DIC Asset Aktiengesellschaft - Das Immobilienunternehmen mit Anlagefokus Gewerbeimmobilien in Deutschland

DIC Asset
DIC Asset
DIC Asset
DIC Asset
DIC Asset

DIC Asset AG Looks back on Outstanding 2017 Financial Year: Consolidated In-come more than Doubled, FFO Significantly Increased, another Dividend Increase

(Frankfurt, 09.02.2018)

  • Consolidated income more than doubled at EUR 64.4 million
  • Significant growth in FFO to EUR 60.2 million (+28%), FFO per share at EUR 0.88
  • Key figures of Commercial Portfolio optimised: Vacancy rate drops from 11.8% to 9.9%, WALT increases to 5.1 years
  • Fund business expanded to EUR 1.5 billion
  • Total assets under management rise to EUR 4.4 billion
  • Dividend proposal including special dividend: EUR 0.64, disbursement possible as scrip dividend for the first time
  • Forecast for 2018: FFO grows to EUR 62-64 million

Frankfurt/Main, 9 February 2018. This Friday, DIC Asset AG (German securities code number WKN A1X3XX / ISIN DE000A1X3XX4) presented its figures for the 2017 financial year. The company looks back on another banner year, having easily achieved the targets set for the key performance indicators even after these had been raised in the course of the year. The refinancing of the Commercial Portfolio that was completed in late 2016, and the achieved investment income from WCM and TLG Immobilien AG, are clearly reflected in a consolidated income that more than doubled at EUR 64.4 million (previous year, adjusted: EUR 26.9 million). At EUR 60.2 million, the FFO topped the prior-year figure (previous year: EUR 47.0 million) by 28 percent, substantially exceeding the forecast made at the beginning of the year. The successful internal provision of the management platform for proprietary and for third-party real estate produced solid funds from operations in 2017 as in the previous year. The letting performance of the overall portfolio rose by c. EUR 8 million year on year to a total of EUR 40.2 million, while the weighted average lease term (WALT) increased from 4.3 years to now 5.2 years. With the assets from the third-party property management taken into account, the assets under management (AuM) came to EUR 4.4 billion as of 31 December 2017. With a view to the successful financial year, the Management Board of DIC Asset AG intends to propose a special dividend of EUR 0.20 in addition to another increase in dividend to EUR 0.44 per share for 2017 to the Annual General Meeting on 16 March 2018. This will bring the dividend yield up to 6.1 percent relative to the year-end share price of 2017.

"2017 was very successful financial year for us. The significant improvement in the net interest result and our successes in portfolio management - including for third parties -have had a very positive effect on the FFO and cash flow, while our equity interest in WCM generated one-off income as a result of the takeover by TLG. We intend to let our shareholders participate in both developments by raising the dividend and by disbursing a special dividend. For the first time, our shareholders will moreover have the choice of receiving their dividend either as cash payment or in the form of additional DIC share certificates. By offering this option, we not only show that ours has become a consistent dividend stock, but we also give our shareholders the chance to step up their participation in the future appreciation of the company by subscribing additional share certificates," said Sonja Wärntges, CEO of DIC Asset AG.

Vacancy Rate in the Commercial Portfolio below Ten Percent
The "Commercial Portfolio" operating segment showed an extremely positive performance in the course of the year. The application of internal asset management helped us to bring down the vacancy rate successfully by 1.9 percentage points year on year to now 9.9 percent (previous year: 11.8 percent). The weighted average lease term (WALT) lengthened from 4.5 years to now 5.1 years. At the same time, strategic sales helped to further optimise the Commercial Portfolio as planned. Not least because of the great market environment, c. EUR 240 million worth of deals were transacted throughout the year as a whole. By the end of the year, the company held EUR 1.6 billion in assets under management (previous year: EUR 2.0 billion) in this operating segment. Despite the large volumes of portfolio sales, the letting performance achieved the level of 2016 at EUR 16 million. The gross rental income exceeded the anticipated target range for 2017 at EUR 109.7 million, and fell short of the prior-year figure by only a slight margin (previous year: EUR 111.2 million). Like for like, the rental income saw an increase by 1.4 percent. The successful reduction of vacancies, the stable trend in rental income, and the permanently high letting performance demonstrated once more the quality of DIC's successful in-house letting management.

DIC Fund Products Established on the Market
Following the placement of the DIC Office Balance IV during Q1 2017, and of the DIC Retail Balance I during Q3 2017, DIC is currently represented on the German market with six institutional real estate funds. The assets under management in the "Funds" operating segment added up to EUR 1.5 billion toward year-end, an increase by 31 percent compared to the prior-year figure. Fees from real estate management in the fund business added up to EUR 18.9 million by the end of 2017, slightly topping the level of the year before (previous year: EUR 18.8 million). "The fund business showed an excellent performance during the year. The next products are already in planning, and following the acquisition of three office properties in December, our pipeline of warehoused assets is quite adequately stocked for structuring new funds," said Wärntges.

Drastically Increased Contribution to Operating Income from the "Other Investments" Segment
Earnings
from the "Other Investments" operating segment totalled EUR 28.3 million by the end of the year (previous year: EUR 2.6 million). By exchanging its WCM shares for an equity interest in TLG Immobilien AG, DIC Asset AG collected EUR 19.3 million in one-off income, part of which is to be disbursed to the shareholders in the form of a special dividend. In addition, the WCM/TLG commitment paid an attractive EUR 3.7 million in current investment income. Following the expansion of the third-party property management, this business division's assets under management (AuM) came to EUR 1.3 billion as of 31 December 2017. The withdrawal from property developments and the complete wind-up of joint venture participations continued as planned with more sales toward the end of the year.

Net Interest Significantly Improved, Continued Reduction in LTV Ratio
The company continues to optimise its financial structure in the course of the year, and this, together with the refinancing already completed in 2016, improved the net interest result by 25 percent compared to the adjusted prior-year result (EUR -46.7 million), bringing it up to a total of EUR -35.1 million. The proceeds from a corporate bond in the amount of EUR 130 million that was successfully placed during the second half-year are used to repay current higher-interest debenture bonds, and thereby to keep improving the capital structure of the company. As of 31 December 2017, the average interest rate on bank debt was 1.8 percent, and thus 1.6 percentage points lower than it had been at year-end 2016 (3.4 percent). At the same time, the loan-to-value ratio dropped further, and was down to 57.0 percent by the end of the year. This implies a reduction by nearly 3 percentage points. The company's equity ratio increased by a significant 3.8 percentage points to 35.4 percent (previous year: 31.6 percent). The net asset value (NAV) equalled EUR 900 million at year-end (previous year: EUR 880 million). The NAV per share equals EUR 13.12, up from EUR 12.83 the previous year.

Outlook for 2018
The considerable increase in funds from operations (FFO) in 2017 reflects the success of having continued to develop the internal property management - including for third parties - and to optimise the funding structure while also reflecting the growth of DIC Asset AG in the investment fund business. DIC Asset AG will also enhance and optimise its successful and unique hybrid model in 2018. The earnings from the different segments Commercial Portfolio, Funds and third-party business will be further expanded and strengthen the basis for result and FFO. The company plans to keep diversifying its sources of income in the future, to raise value-added potential, and to generate stable cash flows. In 2018, the company is aiming for an acquisition volume between EUR 450 and 500 million across its three business divisions but with a special focus on the fund business. At the same time, DIC projects a volume of disposals in an amount of EUR 100 to 120 million to further optimise its Commercial Portfolio, and to exploit the current market environment for disposals. With the transactions and the planned letting performance duly taken into account, the company expects to generate a gross rental income in the amount of EUR 95 to 98 million in 2018. Since the expansion of the property management platform was completed in 2017, the operating expenses are expected to decline slightly as a result of the growing fund business. The increase in property management revenues caused by the growth in fund business is likely to compensate the drop in rent revenues in the longer term. Considering that the FFO in 2017 was characterised particularly by the effect the refinancing arrangement had on the financial results, DIC Asset AG expects to see slightly increased funds from operations in an amount of EUR 62-64 million (c. EUR 0.90-0.93 per share) in 2018.


About DIC Asset AG:
DIC Asset AG 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 around 180 assets with a combined market value of c. EUR 4.4 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 1.6 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 1.5 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 1.3 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.


Download Annual Report 2017 (PDF, 14 MB) >>





DIC Asset AG at a Glance

Financial indicators, in mEUR

2017

2016

Gross rental income

109.7

111.2

Net rental income

93.1

94.5

Fees from real estate management

20.8

21.5

Property disposal proceeds

229.5

318.1

Total income

381.9

473.8

Profits on property disposals

25.5

23.2

Net income from associates

29.0

2.3

Funds from operations (FFO)

60.2

47.0

EBITDA

136.6

114.9

EBIT

105.6

79.6

Consolidated income

64.4

-29.4*

*incl. one-off expenses in the amount of c. EUR 56 million





Financial indicators per share in EUR

2017

2016

EPRA earnings per share

0.83

0.64

FFO per share

0.88

0.69

Net asset value (NAV) per share

13.12

12.83


Operating performance indicators

2017

2016

Letting performance, in mEUR

40.2

32.1

WALT in years

5.2

4.3

Vacancy rate, in %*

9.9

11.8

*Commercial Portfolio without warehoused assets and property developments



Balance sheet ratios, in mEUR

31/12/2017

31/12/2016






Investment property

1,437.2

1,583.4


Shareholders' equity

828.9

757.0


Financial debt

1,405.7

1,450.4


Total assets

2,341.3

2,395.5


Balance sheet equity ratio, in %

35.4

31.6


Loan-to-value ratio (LTV), in %

57.0

59.9



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Investor Relations & Corporate Communications

DIC Asset AG
Nina Wittkopf
Leiterin Investor Relations & Corporate Communications

Neue Mainzer Straße 20 • MainTor
60311 Frankfurt am Main

Tel. (0 69) 9 45 48 58-14 62