10.11.2016
TAG Immobilien AG DE0008303504
DGAP-News: TAG Immobilien AG increases FFO for Q3 2016 to EUR 25.0m and NAV per share to EUR 11.34
DGAP-News: TAG Immobilien AG / Key word(s): 9-month figures/Interim Report
TAG Immobilien AG increases FFO for Q3 2016 to EUR 25.0m and NAV per share
to EUR 11.34
10.11.2016 / 07:00
The issuer is solely responsible for the content of this announcement.
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PRESS RELEASE
TAG Immobilien AG increases FFO (Funds from Operations) for Q3 2016 to EUR
25.0m and NAV (Net Asset Value) per share to EUR 11.34
- Vacancy in residential units reduced by 1.7 percentage points over past
twelve months to 6.7% in September 2016
- Like-for-like rental growth at 1.9% p.a. or 3.8% p.a. including the
effects of vacancy reduction
- NAV per share increases to EUR 11.34 following revaluation gain of EUR
159.3m in Q3 2016
- Loan to Value (LTV) ratio drops to 56.9% at 30 September 2016,
- FFO guidance for 2017 at EUR 104m to EUR 106m or EUR 0.74 per share
(2016 guidance unchanged at EUR 92m to EUR 93m or EUR 0.68 per share)
- Dividend forecast for 2017 an attractive EUR 0.59 per share (unchanged
EUR 0.57 per share for 2016)
Hamburg (10 November 2016) - At the end of the third quarter of 2016, TAG
Immobilien AG (TAG) reports further operating successes in its portfolio -
which currently comprises about 78,300 units - thanks to rent increases and
vacancy reduction. FFO for the first nine months of the 2016 financial year
amounted to EUR 69.9m or EUR 0.52 per share, after EUR 55.6m or EUR 0.45
per share for the same period of the previous year. In the nine-month
period to 30 September 2016, consolidated net profit also rose
significantly, to EUR 174.1m vs. EUR 115.2m in the first nine months of the
previous year.
Strong operating performance and improvement in NAV per share as a result
of the positive valuation result
Rental revenue for the third quarter of 2016 was EUR 69.2m, up again over
the previous quarter (EUR 68.3m). Net rental income also improved
significantly to EUR 56.5m, after EUR 55.3m in the previous quarter. Across
the Group, vacancy in the residential units was reduced by 1.7 percentage
points year-on-year, from 8.4% in September 2015 to 6.7% in September 2016.
If one eliminates the acquisitions made at the turn of the year 2015/2016,
which had higher vacancy than the existing portfolio, total vacancy
reduction in the residential units during this period actually amounted to
1.9 percentage points. In the overall portfolio, vacancy dropped to 7.0% in
September 2016 after 8.8% in September 2015. Like-for-like rental growth in
TAG's residential units was 1.9% in the last twelve months, and 3.8% per
annum if the effects from the vacancy reduction are additionally taken into
account.
The annual revaluation of the entire real estate portfolio carried out at
30 September 2016 resulted in a valuation gain of EUR 159.3m. This result
is well above the previous year's figure of EUR 73.3m, an increase mainly
driven by 'yield compression', i.e. a further rise in market prices due to
intense competition for residential properties. However, most of the
valuation gain is again due to the fact that rents and vacancies in the TAG
portfolio have developed better than expected in the last valuation. So
TAG's above-expectation operating performance is also reflected in the
valuation result.
Interest rate developments also contributed to the successful performance.
At 30 September 2016, total cost of debt averaged 3.2%, compared to 3.5% at
31 December 2015. The years ahead will see further interest cost savings,
as bank loans totalling EUR 604m become due or can be refinanced when their
fixed-interest rate period ends by 31 December 2018. The average interest
rate on these bank loans is 3.6%. Given the significantly lower current
market rates, a further substantial reduction in cost of debt can be
expected. The same is true for the EUR 310m corporate bond due in the 2018
financial year. It has an effective interest rate of 4.8%, which is high by
today's standards.
At the end of the third quarter of 2016, consolidated net profit amounted
to EUR 174.1m, compared to EUR 115.2m in the prior-year period. From the
end of the third quarter of 2016, the Funds from Operations as the main
indicator of operating profitability (FFO I excluding sales) amounted to
EUR 25.0m after EUR 23.3m and EUR 21.6m respectively in the two preceding
quarters. For the entire first nine months of 2016, the FFO rose by more
than 25% to EUR 69.9m (previous year: EUR 55.6m).
Thanks to the strong Group result, NAV per share increased to EUR 11.34 at
30 September 2016, compared to EUR 10.40 at 30 June 2016, while the LTV
ratio was reduced from 62.4% to 56.9%. Besides the positive valuation
result, this was also attributable to the early conversion into equity of
the last outstanding convertible bond totalling EUR 74.5m in July and
August of this year.
Further significant FFO increase expected, another dividend increase
planned for 2017
Due to the very positive performance, the FFO forecast for the 2016
business year was already raised significantly to between EUR 92m and EUR
93m, or EUR 0.68 per share, in August of this year. For the following year
2017, according to the forecast published today, another substantial rise
in FFO is expected, to between EUR 104m and EUR 106m, or EUR 0.74 per
share. This increase will mainly be driven by the ongoing rental growth and
savings on interest costs. At the same time, a further dividend increase to
EUR 0.59 per share is planned for the 2017 financial year. The dividend
forecast for the year 2016 remains unchanged at EUR 0.57 per share.
"We continue to be optimistic regarding TAG's future economic development.
We are seeing strong results from operations, and future refinancing will
result in significant further savings on interest costs. And as not only
the Housing Market Report for Eastern Germany published by us in October
2016 shows, the strategy that we have been pursuing for years now, of
offering affordable housing in the 'B cities', puts us in a fast-increasing
market environment. Our shareholders, too, can profit from this through the
again planned dividend increase", said Martin Thiel, Chief Financial
Officer of TAG Immobilien AG.
For further details, please refer to the quarterly report to 30 September
2016, published today at http://www.tag-ag.com/en/investor-relations/
financial-statements/quarterly-reports/.
Press enquiries:
TAG Immobilien AG
Head of Investor & Public Relations
Dominique Mann
Phone +49 (0) 40 380 32 300
Fax +49 (0) 40 380 32 390
[email protected]
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10.11.2016 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,
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Language: English
Company: TAG Immobilien AG
Steckelhörn 5
20457 Hamburg
Germany
Phone: 040 380 32 0
Fax: 040 380 32 388
E-mail: [email protected]
Internet: http://www.tag-ag.com
ISIN: DE0008303504, XS0954227210, DE000A12T101
WKN: 830350, A1TNFU, A12T10
Indices: MDAX
Listed: Regulated Market in Frankfurt (Prime Standard), Munich;
Regulated Unofficial Market in Berlin, Dusseldorf,
Hamburg, Hanover, Stuttgart, Tradegate Exchange
End of News DGAP News Service
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519007 10.11.2016
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