First Quarter 2018: Key Operating metrics further improved compared to same quarter of the previous year
- Net rental income for the quarter increased by 6.9 percent to EUR 44.9 million
- FFO I grew by 79.7 percent to EUR 14.2 million
- EPRA NAV stable at EUR 1,184.2 million
- WACD down to 2.38 percent, outperforming revised 2018 guidance
Berlin, 16 May 2018 – During the first quarter of 2018 ADLER Real Estate AG successfully increased its net rental income by 6.9 percent and grew its FFO I by 79.7 percent, compared to the previous year. The group’s ongoing commitment to improve key financial metrics, including, but not limited to the refinancing of higher yielding liabilities helped to bring down the WACD to 2.38 percent which outperforms the revised guidance of 2.4 percent.
Net rental income increased by 6.9 percent to EUR 44.9 million compared to the same period previous year
At the end of the first quarter 2018, ADLER Real Estate operated a portfolio comprising of 50.236 rental units, 4.2 percent more than the same period a year ago – not including the assets from the recent acquisition of Brack Capital Properties N.V. which will be consolidated in Q2.The average rent per square meter per month in the core portfolio increased by 3.2 percent to EUR 5.23 (like-for-like plus 3.7 percent) with the corresponding occupancy rate increasing by 1.1 percentage points to 91.7 percent. Portfolio growth and improved operational performance through internalized re-letting helped to increase net rental income to EUR 44.9 million in the first quarter 2018, up by 6.9 percent against the adjusted figure for the comparable period of the previous year (EUR 42.0 million). Adjustments assume a full deconsolidation of ACCENTRO Real Estate AG which ADLER divested from at the end of 2017 already at the beginning of that year.
Net of expense items which comprise recoverable and non-recoverable operating costs and maintenance expenses, earnings from property lettings amounted to EUR 39.0 million in the first quarter of 2018, 33.1 percent more than in Q1 2017 (EUR 29.3 million adjusted).
FFO I grew by 79.7 percent to EUR 14.2 million
FFO I for the first quarter of 2018 amounted to EUR 14.2 million equal to an 79.7 percent increase compared to the first quarter of the previous year (EUR 7.9 million). Basic FFO I per share amounted to EUR 0.21 as of March 31, 2018 as against EUR 0.13 one year ago. On a fully diluted basis FFO I per share increased to EUR 0.18 compared to EUR 0.12 for the first quarter 2017.
EPRA NAV stable at EUR 1,184.2 million
At the end of Q1 2018, EPRA NAV amounted to EUR 1,184.2 million and was thus 1.9 percent lower than the adjusted figure of the previous year (EUR 1,207.2 million). NAV declined due the further EUR 15.6 million buy-back of Treasury Shares which is now terminated and was successfully implemented at a lower average cost than the current price. In addition, the slight NAV correction derived from one-off expenses in connection with repayment penalties connected to the refinancing of higher yielding liabilities. Basic EPRA NAV per share came to EUR 17.77 as compared to EUR 17.80 at the end of last year. On a fully diluted basis, EPRA NAV per share reached EUR 16.61 (end of 2017 EUR 16.64).
WACD down to 2.38 percent, outperforming revised 2018 guidance
After the comprehensive refinancing of the promissory notes (Schuldscheindarlehen) through the successful placement of a EUR 800 million bond at the end of last year was completed in the first quarter 2018, the weighted average cost of debt (WACD) decreased from 2.72 percent at the end of 2017 to 2.38 percent at the end of the first quarter 2018, outperforming reported and revised guidance.
LTV, computed as the ratio of net debt to total property assets (Gross Asset Value) stood at 60.4 percent at the end of the first quarter 2018, after 59.4 percent at the end of 2017. Adjusted for the share buyback program, LTV would have stood at 59.3 percent at the end of the first quarter 2018.
The increase is of a transitional nature as LTV will decline to the targeted level of 55 percent in the course of the year following the full consolidation of Brack Capital Properties.
Tomas de Vargas Machuca, Co-CEO of ADLER real Estate AG recapped the first quarter 2018: “Already in 2017 we had carried out transformational changes like the disposal of 94 percent of our stake in ACCENTRO AG and the buyback of our promissory notes by placing a EUR 800 million BB+ bond. During the first Quarter 2018 we successfully launched a Special Tender Offer to acquire up to 70 percent of the shares in BCP which was closed in the second quarter. We also improved our corporate rating from BB- to BB/Positive Outlook. Lastly, the refinancing measures undertaken in April – the placement of EUR 800 million bonds to refinance the acquisition of BCP Bridge loan and to buy back EUR 200 million of our 2015/2020 4.75 percent bond – have contributed to building significant interest and momentum for ADLER Real Estate and the opportunities we still have ahead of us.”
Maximilian Rienecker, Co-CEO of ADLER Real Estate AG, added: “Q1 2018 was another tremendous quarter which reflects the Company’s optimized structure. It is important to note that the taken measures will fully materialize and as such be visible in the next quarters only – such as the consolidation of Brack Capital Properties and its considerable FFO contribution – fueling our path to Investment Grade.”
Key financials Q1 2018
|In EUR millions|
|Consolidated Statement of Income||Q1 2018||Q1 2017|
|Net rental income||44.9||42.0 3)|
|Earnings from property lettings||39.0||29.3 3)|
|Earnings from the sale of properties||0.9||0.1 3)|
|Consolidated net profit from continuing operations||-12.4||0.0|
|Consolidated net profit||-12.8||3.0|
|FFO I per share in EUR 1)||0.21||0.13|
|Consolidated Balance Sheet||31.03.2018||31.12.2017|
|EPRA NAV per share in EUR 1)||17.77||17.80|
|LTV II in % 2)||60.4||59.4|
|Cashflow||Q1 2018||Q1 2017|
|Net cash flow from operating activities||32.9||-0.6|
|of which from continuing operations||32.9||7.8|
|Net cash flow from investing activities||-222.3||389.8|
|of which from continuing operations||-222.3||389.9|
|Net cash flow from financing activities||210.1||-321.1|
|of which from continuing operations||210.1||-324.3|
|of which residential||49,216||47,144|
|Average rent (EUR/sqm/month) core portfolio||5.23||5.07|
|Occupancy rate (%) core portfolio||91.7||90.6|
|Number of employees||607||425|
|1) based on the number of shares outstanding as at balance sheet date plus shares from assumed conversion of mandatory bond which is considered as equity, previous year’s figures adjusted accordingly
2) excluding convertible bonds
3)Adjusted due to sale of trading activities