DIC Asset Aktiengesellschaft · Real estate company

DIC Asset
DIC Asset
DIC Asset
DIC Asset
DIC Asset

Press Release

DIC Asset AG Reports Significant Increase in Funds from Operations at Mid-Year and Raises FFO Forecast for 2017

(Frankfurt, 03.08.2017)

  • FFO increase by up to 8 percent, to EUR 29.8 million
  • Consolidated income maintains prior-year level at EUR 20 million
  • Financial results notably improved
  • Annual targets for 2017 adjusted

Frankfurt/Main, 03 August 2017. This Thursday, DIC Asset AG (WKN A1X3XX / ISIN DE000A1X3XX4) presented its figures for the first half-year of 2017. The company backed the successful start into the first quarter with a solid mid-year performance as of the key date, 30 June. Compared to the prior-year period, the FFO experienced an 8-percent increase, adding up to EUR 29.8 million (mid-year 2016: EUR 27.7 million). The figures are primarily explained by the improved funding terms for the Commercial Portfolio. Since this boosted the financial results, the profit for the period remained stable year on year at EUR 20.0 million despite a decrease in sales, matching last year's level (mid-year 2016: EUR 20.2 million). Assets under management rose to EUR 3.4 billion by the end of the first semester, up from EUR 3.2 billion at the end of the prior-year period.

"The increase in funds from operations shows that we are headed very much in the right direction with the growth strategy of our hybrid business model. The achievements of this strategy are perfectly obvious to us, and we will continue to optimise the Proprietary Portfolio and Fund Management business divisions to keep raising our revenues. On top of that, the positive effects of the refinancing arranged late last year are beginning to have an impact. As of now, we have adjusted our external reporting to the hybrid business model, and you will see the structure reflected in our reporting," said Aydin Karaduman, CEO of DIC Asset AG.

Commercial Portfolio further Optimised
In the Commercial Portfolio segment, the company's assets under management add up to EUR 1.7 billion, and thus experienced a modest quarter-over-quarter decline due to disposals (Q1 2017: EUR 2.0 billion). Despite these sales, the successful portfolio optimisation has kept gross rental returns at 6.3 percent, the same level as a year ago. Moreover, the vacancy rate was pushed down to 12.9 percent, significantly below the prior-year figure of 13.9 percent. Overall, the letting performance of the first half-year added up to around 52,900 square metres. Included in the sum total are new rentals of about 25,600 square metres and renewed rentals of about 27,300 square metres.

Upward Trend in the Fund Business Continues
After the successful full placement of the Office Balance III investment fund and the launch of its successor products Office Balance IV during the first quarter, new products are already being prepared in the Funds segment. One of them, a retail fund, is currently in its implementation phase. The segment's assets under management added up to EUR 1.3 billion by mid-year, and thus rose by 18 percent year on year (mid-year 2016: EUR 1.1 billion). Fees from real estate management in the fund business came to EUR 6.9 million. The company expects to see further revenues from structuring the planned new investment funds during the second half of the year.

Financial and Earnings Position Keeps Improving
After refinancing the Commercial Portfolio in late 2016, DIC took its next step toward the long-term optimisation of the company's capital structure as early July as it successfully placed a corporate bond over EUR 130 million. The proceeds from the placement will be used to redeem bonds that pay higher rates of interest. The average interest rate for bank debt still equalled 1.7 percent as at balance sheet date, 30 June 2017. The company's financial debt totalled EUR 1.44 billion at mid-year, and is thus slightly lower than at year-end 2016 (EUR 1.57 billion). The net interest result improved over prior-year period by 28 percent to EUR -16.8 million (mid-year 2016: EUR -23.2 million). The loan-to-value was further reduced to 58.4 percent, shaving off around 150 basis points from the year-end figure (59.9 percent).

Forecast for the 2017 Financial Year Adjusted
The current market environment requires a selective and specific acquisition strategy if you wish to secure attractive yield upside despite the pent-up demand on the transaction market. In response to the situation, the Management Board resolved to adjust the acquisition volume at mid-year by adjusting it from EUR 500 million to EUR 350 million. The sales target of EUR 200 million for assets from the overall portfolio during the 2017 financial year was already achieved in its entirety by mid-year; additional sales to exploit the current market situation as the year progresses are likely to result in a year-end total of up to EUR 250 million. With a view to the company's positive performance, the Management Board revised its forecast for the gross rental income upward to somewhere between EUR 106 and 108 million while raising its FFO forecast for the 2017 financial year to somewhere between EUR 59 and 61 million.


About DIC Asset AG:
DIC is one of Germany's leading listed property companies, and specialises in commercial real estate. With around 20 years of experience on the German real estate market, the company maintains a regional footprint on all major German markets through six branch offices, and has 183 assets with a combined market value of c. EUR 3.4 billion under management. DIC uses a hybrid business model to manage its business divisions Commercial Portfolio, Funds and Other Investments. Taking an active asset management approach, DIC employs its proprietary, integrated real estate management platform to raise capital appreciation potential in its business divisions and to boost its revenues.

In its Commercial Portfolio division (EUR 1.7 billion in assets under management), DIC acts as proprietor and property asset holder, and thus generates revenues both from the management of the assets and through the value optimisation of its own real estate portfolio. The Funds division (EUR 1.3 billion in assets under management) generates its revenues by acting as issuer and manager of special real estate funds for institutional investors. Gathered in the business unit Other Investments (EUR 0.4 billion in assets under management) are joint venture investments, equity investments in property developments, strategic financial investments, and the management of properties in which the company holds no equity stakes.

DIC Asset AG has been included in the SDAX(R) segment of the Frankfurt Stock Exchange since June 2006. The Company's shares are also included in the EPRA index, which tracks the performance of the most important European real estate companies.


Key Performance Indicators

Financial indicators
in mEUR
Mid-year
2017
 
Mid-year
2016



 

Total income 245.3   346.3
Gross rental income 59.2   54.6
Fees from real estate management 7.8   15.0
Property disposal proceeds 166.4   265.5
Profits on property disposals 10.8   16.9
Funds from operations (FFO) 29.8   27.7


 

Financial indicators per share
in EUR 
Mid-year
2017
  Mid-year
2016



 

FFO 0.43   0.40
 


Balance sheet data
in mEUR
30/06/2017   31/12/2016




Balance sheet equity ratio, in % 34.2
31.6
Loan-to-value ratio (LTV), in % 58.4
59.9
Investment property 1,406.9
1,583.4
Shareholders' equity 777.0
757.0
Financial debt 1,436.9
1,566.8
Total assets 2,272.3
2,395.5
Cash and cash equivalents 174.1
152.4
 




Half-year reoprt (PDF, 3.5 MB) >>


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DIC Asset AG
Andre Zahlten
Head of Corporate Communications

Neue Mainzer Straße 20 • MainTor
60311 Frankfurt am Main

Tel. +49 69 9 45 48 58-14 35


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DIC Asset AG
Nina Wittkopf
Head of Investor Relations

Neue Mainzer Straße 20 • MainTor
60311 Frankfurt am Main

Tel. +49 69 9 45 48 58-14 62