DGAP-News: Fair Value REIT-AG / Key word(s): Final Results Fair Value REIT-AG records a substantial improvement in consolidated net income in 2014 according to final figures 26.03.2015 / 07:30 --------------------------------------------------------------------- Fair Value REIT-AG records a substantial improvement in consolidated net income in 2014 according to final figures - Final figures slightly better than preliminary results reported earlier - EBIT up 18% in 2014 to EUR 5.9 million - Consolidated net loss of EUR 0.05 million (previous year: consolidated net loss of EUR 5.2 million) - Funds from operations (FFO) of EUR 4.4 million (previous year: EUR 6.4 million) following property sales - Dividend proposal for 2014 of 53% of FFO (EUR 0.25 per share) - REIT equity ratio increases to 49.2% (previous year: 46.9%) Munich, March 26, 2015 - Fair Value REIT-AG today published its final figures for the financial year 2014. According to these figures, the operating result (EBIT) of EUR 5.9 million in the reporting period went up more strongly than anticipated in the preliminary figures published at the start of March 2015 (EUR 5.6 million). EBIT was therefore 18% up on the previous year figure of EUR 5.0 million. Consolidated net income also improved substantially over the financial year 2014 after deducting to minority interests in subsidiaries. The consolidated net loss was reduced by EUR 5.2 million to EUR 0.05 million following a consolidated net loss of EUR 5.2 million in the previous year. This improvement was also slightly higher than the preliminary figures. Earnings per share therefore came in at EUR -0.01, compared with EUR -0.56 in the previous year. The company continued to optimise its portfolio in the financial year 2014 and sold properties which were not considered as core holdings. On the back of the property sales made in 2013 and 2014, net rental income came in at EUR 17.6 million in the reporting period, some EUR 5.5 million down on the previous year figure but only slightly lower than the forecast total of EUR 17.8 million. At the same time, the valuation losses on real estate fell by 54% compared to the previous year. The valuation losses of EUR 7.5 million mainly concentrated on five properties and were around 60% due to upcoming letting costs at three properties and around 40% attributable to the reduction in contracted rents at two properties. A substantial reduction in interest expenses greatly contributed to an improved financial result. Net interest expenses totalled EUR 5.0 million, some 61% lower than the EUR 12.7 million reported in the previous year. The previous year figure contained one-off expenses for the cancellation and valuation of interest swaps totalling around EUR 4.0 million. Adjusted consolidated net income in accordance with EPRA (or funds from operations - FFO), totalled EUR 4.4 million or EUR 0.47 per share, some EUR 0.7 million short of the forecast figure of EUR 5.1 million. In 2013, this figure came in at EUR 6.4 million. The differences compared to the forecast and previous year largely resulted from property sales and therefore corresponding lower rental income in the past financial year. A further important part of the difference compared to the forecast figure stems from minority interests in the earnings of subsidiaries. On the balance sheet date, consolidated equity totalled EUR 78.3 million (December 31, 2013: EUR 80.7 million). This corresponds with a balance sheet net asset value (NAV) of EUR 8.39 per share in circulation (previous year: EUR 8.65). Taking into consideration the minority interests in subsidiaries of EUR 60.0 million, the equity ratio pursuant to Section 15 of the REIT Act rose to 49.2% of immovable assets totalling EUR 281 million (December 31, 2013: 46.9% of EUR 312 million). Retained earnings reported in the non-consolidated financial statements of Fair Value REIT-AG under the German Commercial Code (HGB) reached around EUR 2.3 million (previous year: around EUR 2.5 million). The Management Board is proposing to distribute these retained earnings in full. As in the previous year, this corresponds with a dividend of EUR 0.25 per share in circulation, or 53% of FFO. This therefore confirms the already communicated dividend target for the financial year 2014. The convertible bond issued in January 2015 totalling EUR 8.46 million is currently mainly being used for the acquisition of minority interests in subsidiaries. These investments increase the balance sheet NAV of Fair Value REIT-AG due to favourable investments. In addition, the company is planning to take over previously indirectly-held properties and add them to the directly-held portfolio. This will increase the FFO return per share due to savings in fund costs. Since the issue of the convertible bond, around 31% of the net proceeds have already been used for the acquisition of additional participations in subsidiaries. Around 6% of the minority shares of EUR 60.0 million were taken over in return for this amount as of December 31, 2014. The NAV growth to date from these acquisitions totals around EUR 0.12 per share. The Management Board is anticipating operating profits (FFO) for 2015 of between EUR 4.7 million and EUR 5.1 million. In relation to the shares currently in circulation, this corresponds with between EUR 0.50 and EUR 0.55 per share. This results in a forecast FFO return of between roughly 6.0% and 6.6% of the balance sheet NAV per share of EUR 8.39 as of December 31, 2014. The company plans to distribute at least 50% of these profits as a dividend. This corresponds with a dividend of between EUR 0.25 and EUR 0.27 per share currently in circulation for 2015. Frank Schaich, CEO of Fair Value REIT-AG, is optimistic: "Over and above our current investment activities, we are anticipating good opportunities for investments in office and retail properties with strong cash flows in secondary locations. We aim to actively use this market environment for the significant growth of Fair Value REIT-AG." The Annual Report with the full consolidated financial statements of Fair Value REIT-AG for the financial year 2014 and the non-consolidated financial statements 2014 pursuant to HGB are available from today in the Financial Reports section of www.fvreit.de. Selected financial key figures for Fair Value REIT-AG EUR thousand 2014 2013 Rental income 23,914 29,638 Net rental income 17,626 23,093 Operating result (EBIT) 5,877 5,012 IFRS-Net loss (47) (5.227) IFRS-Result per share (0.01) (0.56) EUR EUR EPRA-Earnings / FFO 4,402 6,405 FFO per share 0.47 EUR 0.69 EUR EUR 12/31/ 12/31/ 2014 2013 Net asset value per share 8.39 EUR 8.65 EUR EPRA-NAV per share 8.49 EUR 8.86 EUR Equity ratio within the meaning of section 15 of the 49.2 % 46.9 % REIT Act Contact Fair Value REIT-AG Frank Schaich Tel. +49 (0) 89-9292815-10 Fax +49 (0) 89-9292815-15 e-mail: [email protected] Corporate Profile Fair Value REIT-AG, based in Munich, focuses on the acquisition, leasing, property management and sale of commercial properties in Germany. At the core of its investment activities are retail and office properties in German regional centres. As of December 31, 2014, Fair Value's share of the total portfolio of 43 properties (previous year 49 properties) amounted to around EUR 281 million (previous year EUR 312 million). This portfolio had an occupancy rate of 91.5% (previous year 93.3%). As of December 31, 2014, the weighted remaining term of the leases was 5.0 years, unchanged to December 31, 2014. Around 52% of the potential rent relates to retail floor space, 37% to office space and 11% to other types of use. --------------------------------------------------------------------- 26.03.2015 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. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Fair Value REIT-AG Leopoldstraße 244 80807 München Germany Phone: +49 (0)89 9292 815-01 Fax: +49 (0)89 9292 815-15 E-mail: [email protected] Internet: www.fvreit.de ISIN: DE000A0MW975 WKN: A0MW97 Indices: RX REIT All Share Index, RX REIT Index Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 337567 26.03.2015