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DIC Asset AG with strong operative business

 ​DGAP-News DIC Assets​

DIC Asset AG / Key word(s): 9-month figures

11.11.2014 / 07:33

Frankfurt, 11 November 2014

DIC Asset AG with strong operative business

Gross rental income up by 20 per cent, to EUR 110.7 million

FFO up 3 per cent, to EUR 35.4 million (9m 2013: EUR 34.3 million)

Strong letting performance of 155,000 sqm – vacancy rate stable, at 11.5 per cent

Average interest rate declined to 3.9 per cent (31 Dec 2013: 4.1 per cent)

Forecast for 2014 FFO affirmed, at EUR 47 million to EUR 49 million

DIC Asset AG (German Securities ID A1X3XX / ISIN DE000A1X3XX4) today presented its interim report for the first nine months of the 2014 financial year. The Company maintained growth momentum in its operative business, and affirms its full-year forecast. Business development was shaped by several factors: the strong increase in rental income, combined with high letting performance; brisk sales activities, with additional transactions in the pipeline for the fourth quarter; and the Company’s third corporate bond issue, which has replaced the higher-yielding first corporate bond issued in 2011.

Continued growth in operating results

Gross rental income rose by 20 per cent during the first nine months of the year, to EUR 110.7 million (9m 2013: EUR 91.9 million). Rental income from the joint-venture portfolio acquired at the end of 2013 exceeded the loss of rental income due to disposals.

Nine-month FFO (funds from operations, defined as earnings before interest and taxes, and excluding profits from disposals and development projects) of EUR 35.4 million was up 3 per cent year-on-year (9m 2013: EUR 34.3 million), reflecting the increase in rental income through the joint-venture portfolio acquired. FFO per share (including the share capital increase at the end of 2013) amounted to EUR 0.52 as at 30 September 2014 (30 Sep 2013: EUR 0.73). Nine-month profit for the period of EUR 5.9 million (9m 2013: EUR 10.6 million) was in line with expectations. Key factors influencing results were lower profits on property disposals for the period ending on 30 September 2014, compared to the same period of the previous year, as well as non-recurring expenses for the placement of the third bond and termination of the first bond.

Full-year forecasts affirmed

DIC Asset AG affirms its FFO forecast of EUR 47 million to EUR 49 million for the 2014 financial year (2013: EUR 45.9 million), based on expected full-year rental income of between EUR 145 million and EUR 147 million (2013: EUR 125.2 million).

Reliably strong operating income

DIC Asset AG’s consistently strong letting performance during the first nine months of 2014 comprised contracts with an aggregate annualised rental income of some EUR 16.3 million (9m 2013: EUR 15.2 million), including EUR 7.6 million in new rentals and EUR 8.7 million in renewed rental agreements. This corresponds to an aggregate letting performance of approximately 155,000 sqm, of which 66,900 sqm was in new rentals. As in the previous quarter, the vacancy rate remained stable during the third quarter, at 11.5 per cent (9m 2013: 10.8 per cent) – in line with expectations.

The total volume of disposals to date has reached approximately EUR 85 million. With further transactions already in the pipeline, the full-year target is set at EUR 130 million. During the period ending on 30 September 2014, nine properties were sold for a consideration of approximately EUR 64 million (9m 2013: EUR 56 million). The selling prices achieved an average mark-up of around four per cent over the most recent market value determined. Four additional sales with an aggregate value of approximately EUR 21 million were closed after the reporting date.

The Company’s funds business also saw solid development: despite the reduction in DIC Asset AG’s stake in its first “DIC Office Balance I” special fund during the current financial year (from 20 to 10 per cent), FFO contributions from all three funds remained virtually stable during the first nine months of the year, at EUR 4.0 million (9m 2013: EUR 4.4 million).

Financing structure influenced by non-recurring effects

Key financial indicators at the end of the third quarter reflect predominantly higher interest expenses following the portfolio acquisition, as well as financial obligations from the third bond issue, which was placed in order to optimise interest costs.

Total financial liabilities increased to EUR 1.827 billion as at 30 September 2014 (31 Dec 2013: 1.724 billion), largely as a result of the third bond issue. This temporarily increased the aggregate volume of bonds outstanding by EUR 125 million, of which EUR 100 million was used to fully repay the first bond, after reporting date. The Company repaid approximately EUR 58.9 million during the first nine months, from disposals as well as through scheduled redemptions. The average interest rate on financial debt in the form of bank loans declined to 3.9 per cent as at 30 September 2014 (31 Dec 2013: 4.1 per cent). The average maturity of DIC Asset AG’s financial debt declined to 4.0 years, as expected, from 4.5 years at the end of 2013, reflecting the lower volume of financings and refinancing operations.

The net debt equity ratio as at 30 September 2014 declined slightly, to 32.4 per cent (31 Dec 2013: 32.6 per cent), largely due to the dividend distribution and the raising of an additional EUR 125 million via the third bond issue. Accordingly, the net debt ratio based on the portfolio market value (loan-to-value ratio) rose by 0.7 percentage points, to 67.6 per cent (31 Dec 2013: 66.9 per cent).

The net interest result totalled EUR -52.7 million as at 30 September 2014 (9m 2013:
EUR -38.5 million). Interest expenses rose to EUR 60.2 million (9m 2013: EUR 46.5 million), due to the previous year’s portfolio acquisition and the EUR 125 million increase in the volume of bonds outstanding. Early repayment of the first bond issue in mid-October 2014 led to a non-recurring effect of EUR 2.0 million as at 30 September 2014. Interest income was down EUR 0.4 million year-on-year, to EUR 7.5 million, reflecting a lower level of placements.

Ulrich Höller, CEO of DIC Asset AG, commented on the results: “We have taken all the necessary steps to achieve our targets for the year. Thanks to our improved earnings base and financing structure, we will close 2014 with another attractive result for our shareholders.”

For more information on DIC Asset AG, please visit the Company’s website, where the nine-month 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 3.4 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 2.2 billion) comprises existing properties with long-term rental contracts generating attractive rental yields. The Co-Investments segment (pro-rata share of EUR 0.2 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.

Media contact:

Thomas Pfaff Kommunikation
Höchlstrasse 2
81675 Munich, Germany
Phone: +49 89 992496-50
Fax: +49 89 992496-52
Mobile: +49 172 8312923

Investor Relations

Peer Schlinkmann
Neue Mainzer Strasse 20 – MainTor
60311 Frankfurt/Main, Germany
Phone: +49 69 274033-1221
Fax: +49-69-274033-9399

Key financial indicators

Financial indicators (EUR mn) 9m 2014 9m 2013   Q3 2014 Q2 2014  
Total income 165.3 175.7 -6% 50.9 52.3 -3%
Gross rental income 110.7 91.9 +20% 37.1 36.8 +1%
Fees from real estate management 3.6 5.0 -28% 1.3 1.2 +8%
Property disposal proceeds 22.7 62.1 -63% 3.2 3.5 -9%
Profits on property disposals 1.0 4.2 -76% 0.4 -0.1 >100%
Funds from Operations (FFO) 35.4 34.3 +3% 11.8 11.6 +2%
Financial indicators per share (EUR) 9m 2014 9m 2013   Q3 2014 Q2 2014  
EPRA earnings* 0.51 0.69 -26% 0.17 0.17 ±0%
FFO* 0.52 0.73 -29% 0.18 0.16 +13%

* Based on the new average number of shares outstanding, in accordance with IFRS


Statement of financial position
key items (EUR mn)
30 Sep 2014   31 Dec 2013
Net debt equity ratio (%) 32.4   32.6
Loan-to-value ratio (LTV) (%) 67.6   66.9
Investment property 2,181.2   2,256.4
Equity 766.5   793.1
Financial debt 1,826.9   1,723.9
Total assets 2,674.8   2,596.0
Cash and cash equivalents 182.6   56.4


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