TAG Immobilien AG:

TAG Immobilien AG / Key word(s): Quarter Results

08.05.2014 / 07:31


TAG Immobilien AG achieves good operating results and generates FFO of EUR 20.7 million in first quarter of 2014.

- Strategic discontinuation of the commercial real estate segment and complete focus on the residential segment

- Further successes in reducing vacancy and growing rents and rental income

- EUR 90 million FFO forecast for 2014 reconfirmed

- Planned dividend payment of EUR 0.35 for 2014 and EUR 0.50 for 2015

Hamburg (8 May 2014) - TAG Immobilien AG ("TAG") was able to manifest its focus on the residential segment in the first quarter of 2014 by selling virtually its entire commercial division. In parallel, the operating profitability developed according to plan positively. Rents were increased further and vacancy in the core inventory was reduced. Going forward, the newly acquired portfolios of approximately 7,000 units in eastern Germany will be integrated during the year 2014 and will also increase TAG's results. At 31 March 2014, the residential portfolio is comprised of approx. 70,000 units.

Total rental revenues increased from EUR 63.2 million in the first quarter of 2013 to EUR 65.1 million in Q1 2014. In regards to the continuing operations, which is almost completely comprised of residential real estate, rental revenues increased from the previous year's EUR 57.9 million to EUR 60.1 million. This results in total rental income of EUR 54.0 million, up significantly from EUR 49.6 million the previous year (+9 %). In the continuing operations, the rise in rental income, from EUR 45.2 million to EUR 49.8 million, was in fact 10%. As in the previous quarters, net rental profit increased more strongly than rental income, which demonstrates the continuous improvement in TAG's cost structure.

Group-wide vacancy in the residential sector was kept stable and was 8.9 % at year-end, although the new portfolio acquired in December 2013 had a much higher vacancy rate than the Group average (12.6%). It is worth noting that the vacancy rate in Salzgitter was reduced by another 0.6% points since the end of 2013, to 18.0% at the end of Q1 2014. Average actual net rent per square meter in the Group's residential portfolio also increased slightly, to EUR 5.06 at the end of the quarter (EUR 5.04 at year-end), though no significant rent increases were made in the inventory in the first few months of the year. This underscores the success of active rental and asset management in the portfolio and corresponds to organic growth of about 0.5 % in the quarter, or 2% on an annualized basis.

Earnings before taxes (EBT) came to EUR 8.2 million across the Group in Q1 2014, after EUR 11.3 million in the same period last year. At EUR -25.0 million, net interest income in Q1 2014 was approx. on par with that of the previous year (EUR -23.8 million). Net profit as of the end of the first quarter 2014 was EUR 7.9 million (previous year: EUR 14.1 million).

First-quarter Funds from Operations (FFO) as the indicator of operating performance profitability were EUR 20.7 million in Q1 2014 excluding sales (FFO I) - or EUR 24.3 million including liquidity from property sales (FFO II). The AFFO, or FFO I minus investments made into the portfolio, was EUR 12.8 million.

The balance sheet total at 31 March 2014 was EUR 3.821 billion as compared to EUR 3.764 billion at year-end 2013. Parallel to this, the real estate volume at the end of Q1 2014 is EUR 3.615 billion. Equity ratio before minority interests is 29.2%, and the LTV (Loan to Value) ratio is 62.2 %, both virtually unchanged from the end of the year. The NAV (Net Asset Value) per share increased slightly from EUR 9.45 at year-end 2013 to EUR 9.55 at the end of Q1 2014.

At the strategic level, a complete focus on the residential segment was achieved through the sale of TAG Gewerbeimmobilien GmbH in late March. The sale will be completed in the second quarter of 2014.

"With this strong operational start to the year, we are well on our way to achieving our FFO forecast of EUR 90 million. Our first-quarter figures show that our profitability and efficiency are improving at all levels. This operational strength and stability enables us to propose a dividend of EUR 0.35 at the upcoming Annual General Meeting in June, and plan for a dividend of EUR 0.50 next year," said Martin Thiel, Chief Financial Officer of TAG Immobilien AG.

For more details, please refer to the quarterly report to 31 Mar 2014, published today, at http://www.tag-ag.com/investor-relations/finanzberichte/quartalsberichte/.

Press enquiries:
TAG Immobilien AG
Head of Investor & Public Relations
Dominique Mann
Phone +49 (0) 40 380 32 0
Fax +49 (0) 40 380 32 390

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Company:TAG Immobilien AG
Steckelhörn 5
20457 Hamburg
Phone:040 380 32 0
Fax:040 380 32 390
ISIN:DE0008303504, XS0954227210
WKN:830350, A1TNFU
Listed:Regulierter Markt in Frankfurt (Prime Standard), München; Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, Stuttgart
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