TAG Immobilien AG achieved strong operating results with FFO in the first nine months of EUR 48.6 million and issues FFO guidance of EUR 90 million for 2014

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

07.11.2013 / 07:30


TAG Immobilien AG achieved strong operating results with FFO in the first nine months of EUR 48.6 million and issues FFO guidance of EUR 90 million for 2014

- Funds from Operations (FFO I) at EUR 48.6 million.

- Vacancy in the residential portfolio drops to 9.0%

- Rental growth of 3.2% p.a.

- Refinancing leads to significant interest savings

- Balance sheet optimisation and interest savings through buyback and cancellation of convertible bonds

- FFO guidance of EUR 90 million for 2014

Hamburg (07 November 2013) - In its results for the first nine months of 2013, TAG Immobilien AG ('TAG' in the following) demonstrated its operational profitability, particularly in the residential portfolio. The continued successful reduction in vacancy, along with rent increases and cost savings from newly signed refinancing will also have an effect on results during the course of the present year, and increasingly from 2014. The company's balance sheet was further optimised with the buyback and cancellation of convertible bonds, financed by the issuance of a bond, which also reduces dilution for shareholders. The Group financials at the end of the third quarter of 2013 substantiate the positive forecast for 2014.

Total revenues again rose significantly year-on-year, from EUR 179.4 million to EUR 307.6 million at the end of September 2013. Rental revenues increased from EUR 139.8 million in the first nine months of 2012 to EUR 188.0 million in 2013. This results in net rental income of EUR 149.5 million (previous year: EUR 107.5 m), and with a margin of close to 80% demonstrates the portfolio's operational profitability. New rentals increased across the Group, further improving residential sector vacancy from 9.9% at year-end to 9.0%. Particularly noteworthy is the continued improvement in Salzgitter where the vacancy rate is 19.2% and was significantly reduced again compared to the end of the first quarter of 2013 (20.8%). Actual rents per square metre were increased from EUR 4.99 to EUR 5.03 in the last three months, which represents growth of about 0.8% for the quarter, or 3.2% on an annualised basis.

The Group's earnings before taxes (EBT) amounted to EUR 38.6 million in the first nine months of 2013. Net interest income during Q3 2013 amounted to EUR -76.4 million, against the backdrop of the company's strong growth in 2012 and the repurchase of convertible bonds to minimise dilution effects. Funds from operations (FFO I) are a key financial indicator of operational profitability, and at the end of September 2013 totalled EUR 48.6 million excluding sales - or EUR 100.7 million including cash income and cash flows from property sales.

Total assets - EUR 3.7 billion at 30 September 2013 - were almost unchanged compared to the end of 2012, and real estate volume at the end of the third quarter 2013 totalled EUR 3.6 billion. The equity ratio before minority interests is 29.8% and the loan-to-value (LTV) ratio is approximately 60.8% or 64.0% including outstanding convertible bonds. The NAV (net asset value) per share at the end of September 2013 was EUR 9.59 compared to EUR 9.96 at the end of 2012. This decrease is attributable to a dividend payment of EUR 0.25 in the second quarter and the repurchase of convertible bonds in the third quarter of 2013. At the same time, the latent dilutive effect of the outstanding convertibles were reduced by EUR 0.47 for the first half of the year to EUR 0.23, which is reflected in a 2-cent increase in diluted NAV per share.

Meanwhile, the repurchase of approximately one third of the convertible bonds by the end of Q3 2013 has helped to optimise the balance sheet structure while also representing significant interest savings. The funds required for the buyback were raised by issuing a five-year, EUR 200 million bond with a coupon of 5.125%.

The refinancing had ​​a significantly positive impact: over EUR 600 million in loans were refinanced or extended. This will result in annual interest savings of approximately EUR 10 million. The average interest rate on the Group's loans at 30 September 2013 is 3.77%, and the average term is around 10 years.

'The strategic and operational achievements and the successful integration of our acquisitions, in particular of TAG Wohnen (TLG Wohnen), are having a distinctly positive impact on our balance sheet and results. With approximately 68,000 units in our residential portfolio, we are very confident about the future. On the other hand, successful vacancy reduction, reasonable rent increases, and interest savings through favourable refinancing will continue to boost our cash flow and our results. We are well on track for achieving our FFO guidance of EUR 68 million this year. Due to this strong operational picture, TAG forecasts a significant increase in FFO excluding sales to EUR 90 million for the full year 2014. Our dividend policy of paying out about 75% of FFO I to our shareholders still applies, of course,' says TAG Immobilien AG CEO Rolf Elgeti.

For details, please refer to the report for the quarter ended 30 Sep 2013 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 32 300
Fax +49 (0) 40 380 32 388

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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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