DGAP-News: CPI PROPERTY GROUP / Key word(s): Half Year Results CPI PROPERTY GROUP publishes half-year financial results for 2021 2021-08-31 / 23:45 The issuer is solely responsible for the content of this announcement.
CPI Property Group (société anonyme) 40, rue de la Vallée L-2661 Luxembourg 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 EUR11.2 billion (up 9% versus 2020) as the Group completed EUR580 million of acquisitions and benefited from a EUR317 million increase in the fair value of residential, landbank and office assets along with FX movements.
- Total assets reached EUR12.6 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-time COVID-19 discounts, which amounted to about 4% of gross rental income. Office and residential collections were close to 100%.
- Net rental income increased to EUR175 million (up 7% versus H1 2020) and consolidated adjusted EBITDA rose to EUR172 million (up 5% versus H1 2020) due to the contribution from recent acquisitions and developments, broadly stable occupancy at 92.6%, limited COVID-19 rent discounts and 1.9% like-for-like growth in gross rental income.
- Because of effective cost control, the hotel segment reported only a small net loss (-EUR4 million) despite hotels being closed for much of the period. As the COVID-19 situation 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 EUR178 million) and FFO (up 10% versus H1 2020 to EUR127 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 EUR5.3 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% (-1 p.p. versus 2020) and net ICR stood at 4.8x (-0.6x versus 2020), well above financial policy guidelines.
- CPIPG's total liquidity stood at more than EUR1.1 billion at the end of H1 2021.
- During the first half of 2021, CPIPG repaid more than EUR750 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 EUR25 billion including more than EUR10 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 EUR1 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 EUR500 million, with the first EUR100 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 EUR1 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 EUR1 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 EUR32 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 EUR million 188 173 8.8%
Net rental income EUR million 175 164 6.9%
Net hotel income EUR million (4) (5) 17.5%
Total revenues EUR million 300 291 3.2%
Net business income EUR million 178 168 5.8%
Consolidated adjusted EBITDA EUR million 172 164 4.8%
Funds from operations (FFO) EUR million 127 115 10.5%
Net profit for the period EUR million 253 2 11,381%
Assets 30-Jun-2021 31-Dec-2020 Change
Total assets EUR million 12,586 11,801 6.7%
Property portfolio EUR 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 EUR million 6,044 5,787 4.4%
EPRA NRV (NAV) EUR million 5,265 5,118 2.9%
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