Half-year figures 2015: DIC Asset AG increases operating profit

Frankfurt, 13 August 2015

Half-year figures 2015: DIC Asset AG increases operating profit

– FFO rose to EUR 24.0 million (H1 2014: EUR 23.6 million)

– EUR 150 million full-year guidance on total property disposals already reached – further disposals planned

– Real estate management fees up by 30 per cent

– Net interest expense decreased, via substantial refinancings

– Net debt equity ratio improved to 34.2 per cent
(31 Dec 2014: 33.4 per cent)

– Forecast for 2015 FFO confirmed at EUR 48 million to EUR 50 million

DIC Asset AG (German Securities ID A1X3XX / ISIN DE000A1X3XX4) today presented its interim report for the first half of the 2015 financial year.

Summary of results:

DIC Asset AG’s gross rental income amounted to EUR 70.4 million in the first six months of 2015 (H1 2014: EUR 73.6 million), a 4 per cent decrease, largely attributable to planned disposals from the Commercial Portfolio. At EUR 24.0 million, the FFO (funds from operations, defined as earnings before interest and taxes, and excluding profits from disposals and development projects) for the first six months of 2015 was two per cent higher than in the same period of the previous year (H1 2014: EUR 23.6 million), largely driven by a higher contribution from the funds business, up 30 per cent, and an improved interest result. FFO per share was EUR 0.35 as at 30 June 2015 (30 June 2014: EUR 0.34). Consolidated profit for the period rose by 25 per cent year-on-year, to EUR 5.0 million (H1 2014: EUR 4.0 million), due to the increase in the share of profit of associates as well as higher profits from investment property disposals compared to the same period of the previous year.

Ulrich Höller, Chairman of the Management Board, said: “DIC Asset AG fully achieved – and even markedly surpassed – some of its interim targets in the first half of 2015, moving very close to reaching its full-year targets.”

Operative business

EUR 150 million in disposals have been realised so far in 2015. DIC Asset AG thus reached the volume of disposals envisioned for the full year (EUR 150 million to EUR 170 million) earlier than planned. The disposals achieved an average mark-up of around seven per cent over the most recent market value determined. Against the background of its successful disposal activity so far in 2015, DIC Asset AG raises its disposal target to a minimum of EUR 180 million for the full year. With the continuous increase in volume of disposals, DIC Asset AG continues to markedly reduce its leverage.

Real estate management fees rose by around 30 per cent during the first six months of the year, to EUR 3.0 million (H1 2014: EUR 2.3 million), with significant contributions from fund real estate management fees. These increased by around EUR 0.6 million, to reach EUR 2.3 million (H1 2014: EUR 1.7 million).

The funds business continued to prosper during the first six months of 2015. FFO from fund real estate management and income from fund investments posted an increase of more than 30% to EUR 3.6 million when compared to the previous year’s figure (H1 2014: EUR 2.7 million). As previously reported, DIC Asset AG invested EUR 57 million year-to-date in another three properties for our special funds. In conjunction, the investment phase of the first fund, “DIC Office Balance I”, was concluded successfully. In total, the Company plans to spend at least EUR 130 million on acquisitions for its funds business in 2015.

DIC Asset AG’s letting performance during the first six months of 2015 comprised contracts generating aggregate annualised rental income of some EUR 6.3 million (H1 2014: EUR 11.3 million), including EUR 4.0 million in renewed rental agreements and EUR 2.3 million in new rentals. The vacancy rate at the end of the first half-year was 11.1 per cent (H1 2014: 11.5 per cent).

Financing terms significantly improved

Total financial liabilities declined to EUR 1.663 billion as at 30 June 2015, a reduction of approximately EUR 5.2 million compared to the previous year (31 Dec 2014: EUR 1.668 billion). The refinancing volume for the existing portfolio (Commercial Portfolio) due in 2015 amounts to approximately EUR 372 million. EUR 315 million thereof have been refinanced by the end of the first half of the year. The average term of new liabilities is approximately seven years. The average interest rate on financial debt in the form of bank loans stood at 3.5 per cent as at 30 June 2015 – down 60 basis points year-on-year (30 June 2014: 4.1 per cent). The average maturity of DIC Asset AG’s financial debt rose significantly because of these refinancings, from 4.0 years as at 31 December 2014, to 4.7 years.

As a result of the ongoing optimisation of our financing structure, the net debt equity ratio showed an increase of 80 basis points when compared to year-end 2014, to 34.2 per cent as of 30 June 2015 (31 Dec 2014: 33.4 per cent). Accordingly, the loan-to-value ratio decreased when compared to the year-end 2014, to 65.5 per cent (31 Dec 2014: 65.9 per cent).

The net interest result improved to EUR -31.9 million, largely driven by continuous optimisation of the company’s financing structure (H1 2014: EUR -34.0 million). Substantial refinancings significantly reduced interest expenses to EUR 36.9 million (H1 2014: EUR 38.9 million). Interest income remained stable year-on-year at EUR 5 million (H1 2014: EUR 4.9 million).

Half-year results confirm full-year guidance

Performance for the first six months of 2015 affirms DIC Asset AG’s FFO forecast of EUR 48 million to EUR 50 million for the 2015 financial year (2014: EUR 45.9 million), The strong momentum in disposals leads the Management Board to raise its full-year guidance on volume of disposals to a minimum of EUR 180 million . Taking effective and potential disposals into account, the vacancy rate for the overall portfolio is expected at around 11%. By the end of the year a rental income of EUR 134 million to EUR 136 million is expected. To achieve further growth in the funds business, DIC Asset AG plans to spend at least EUR 130 million on acquisitions.

For more information on DIC Asset AG, please visit the Company’s website www.dic-asset.de, where the half-yearly 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.

The Company’s investment strategy is geared to the continued development of a high-quality, highly profitable and regionally diversified portfolio.

Real estate assets under management comprise 230 properties with a market value of approximately EUR 3.2 billion, with a pro-rate value of EUR 2,3 billion. The real estate portfolio is structured in two segments: the Commercial Portfolio (EUR 2.1 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. In-house real estate management teams provide a direct service to tenants, working out of six different locations in each of the portfolio focus regions. This kind of market presence and expertise creates the basis for preserving and enhancing our earnings and real estate values. 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 contacts:

Thomas Pfaff Kommunikation
Höchlstrasse 2
81675 Munich, Germany
Phone: +49 89 992496-50
Fax: +49 89 992496-52
Mobile: +49 172 8312923
kontakt@pfaff-kommunikation.de

Investor Relations

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

Key financial indicators