DO DEUTSCHE OFFICE AG
DO Deutsche Office AG / Key word(s): Half Year Results/Real Estate
2015-08-11 / 07:10
- Increase in Funds from Operations (FFO) by 17.5% to EUR 24.8 (H1/2014: 21.1) million.
- Financial result improved significantly: Decline of 44.0% to EUR -13.6 million compared to same period in the previous year.
- Debt reduction continues: Net-Loan-to-Value fell to 51.9% as of 30 June 2015 compared to 53.5% as of 31 December 2014.
- NAV per share at EUR 4.46, EPRA NAV per share at EUR 4.68.
- Solid letting results: letting performance in H1/2015 accounts for about 8.5% of the portfolio's total lettable area.
- Vacancy rate reduced to 15.9% as of June 30, 2015 compared to 19.4% as of 30 June 2014. By year end 2015 vacancy rate of 14 - 13% expected.
- Guidance for 2015 fiscal year specified: Based on rental income of EUR c107 million for full FY 2015, the Company expects FFO of EUR 52 million. Guidance thus has been specified from an original range of rental income of EUR 105 - 107 million and FFO of at least EUR 50 million.
Cologne 11 August 2015. DO Deutsche Office AG (Deutsche Office) has announced the results for the first half of the 2015 fiscal year and reports positive business development. With rental income of EUR 52.7 (H1/2014: 51.7) million, the Company generated net rental income of EUR 47.4 (H1/2014: 45.1) million in the first six months of 2015 fiscal year. As of the 30 June 2015, the Net-Loan-to-Value decreased once more and stood at 51.9% (31 December 2014: 53.5%). Significant improvements in financing terms as well as a reduction of debt improved the financial result by 44.0% to EUR -13.6 (H1/2014: -24.3) million.
Net profit in H1/2015 was EUR 27.2 (H1/2014: 97.9) million. The figures from the previous year included extraordinary effects from the merger with Prime Office REIT-AG.
The EPRA earnings - adjusted for one-off effects - came to EUR 23.7 (H1/2014: 20.6) million, surpassing the previous year by 15.6%.
Despite property sales, Deutsche Office increased funds from operations (FFO) by 17.5% in the H1/2015 thanks to an improved financial result, lower administrative costs and improved lease cashflow to EUR 24.8 (H1/2014: 21.1) million.
The Net Asset Value (NAV) increased as of 30 June 2015 despite the dividend distribution of EUR 27 million or EUR 0.15 per share to EUR 805.5 (31 December 2014: 803.0 million). As of 30 June 2015, the NAV per share was EUR 4.46 (31 December 2014: EUR 4.45). EPRA NAV per share adjusted for valuation and extraordinary effects was EUR 4.68 (31 December 2014: EUR 4.74) as of 30 June 2015.
Deutsche Office also generated solid letting results in H1/2015. The company managed to lease 76,700 m², or approximately 8.5% of total lettable area in the portfolio. New lease agreements in H1/2015 accounted for 28,500 m². Lease agreements were extended for a total area of approximately 48,200 m². The vacancy rate for the portfolio as of 30 June 2015 was 15.9% compared to 19.4% on 30 June 2014. By the end of 2015 a further reduction of the vacancy rate to approximately 14 - 13% is expected.
The Management Board has specified guidance for 2015 fiscal year. Based on the existing portfolio, Deutsche Office expects rental income of EUR c107 million and FFO of EUR 52 million. Guidance thus has been specified from an original range of rental income of EUR 105 - 107 million and FFO of at least EUR 50 million. Deutsche Office's plan to pay out a total dividend of between 50 and 60 percent of FFO for fiscal year 2015 remains unchanged.
On 16 June 2015, alstria office REIT-AG (alstria) announced its intention to issue a public takeover offer for all Deutsche Office shares. Alstria has entered into an agreement with funds managed by Oaktree Capital Management L.P. (Oaktree), where Oaktree was irrevocably obligated to transfer their holdings of up to 60.54% in Deutsche Office as part of the public takeover offer. Deutsche Office has taken note of the announcement from alstria. After release of the public takeover offer documentation, Deutsche Office will issue a reasoned statement on the intended transaction in accordance with Art. 27 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz)
On 23 July 2015, alstria shareholders held an extraordinary general meeting in Hamburg and passed the resolutions for the capital increase associated with the announced public exchange offer by alstria for all Deutsche Office shares with a majority of 99.71%.
As part of the publication of the results for H1/2015, the Executive Board is inviting analysts, investors, and journalists to attend a telephone conference on 11 August 2015 at 2:00 pm (CET). The quarterly report as well as a webcast of the telephone conference will be available on our homepage at www.deutsche-office.com.
Key Financials
| (in EUR million) | H1/2015 | H1/2014 |
Change in % |
| Rental income | 52.7 | 51.7 | 1.9 |
| Net rental income | 47.4 | 45.1 | 5.1 |
| Financial result | -13.6 | -24.3 | -44.0 |
| EPRA earnings | 23.7 | 20.6 | 15.6 |
| Funds from Operations (FFO) | 24.8 | 21.1 | 17.5 |
30/06/2015 | 31/12/2014 |
Change in % | |
| Investment Properties | 1,708.6 | 1,780.7 | -4.0 |
| Balance sheet total | 1,878.6 | 1,951.3 | -3.7 |
| Equity | 805.5 | 803.0 | 0.3 |
| Equity ratio (in %) | 42.9 | 41.2 | 4.1 |
| Net loan-to-value [LTV] (in %) | 51.9 | 53.5 | -3.0 |
| Net asset value (NAV) | 805.5 | 803.0 | 0.3 |
| NAV per share (in EUR) | 4.46 | 4.45 | 0.2 |
| EPRA-NAV per share (in EUR) | 4.68 | 4.74 | -1.3 |
* Due to corporate merger entered in the trade registry on 21 January 2014, the H1/2014 for Prime Office is only included in the figures for February to June 2014. Extraordinary income and loss resulting from the merger are also included, limiting the value of comparability.
Contact for corporate queries:
Richard Berg
Head of Investor Relations & Corporate Communications
Email rberg@deutsche-office.de
Telephone +49 (0)221 - 888 29 160
About Deutsche Office
Deutsche Office is a leading, SDAX index listed office property company, focusing on German metropolitan regions and conurbations. As at 30 June 2015, its geographically diversified real estate portfolio currently contains 49 properties held as investment properties, with a total rental area of about 866,000 square meters and an attractive and broad tenant base. As at 30 June 2015, the properties had a market value of about EUR 1.7 billion. Deutsche Office's business model is based on the profit-oriented, active asset management of office properties in German metropolitan regions, underpinned by investment to increase and to maintain the value of the properties in the portfolio. The strategy includes the acquisition of properties with potential for appreciation as well as exploiting sales opportunities applied throughout the entire property cycle in order to capitalise the appreciation achieved and to invest in new properties.
Additional information on Deutsche Office is available online at:
http:\deutsche-office.com
2015-08-11 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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