CPI Property Group (société anonyme) 40, rue de la Vallée L-2661Luxembourg

R.C.S. Luxembourg: B 102 254

Press Release - Corporate News

Luxembourg, 31 August 2021

CPI PROPERTY GROUP publishes half-year financial results for 2021

CPI PROPERTY GROUP (hereinafter "CPIPG", the "Company" or together with its subsidiaries the "Group"), a leading owner of income-generating European real estate, hereby publishes unaudited financial results for the six-month period ended 30 June 2021.

"CPIPG's property portfolio clearly passed the ultimate stress test of COVID-19," said Martin Nemecek, CEO. "Once again, the Group proved the resilience of our diversified portfolio and reported record levels of income, a strong capital structure and several important investments for the future."

Highlights for the first half of 2021 include:

  • CPIPG's property portfolio increased to €11.2 billion (up 9% versus 2020) as the Group completed €580 million of acquisitions and benefited from a €317 million increase in the fair value of residential, landbank and office assets along with FX movements.
  • Total assets reached €12.6 billion (up 7% versus 2020), driven by increases to the property portfolio, offset by a slight reduction in cash and cash equivalents.
  • The Group collected 95% of contracted rent in H1 2021 before the impact of one-timeCOVID-19 discounts, which amounted to about 4% of gross rental income. Office and residential collections were close to 100%.
  • Net rental income increased to €175 million (up 7% versus H1 2020) and consolidated adjusted EBITDA rose to €172 million (up 5% versus H1 2020) due to the contribution from recent acquisitions and developments, broadly stable occupancy at 92.6%, limited COVID-19rent discounts and 1.9% like-for-likegrowth in gross rental income.
  • Because of effective cost control, the hotel segment reported only a small net loss (-€4million) despite hotels being closed for much of the period. As the COVID-19situation improved across our portfolio from April/May 2021, the Group has seen a strong increase in hotel bookings.
  • Net business income (up 6% versus H1 2020 to €178 million) and FFO (up 10% versus H1 2020 to €127 million) show the benefits of CPIPG's stable business performance, diversified sources of income, and contribution from recent acquisitions.
  • EPRA NRV (NAV) increased 3% to €5.3 billion.
  • Net Loan-to-Value(LTV) at 41.9% (+1.2 p.p. versus 2020, -0.6 p.p. versus H1 2020) remained in line with the Group´s financial policy guidelines. In support of our commitment to financial policy and credit ratings, the Group will take actions to reduce leverage and create headroom for further selective acquisitions.
  • Unencumbered assets remain high at 69% (-1p.p. versus 2020) and net ICR stood at 4.8x (-0.6xversus 2020), well above financial policy guidelines.
  • CPIPG's total liquidity stood at more than €1.1 billion at the end of H1 2021.
  • During the first half of 2021, CPIPG repaid more than €750 million of senior unsecured bonds, Schuldschein and hybrid bonds callable or maturing in 2022, 2023 and 2024. CPIPG's weighted average debt maturity stood at 5.3 years as at H1 2021, versus 4.8 years at the end of 2020.

"CPIPG's H1 results reflect some temporary effects of COVID-19, but our business continues to grow," said David Greenbaum, CFO. "We are excited to move on from COVID-19 and see a bright future ahead."

Notable events occurring after 30 June 2021 include:

Globalworth joint venture with Aroundtown

On 14 April 2021, CPIPG formed a consortium with Aroundtown SA ("Aroundtown") and announced a cash offer through Zakiono Enterprises Limited ("Zakiono") for the entire issued share capital of Globalworth Real Estate Investments Limited ("Globalworth"). CPIPG and Aroundtown together held more than 51% of Globalworth's issued share capital prior to the launch of the tender offer. The offer closed on 23 July 2021, at which point Zakiono had received valid acceptances in respect of approximately 9.24% of Globalworth. Therefore, upon conclusion of the offer, the consortium owned 60.63% of Globalworth shares.

Strategic partnership with DeA Capital in Italy

On 5 August 2021, a framework agreement was signed between CPIPG, certain companies of the DeA Capital Group ("DeA Capital") and Nova RE SIIQ S.p.A. ("Nova RE"). CPIPG is the majority owner of Nova RE, which is an Italian SIIQ (REIT) listed on the Milan Stock Exchange. DeA Capital is the leading independent platform for alternative asset management in Italy, with combined AUM of nearly €25 billion including more than €10 billion invested in real estate. The framework agreement includes a plan to transform Nova RE into Italy's leading SIIQ and prepare Nova RE for a near-term primary offering of up to €1 billion. DeA Capital Real Estate SGR S.p.A. is Nova RE's exclusive external asset management advisor and will provide a broad range of services to enhance the investment, financial and operational capabilities of Nova RE. In connection with the framework agreement, DeA Capital also agreed to purchase approximately 1.1 million shares (about 5%) of Nova RE from CPIPG.

Actions to support our financial policy

CPIPG intends to take actions immediately and in the future to preserve and recharge our financial strength after periods of acquisition activity. Near-term actions include:

  • Radovan Vitek, the Group's majority shareholder, has agreed to participate in an intended issuance of new ordinary shares by CPIPG for up to €500 million, with the first €100 million expected in September
  • The Group has received offers well above book value for certain high-quality properties. Considering CPIPG's strategic vision and long-term priorities, the board of directors recently approved an intention by CPIPG to complete up to €1 billion of disposals in the next 6 to 12 months, subject to pricing. Sale proceeds would be redeployed via new strategic acquisitions and debt repayment.
  • In Q4 2021 or early 2022, CPIPG intends to complete the aforementioned primary offering of €1 billion by Nova RE, our listed Italian subsidiary, in partnership with DeA Capital, a leading Italian asset manager.

CPIPG recognises that improving our "BBB" credit ratings will require the Group to follow through on these actions while continuing to deliver strong business performance. At the appropriate times, CPIPG will also continue to support our capital structure and debt maturity profile through selective debt refinancing and utilisation of hybrid capital.

Disposal of a property in Ettlingen, Germany

On 31 August 2021, CPIPG's subsidiary GSG Berlin successfully completed the sale of a non-core asset in Ettlingen, Germany for nearly €32 million. The property is an industrial production unit in the wider Stuttgart area, and the sale price was almost 10% above book value.

Half-year results webcast

CPIPG will host a webcast in relation to its financial results for the six-month period ended 30 June 2021. The webcast will be held on Tuesday 7 September 2021 at 11:00am CET / 10:00am UK.

Please register for the webcast in advance via the link below:

https://webcasting.brrmedia.co.uk/broadcast/611ba148c97de6636c2d9725

FINANCIAL HIGHLIGHTS

Performance

30-Jun-2021

30-Jun-2020

Change

Gross rental income

€ million

188

173

8.8%

Net rental income

€ million

175

164

6.9%

Net hotel income

€ million

(4)

(5)

17.5%

Total revenues

€ million

300

291

3.2%

Net business income

€ million

178

168

5.8%

Consolidated adjusted EBITDA

€ million

172

164

4.8%

Funds from operations (FFO)

€ million

127

115

10.5%

Net profit for the period

€ million

253

2

11,381%

Assets

30-Jun-2021

31-Dec-2020

Change

Total assets

€ million

12,586

11,801

6.7%

Property portfolio

€ million

11,246

10,316

9.0%

Gross leasable area

sqm

3,725,000

3,636,000

2.4%

Occupancy

%

92.6

93.7

(1.1 p.p.)

Like-for-like gross rental growth*

%

1.9

0.8

1.1 p.p.

Total number of properties**

No.

352

343

2.6%

Total number of residential units

No.

11,930

11,929

0.0%

Total number of hotel rooms***

No.

6,850

6,753

1.4%

  • Based on headline rent, excluding one-time discounts
  • Excluding residential properties in the Czech Republic
  • Including hotels operated, but not owned by the Group

Financing structure

30-Jun-2021

31-Dec-2020

Change

Total equity

€ million

6,044

5,787

4.4%

EPRA NRV (NAV)

€ million

5,265

5,118

2.9%

Net debt

€ million

4,716

4,194

12.4%

Net Loan-to-value ratio (Net LTV)

%

41.9

40.7

1.2 p.p.

Net debt/EBITDA

13.7x

12.4x

1.3x

Secured consolidated leverage ratio

%

12.3

12.0

0.3 p.p.

Secured debt to total debt

%

28.9

29.0

(0.1 p.p.)

Unencumbered assets to total assets

%

69.0

70.0

(1.0 p.p.)

Net ICR

4.8x

5.4x

(0.6x)

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT*

Six-month period ended

(€ million)

30 June 2021

30 June 2020

Gross rental income

188.1

172.8

Service charge and other income

62.4

60.5

Cost of service and other charges

(48.8)

(44.1)

Property operating expenses

(26.5)

(25.2)

Net rental income

175.2

164.0

Development sales

12.0

8.8

Development operating expenses

(9.8)

(8.1)

Net development income

2.2

0.7

Hotel revenue

15.7

19.8

Hotel operating expenses

(19.6)

(24.6)

Net hotel income

(3.9)

(4.8)

Other business revenue

22.2

29.3

Other business operating expenses

(17.9)

(21.1)

Net other business income

4.3

8.2

Total revenues

300.4

291.2

Total direct business operating expenses

(122.6)

(123.1)

Net business income

177.8

168.1

Net valuation gain (loss)

222.0

(11.0)

Net gain on disposal of investment property and subsidiaries

0.5

0.6

Amortization, depreciation and impairment

(10.6)

(54.9)

Administrative expenses

(24.5)

(24.9)

Other operating income

2.9

3.9

Other operating expenses

(3.1)

(2.3)

Operating result

365.0

79.5

Interest income

11.3

8.9

Interest expense

(47.3)

(38.8)

Other net financial result

(22.1)

(6.0)

Net finance costs

(58.1)

(35.9)

Share of gain (loss) of equity-accounted investees (net of tax)

3.3

(14.9)

Profit before income tax

310.2

28.7

Income tax expense

(56.8)

(26.5)

Net profit from continuing operations

253.4

2.2

* The presented financial statements do not represent a full set of interim financial statements as if prepared in accordance with IAS 34

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CPI Property Group SA published this content on 30 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 August 2021 21:41:03 UTC.