TAG Immobilien AG: Strong operating business performance in the second quarter of 2022 for TAG Immobilien AG across all metrics. LTV reduced below 45% through capital increase in July 2022

DGAP-News: TAG Immobilien AG / Key word(s): Half Year Results/Quarterly / Interim Statement
TAG Immobilien AG: Strong operating business performance in the second quarter of 2022 for TAG Immobilien AG across all metrics. LTV reduced below 45% through capital increase in July 2022
23.08.2022 / 06:55
The issuer is solely responsible for the content of this announcement.

PRESS RELEASE

 

Strong operating business performance in the second quarter of 2022 for TAG Immobilien AG across all metrics. LTV reduced below 45% through capital increase in July 2022

 

  • FFO I at EUR 48.5m in Q2 2022 and at EUR 96.2m in H1 2022 (+5.1% vs. H1 2021)
  • Total l-f-l rental growth in Q2 2022 of 2.0% p.a. (Q1 2022: 1.5% p.a.) and vacancy in residential units down to 5.2% in June 2022 vs. 5.7% in March 2022
  • Periodic revaluation of the real estate portfolio as at 30 June 2022 leads to semi-annual valuation uplift of 4.0%
  • LTV of 47.0% at 30 June 2022 and of 44.5% pro forma including the effects from the EUR 202m capital increase in July 2022
  • NTA per share of EUR 25.17 at 30 June 2022 (EUR 22.11 pro forma after capital increase)
  • Rental business in Poland to gain weight in the next quarters; capex requirements for the operating business in Poland until YE 2023 materially reduced
  • Guidance for FY 2022 confirmed; per share metrics adjusted to new number of shares following the capital increase

 

Hamburg, 23 August 2022

 

Key operating figures and earnings trend

Despite a challenging macroeconomic environment, TAG Immobilien (TAG) successfully continued its positive operating performance in the first half of 2022. FFO I (funds from operations excluding net income from sales and excluding the result from operations in Poland) increased to EUR 48.5m in Q2 2022 compared to EUR 47.8m in Q1 2022 and EUR 45.9m in Q2 2021. Considering the entire first half of 2022, FFO I amounted to EUR 96.2m compared to EUR 91.5m in the same period of the previous year, which corresponds to an increase of 5.1%.

Like-for-like rental growth amounted to 1.5% p.a. in Q2 2022 and to 2.0% p.a. including effects from vacancy reduction. Vacancy in the Group's residential units declined to 5.2% in Q2 2022, from 5.7% in March 2021 and 5.5% at the beginning of the year. After the reporting date, the vacancy rate was further reduced and is currently only around 5.0% in August 2022.

TAG continued to perform a valuation of its real estate portfolio on a semi-annual basis. Based on the 30 June 2022 valuation, the total valuation gain was EUR 273m (of which EUR 256m relates to the portfolio in Germany and EUR 17m to the portfolio in Poland, which is still being developed), corresponding to a valuation uplift of 4.0% in the first half of 2022, following 5.2% H1 2021. As a result, TAG's portfolio in Germany is now valued at around EUR 1,270 per sqm, with gross initial yield at 5.1%.

The loan-to-value (LTV) ratio was 47.0% as at 30 June 2022 compared to the year-end 2021 LTV level of 43.2%. Following the EUR 202m capital increase completed post the reporting date in July 2022, LTV has been reduced on a pro forma basis to 44.5%, which is already below the LTV target of c. 45%.

EPRA NTA per share slightly decreased to EUR 25.17 at 30 June 2022 from EUR 25.54 at 31 December 2021, reflecting the dividend payment of EUR 0.93 per share made in May 2022. Pro-forma the capital increase in July 2022 (c. 29m new shares issued at EUR 6.90 per share) EPRA NTA per share stood at EUR 22.11.

 

Update on Poland operations and materially reduced capex requirements

Amid the ongoing war in the Ukraine, disruptions in global supply chains as well as elevated financing costs, TAG has successfully navigated its operations in Poland and adapted to the new business environment.

The results from operations in Poland amounted to EUR 5.1m in H1 2022 compared to EUR 4.5m in H1 2021. Following the first-time consolidation of ROBYG S.A. at 31 March 2022, TAG expects a strong increase of this result in the second half of the year as the majority of the apartments will be handed over in the third and fourth quarter 2022. Nearly all of these apartments (c. 97% as of 31 July 2022) have been sold already.

In the past months, more than five million Ukrainians have fled to Poland, of which a major part is expected to remain in Poland for the medium to long term. Thus, TAG expects a further growing demand for housing in particular in urban agglomerations such as Warsaw and other major Polish cities. In addition to the c. 500 rental apartments that are already on the market, with a vacancy rate in June 2022 of only 0.6% and an average rent per sqm of more than 10% above the planned level at the start of the renting activities, further rental units will be completed in the next quarters to arrive at a rental portfolio in Poland of c. 2,000 units at YE 2022 and of c. 3,000 units at YE 2023.

In the last weeks, TAG has calibrated the development pipeline in Poland to currently prioritise the build-to-sell assets, thereby generating cash inflows from apartment pre-sales, which counterbalances construction costs for rental apartments. Given the flexibility in the pipeline’s building schedule, the majority of the build-to-hold projects has been shifted backwards into subsequent years. As a result, the capex requirements (net financing needs by TAG) for the operating business in Poland until YE 2023 have been materially reduced to only EUR 50m to EUR 75m in total. This includes all development costs for rental units, which are currently under construction.

 

EUR 202m rights issue completed in July 2022 and other refinancing activities

On 26 July 2022, TAG announced the successful completion of its capital increase with subscription rights resolved on 8 July 2022 with gross proceeds of EUR 202m and a take-up ratio of 97.7%. With the help of the proceeds from the rights issue and by using existing cash, the bridge facility for the ROBYG acquisition was already reduced from EUR 650m at 30 June 2022 to EUR 310m in July 2022. Furthermore, the maturity of the bridge facility has been extended until January 2024.

The repayment of the remaining amount of EUR 310m is planned to be financed mainly from targeted disposals of residential units in Germany in H2 2022. Additionally, TAG has already started early refinancing activities regarding mortgage secured German bank loans, originally maturing in FY 2023, and expects additional liquidity from these refinancing of c. EUR 120-140m in Q3/Q4 2022.

“Following intensive discussions held in the recent weeks, we highly appreciate the level of support and trust displayed by our shareholders. This capital increase, structured as a rights issue to best address the interests of existing shareholders, was not an easy decision and has been executed in a challenging market environment. Nevertheless, it was an important step for our refinancing plans regarding the ROBYG acquisition and to strengthen our equity base”, says Martin Thiel, CFO of TAG.

 

Guidance for FY 2022 confirmed; per share metrics adjusted to new number of shares following the capital increase

Based on the good operational development in H1 2022, the forecasts for FY 2022 in absolute amounts remain unchanged:

  • FFO I: EUR 188m to EUR 192m (c. +4.5% year-on-year)
  • FFO II : EUR 247m to EUR 253m (c. +32.5% year-on-year)
  • Dividend for FY 2022 (75% of FFO I, based on the midpoint of this forecast):
    EUR 142.5m (c. +4.5% year-on-year)

As a result of the capital increase in July 2022, the number of shares issued increased by 28,990,260 to 175,489,025 shares. Hence, an adjustment of the forecasts on a per share basis is necessary:

  • FFO I per share: EUR 1.20, previously EUR 1.30 (c. -3.2 % year-on-year)
  • FFO II per share: EUR 1.58, previously EUR 1.71 (c. +22.5 % year-on-year)
  • Dividend per share: EUR 0.81, previously EUR 0.98 (c. -13.0% year-on-year)

The weighted number of shares for the 2022 financial year used to forecast FFO I and FFO II per share is 158,711,763. The current number of shares of 175,489,025 was used for the forecast of the dividend per share

Further details on the second quarter of 2022 can be found in the interim statement published today and in the presentation at www.tag-ag.com/investor-relations.


Overview of key financials

Income statement key figures (in EUR millions)  01/01-06/30/2022  01/01-06/30/2021
Net actual rent 169.1 166.0
EBITDA (adjusted) 117.6 114.2
Consolidated net income 301.8 324.1
FFO I per share in EUR 0.66 0.62
FFO I 96.2 91.5
AFFO per share in EUR 0.42 0.42
AFFO 62.0 61.9
FFO II per share in EUR 0.69 0.66
FFO II 100.6 96.8
Balance sheet key figures (in EUR millions)  06/30/2022 12/31/2021
Total assets 8,582.3 7,088.6
LTV in % 47.0% 43.2%
EPRA Net Tangible Assets (NTA) per share in EUR 25.17 25.54
Portfolio data 06/30/2022 12/31/2021
Units Germany 87,314 87,576
GAV (real estate assets in total) 7,817.1 6,735.1
GAV Germany (real estate assets)  6,670.4 6,387.4
GAV Poland (real estate assets) 1,146.7 347.7
Vacancy in % (total Germany) 5.5% 5.7%
Vacancy in % (residential units Germany) 5.2% 5,5%
l-f-l Rental growth in % Germany 1.5% 1.5%
l-f-l Rental growth in % (incl. vacancy reduction) Germany 2.0% 1.3%

 

Press enquiries

TAG Immobilien AG

Dominique Mann

Head of Investor & Public Relations

Phone +49 (0) 40 380 32 305

Fax +49 (0) 40 380 32 390

ir(at)tag-ag.com



23.08.2022 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de


Language:English
Company:TAG Immobilien AG
Steckelhörn 5
20457 Hamburg
Germany
Phone:040 380 32 0
Fax:040 380 32 388
E-mail:ir@tag-ag.com
Internet:www.tag-ag.com
ISIN:DE0008303504
WKN:830350
Indices:MDAX
Listed:Regulated Market in Frankfurt (Prime Standard), Munich; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Stuttgart, Tradegate Exchange
EQS News ID:1425621


 
End of NewsDGAP News Service

show this