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EANS-News: Fair Value REIT-AG achieves a significant increase in earnings in the first nine months of the year and increases its overall forecast for 2010
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München (euro adhoc) - - Consolidated net income increased to EUR 4.1 million (previous year: EUR 2.4 million) - Forecast for 2010 as a whole increased: Expected consolidated net income at EUR 5.1 million (+21%) and FFO at EUR 3.3 million (+22%) - Dividend for 2010 of EUR 0.10 per share possible
Munich, November 15, 2010 - Fair Value REIT-AG has today announced the results for the first nine months of this financial year. According to these results, the Group achieved revenues of EUR 10.3 million compared with EUR 8.4 million in the same period last year. The Group´s net rental result amounted to EUR 7.1 million compared with EUR 6.1 million in the first nine months of the previous year. The positive changes in these key indicators mainly result from the first time inclusion of the revenues of a subsidiary which was not fully consolidated and thus were included in the income from participations in the previous year because of the lower shareholding at the time.
The operating result, at EUR 5.3 million, was around EUR 1.4 million (+ 36%) above the figure for the previous year. Here too, the increase mainly results from the first time inclusion of the revenues of the aforementioned subsidiary. On a like-for-like basis, i.e. without the subsidiary and adjusted for the proportionate income from the four properties already sold in the first half of 2010, there would be a 6% rise in the operating result at EUR 3.6 million compared with EUR 3.4 million in the previous year.
There has also been a significant increase in the results from associated companies, which made a contribution of EUR 3.4 million in the first nine months of this financial year compared with EUR 2.3 million in the same period last year. The increase mainly resulted from a lower valuation loss on real estate.
In the first nine months of this financial year, Fair Value REIT-AG achieved an operational cash flow (so-called "Funds from Operations", FFO) of EUR 3.1 million or EUR 0.33 per share. The rise compared with the amount in the same period last year (EUR 2.2 million) is based on cost savings at a Group level as well as higher cash inflows from associated companies.
In the reporting period, the Group significantly improved the consolidated net income to EUR 4.1 million (same period last year: EUR 2.4 million). Consequently, the earnings per share amount to EUR 0.44 compared with EUR 0.25 in the same period last year.
On the balance sheet date, the Group equity totalled EUR 74.6 million (December 31, 2009: EUR 72.7 million). Consequently the balance sheet net asset value of EUR 7.78 per share in circulation increased to EUR 8.00 per share. With the inclusion of minority interests, the equity ratio increased in accordance with Section 15 REITG to 48.6% of the immovable assets (December 31, 2009: 45.5%). The EPRA-NAV, which reflects the real estate equity, improved from EUR 8.72 to EUR 9.17 per share.
Frank Schaich, Management Board of the company, is pleased about the positive business development of the Fair Value Group: "The occupancy rate for our proportionate overall portfolio, at 93.6%, was only slightly below the level for the previous year as a result of active and successful leasing business, the average remaining term of lease agreements also remained practically unchanged at 6.3 years. Consequently, because of this and cost savings, we have already almost achieved our targets for the whole year in the first nine months."
Because of the significantly higher IFRS consolidated net income in the reporting period, the Management Board has increased the forecast for the adjusted IFRS consolidated net income before market value changes in real estate and interest derivatives (EPRA earnings) for 2010 as a whole from the previous figure of EUR 4.2 million (EUR 0.45 per share) to the current figure of EUR 5.1 million or EUR 0.55 per share. The same also applies to the expected Funds from Operations (FFO), which was increased from the previous figure of EUR 2.7 million (EUR 0.29 per share) to EUR 3.3 million or EUR 0.35 per share.
With regard to the Company´s non-consolidated financial statements for 2010 which are relevant to dividends in accordance with German commercial law, the Management Board is expecting, as intended, a net income which will enable a dividend of EUR0.10 per share to be paid in 2011 with a payout ratio of 90% in compliance with the German REIT Act. This expectation assumes that extraordinary current-value depreciation on real estate and participations in line with market developments will not occur.
A complete overview of the current business developments is provided in the interim report for the first nine months of 2010 which is available from today at www.fvreit.de in the Investor Relations section.
Selected key financial indicators for Fair Value REIT-AG
1.1. - 1.1. - 30.9.2010 30.9.2009 Consolidated net income 4.1m EUR 2.4m EUR EPS 0.44 EUR 0.25 EUR Adjusted consolidated net profit 4.1m EUR 4.3m EUR (EPRA-Earnings) EPRA EPS 0.44 EUR 0.46 EUR FFO 3.1m EUR 2.2m EUR FFO per share in circulation 0.33 EUR 0.23 EUR 30.9.2010 31.12.2009 Balance sheet NAV per share 8.00 EUR 7.78 EUR EPRA NAV per share 9.17 EUR 8.72 EUR Equity ratio according to Section 15 REITG 48.6% 45.5% Company profile
Munich-based Fair Value REIT-AG focuses on the acquisition, leasing, property management and sale of commercial properties in Germany. Its investment activities focus primarily on retail, office and logistics properties in German regional centers. As a REIT, Fair Value is not subject to corporation or trade tax. Fair Value's USP is that - in addition to investing directly in real estate - it also acquires interests in real estate partnerships.
Fair Value currently participates in 13 closed-end real estate funds in a highly diversified portfolio of 44 properties with a total rental area of 401,000 m² and a market value of around EUR 471 million as of December 31, 2009 (Fair Value's share of this portfolio totaled around EUR 186.1 million on September 30, 2010).
Fair Value further directly owns a portfolio of 32 commercial properties in Schleswig-Holstein. These have a rental area of around 43,000 m² and are mostly used as bank branches. These properties had a total market value of around EUR 45.5 million as of December 31, 2009.
On September 30, 2010, the proportion of the entire portfolio due to Fair Value had a market value of around EUR 231.6 million. As of September 30, 2010, this proportionate portfolio was 93.6% let in terms of the achievable annual rent of EUR 20.2 million. The rental agreements had a weighted remaining term of 6.3 years on September 30, 2010. Around 44% of the potential rent stems from retail facilities, 41% from offices, 9% is from logistics facilities and 6% from other facilities.
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