-year (30 Sep 2012: EUR 120.4 million).

At EUR 34.3 million, the FFO (funds from operations, defined as earnings before interest and taxes, and excluding profits from disposals and development projects) for the first nine months of 2013 was six per cent higher than in the same period of the previous year (9m 2012: EUR 32.5 million). The increase in FFO was largely attributable to growth in the fund management business and the associated increases in investment income and management fees, as well as to the improved net interest result. FFO per share increased to EUR 0.75 (9m 2012: EUR 0.71). Due to the higher profits on property disposals and the reduction in financing costs, consolidated profit for the period of EUR 10.6 million was up 36 per cent year-on-year (9m 2012: EUR 7.8 million).

DIC Asset AG confirms forecasts for the full year

DIC Asset AG confirms its FFO forecast of EUR 45 million to EUR 47 million for the 2013 financial year (2012: EUR 44.9 million). Rental income is projected at EUR 121 million to EUR 123 million (2012: EUR 126.5 million), following the higher level of disposals; the Company also projects a reduction in the vacancy rate, to around 10 per cent (2012: 10.9 per cent).

Financial position optimised further

Total financial debt declined to EUR 1.43 billion as at 30 September 2013, a marked reduction of approximately EUR 100 million compared to the previous year (30 Sep 2012: EUR 1.53 billion; 31 Dec 2012: EUR 1.49 billion). The average interest rate on financial debt stood at an attractive 4.1 per cent as at 30 September 2013 – in line with the previous year’s figure. The average maturity of DIC Asset AG’s financial debt has risen significantly, from 2.7 years as at 30 September 2012 to 4.2 years as at 30 September 2013.

The LTV (loan-to-value) based on the portfolio market value improved to 67.6 per cent (31 Dec 2012: 68.1 per cent). The net debt equity ratio (based on net liabilities, and adjusted for effects of derivatives) rose to 32.1 per cent as at 30 September 2013 (31 Dec 2012: 31.6 per cent).

The net interest result improved by 9 per cent, to EUR -38.5 million (9m 2012: EUR -42.5 million). Interest expenses decreased by EUR 3.5 million to EUR 46.5 milllion; besides the lower aggregate financing volumes and the lower interest rate levels, improved loan terms achieved in the course of refinancings also contributed to the lower expense figure. Consequently, the interest cover ratio (ICR), defined as the ratio of net rental income to interest payments, rose significantly, to 175 per cent (30 Sep 2012: 169 per cent; 31 Dec 2012: 172 per cent).

Cash and cash equivalents totalled around EUR 47 million at the end of the period under review (31 Dec 2012: approximately EUR 57 million); the decline reflected predominantly the distribution of dividends.

Operative business performance: Enhanced portfolio quality

Following up on a successful first half of the year, DIC Asset AG’s letting performance totalled approximately 39,800 sqm during the third quarter, already including long-term renewals of contracts set to expire in 2014. Total rentals concluded during the first nine months of the year thus amounted to approximately 133,700 sqm. New rentals accounted for 60,500 sqm thereof, with the remaining 73,200 sqm in renewals. The milestone achievement during the third quarter was a 5,300 sqm letting to Deutsche Bank in Frankfurt/Main, which enabled DIC Asset AG to fully re-let an office property after only a few months of being vacant. Strong letting performance pushed the vacancy rate down further, to only 10.8 per cent (9m 2012: 11.7 per cent; Q2 2013: 11.1 per cent).

With aggregate year-to-date disposals of EUR 86 million (9m 2012: EUR 14 million), DIC Asset AG has already exceeded its full-year sales target of EUR 80 million. In doing so, the Company exploited significantly higher demand for real estate investments recently, achieving an average mark-up of selling prices of around five per cent over the most recent market values determined. Given the benign market environment, further disposals are possible until the year-end, should suitable opportunities arise.

DIC Asset AG successfully pursued its fund business comprising the two special funds, DIC Office Balance I and DIC HighStreet Balance, during the first nine months of the year, with acquisitions of some EUR 105 million, as reported. At EUR 500 million, the aggregate investment volume of the two funds has already reached 70 per cent of the target volume (up to EUR 700 million) projected by 2015. FFO contributions from fund management rose strongly, to EUR 4.4 million (9m 2012: EUR 2.5 million).

Development of the MainTor quarter in Frankfurt, in which DIC Asset AG holds a 40 per cent stake, continues to make good progress: more than 87 per cent of the flats in the ‘MainTor Palazzi’ development have already been sold. The Company currently prepares to market the central ‘WinX’ office tower, which will go on the market at the beginning of 2014. Negotiations on a sale of the ‘MainTor Porta’ complex – which is currently under construction – are at an advanced stage. DIC Asset AG anticipates an agreement to be concluded during the next months, also for the ‘Opera Offices Neo’ development in Hamburg with a forward deal.

Ulrich Höller, CEO of DIC Asset AG, said: ‘DIC Asset AG is well on track for completing yet another successful financial year, with a further increase in earnings.’

For more information on DIC Asset AG, please visit the Company’s website, where the quarterly report is also available.

About DIC Asset AG:

Established in 2002, DIC Asset AG, with registered offices in Frankfurt/Main, is a real estate company with a dedicated investment focus on commercial real estate in Germany, pursuing a return-oriented investment policy. Real estate assets under management currently amount to approx. EUR 3.2 billion, comprising around 250 properties. The Company’s investment strategy is geared to the continued development of a high-quality, highly profitable and regionally diversified portfolio. The real estate portfolio is structured in two segments: the Commercial Portfolio (EUR 1.8 billion) comprises existing properties with long-term rental contracts generating attractive rental yields. The Co-Investments segment (pro-rata share of EUR 0.3 billion) comprises fund investments, joint-venture investments, and interests in development projects. DIC Asset AG provides a direct service to tenants through its own real estate management teams in six branch offices located at the regional hubs within the portfolio. This provides DIC Asset AG with an edge in terms of market presence and expertise, and builds the foundation for maintaining and increasing income – and the value of its real estate assets. DIC Asset AG has been included in the SDAX(R) segment of the Frankfurt Stock Exchange since June 2006. The Company’s shares are also included in the EPRA index, which tracks the performance of the most important European real estate companies.

Press Contact:
Thomas Pfaff Kommunikation
Höchlstraße 2
D-81675 Munich
phone +49-89-992496-50
fax +49-89-992496-52
mobile +49-172-8312923

Investor Relations & Corporate Communications Contact:
Immo von Homeyer
DIC Asset AG
Eschersheimer Landstraße 223
D-60320 Frankfurt am Main
phone +49-69-274033-86
fax +49-69-9454858-99

Key financial indicators

Operating performance indicators
(EUR mn)
9M 2013 9M 2012   Q3
Total income 175.7 120.4 +46% 63.8 37.8 +69%
Gross rental income 91.9 94.3 -3% 30.9 30.7 +1%
Fees from real estate management 5.0 3.6 +39% 1.9 1.5 +27%
Property disposal proceeds 62.1 5.8 >+100% 25.0 0.1 >+100%
Profits on property disposals 4.2 0.7 >+100% 2.5 0 >+100%
Funds from Operations (FFO) 34.3 32.5 +6% 11.2 11.8 -5%
FFO per share (EUR) 0.75 0.71 +6% 0.25 0.26 -4%


Statement of financial position – key items (EUR mn) 30 Sep 2013 31 Dec 2012  
Net debt equity ratio (%) 32.1 31.6  
Investment property 1,808.7 1,847.4  
Equity 637.7 614.8  
Financial debt 1,433.9 1,489.9  
Total assets 2,147.9 2,210.2  
Cash and cash equivalents 46.9 56.7  


End of Corporate News

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