TAG Immobilien AG significantly increased its operating result in Q4 2015 and achieved an FFO of EUR 76.3 million
DGAP-News: TAG Immobilien AG / Key word(s): Preliminary Results
TAG Immobilien AG significantly increased its operating result in Q4 2015 and achieved an FFO of EUR 76.3 million or EUR 0.62 per share for the full year 2015. Vacancy was reduced markedly since September 2015, from 8.4% to 7.5% at the end of the year.
- Funds from Operations (FFO I) reached EUR 76.3 million or EUR 0.62 per share for the full year 2015. FFO increase in Q4 2015 to EUR 20.7 million after EUR 19.0 million in the previous quarter
- LTV reduced to 60.7% at year-end, or 62.7% including liabilities from convertible bonds
- Capital recycling strategy a success: selective disposals in high-priced markets followed by reinvestment of proceeds into residential portfolios with attractive returns
- FFO guidance for FY 2016 of around EUR 84.0 million to EUR 85.0 million, or approximately EUR 0.67 per share, and dividend forecast of EUR 0.55 per share confirmed
Hamburg (25 February 2016) - TAG Immobilien AG ('TAG' in the following) today published preliminary results from its IFRS consolidated financial statements for the 2015 financial year. The strong operating result is driven by successes in the rental business as well as profits from the sale of residential real estate. Improvements in operational indicators show that TAG's capital recycling strategy continues to pay off. The portfolio was expanded from around 72,500 units at the beginning of the year to around 78,000 units at 31 December 2015 and currently close to 80,000 units.
Positive development of all operational Group performance indicators
The Group's total rental revenues increased from EUR 257.4 million to EUR 259.3 million at year-end 2015, resulting in increased net rental income of EUR 211.7 million (previous year: EUR 209.5 million). With a margin that is now close to 82%, this demonstrates the portfolio's increased operating profitability. New rentals increased across the Group, so that vacancy in the residential units - not including acquisitions during the 2015 fiscal year - fell to 7.5% at year-end after 9.0% at the beginning of the year. In Salzgitter, vacancy was reduced by 3.4 percentage points within 12 months, from 15.5% to 12.1%. The Group's rental growth on a like-for-like basis was 1.6% per annum, or 3.3% per annum including the effects from the vacancy reduction. So compared to last year (1.2% per annum and 2.1% per annum), there were substantial increases here as well.
At EUR 175.1 million, the Group's earnings before taxes (EBT) were well above the previous year's EBT of EUR 83.1 million. This increase is partly due to valuation gains on investment properties totalling EUR 98.9 million (previous year: EUR 46.8 million). Finally, net financial income also improved year-on-year, from EUR -118.0 million to EUR -96.0 million.
The Group's consolidated net income in 2015 rose from EUR 29.0 million in the previous year to EUR 147.3 million. FFO I (funds from operations) as an indicator of operating profitability in the rental business amounted to EUR 76.3 million in 2015 (previous year EUR 74.5 million) or EUR 0.62 per share (previous year EUR 0.58).
The LTV (loan to value) ratio was reduced to 60.7% (excluding convertible bonds) or 62.7% including convertible bonds, after 62.2% and 65.3% respectively at 31 December 2014. Despite the dividend payment of EUR 0.50 per share in 2015, the NAV (Net Asset Value) per share increased to EUR 10.64 at the end of 2015, after EUR 10.10 at the end of the previous year.
Strategic focus on capital recycling systematically leads to value add
Since 2014, TAG has systematically taken advantage sales opportunities in high-priced regions. The sales prices achieved here, which averaged 19.4 times the current annual net rental income, are then reinvested into locations with development potential in northern and eastern Germany at significantly lower purchase prices averaging 10.0 times the annual net rent. In 2015, TAG sold about 1,900 units, and simultaneously acquired approx. 5,300 residential units with higher initial returns.
FFO and dividend forecast 2016 confirmed
In November 2015, the forecast for the full year in relation to FFO I was adjusted to between EUR 74 million and EUR 75 million, or EUR 0.60 per share. This projection has now been exceeded with EUR 76.3 million or EUR 0.62 per share due to the strong performance in Q4 2015. In light of this development, we confirm our forecast for the 2016 financial year, in which we expect a significant increase in FFO to between EUR 84.0 million and EUR 85.0 million. Based on the current number of shares at 31 December 2015, this corresponds to an increase in FFO per share to approximately EUR 0.67.
For the 2015 financial year, an increase in the dividend to EUR 0.55 is planned, after a dividend payment of EUR 0.50 per share for 2014. The dividend is to be further increased to EUR 0.57 per share for the 2016 financial year.
Martin Thiel, CFO of TAG, says: "Our job is to further increase the return on our portfolio. We measurably and successfully do this by acquiring new residential portfolios and actively managing our existing assets. With the simultaneous sales, for example of our commercial property in Stuttgart, or selected portfolios in high-priced markets, we create high cash inflows for targeted growth. Given our strong operating business, we will be able to expand our already attractive dividend payments long-term. In accordance with our claim "Growing cash flows", we are improving the quality of our portfolios for our tenants, while also increasing the return on equity for our shareholders."
For further details, please refer to the presentation of preliminary results for 2015, posted today at http://www.tag-ag.com/investor-relations. TAG's annual report for the 2015 financial year will be published on 24 March 2016.
|Company:||TAG Immobilien AG|
|Phone:||040 380 32 0|
|Fax:||040 380 32 390|
|ISIN:||DE0008303504, XS0954227210, DE000A12T101|
|WKN:||830350, A1TNFU, A12T10|
|Listed:||Regulated Market in Frankfurt (Prime Standard), Munich; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Stuttgart; Terminbörse EUREX|
|End of News||DGAP News Service|