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ADLER Real Estate AG: ADLER Real Estate AG posts significant increase in cash flow in 2014

ADLER Real Estate AG / Key word(s): Final Results

2015-03-27 / 07:00

Corporate News

ADLER Real Estate AG posts significant increase in cash flow in 2014

- Cash flow from operating activities increased by 40% to EUR 16.75 million

- LTV almost unchanged

- FFO I already significantly improved despite high one-off expense

- Consolidated profit more than doubled

- Further earnings improvement in 2015

Hamburg, 27 March 2015. ADLER Real Estate AG, Frankfurt/M., (ISIN DE0005008007), further improved its results of operations significantly in the 2014 financial year despite a number of extraordinary effects. As shown in the now adopted annual financial statements for 2014, cash flow from operating activities improved by 40.3%, from EUR 11.93 million to EUR 16.75 million. Adjusted for one-off and extraordinary effects, and particularly adjusted for income from fair value adjustments, EBITDA in accordance with IFRS, rose to EUR 38.01 million in 2014 (previous year: EUR 4.8 million). Consolidated profit, which included fair value adjustments of EUR 132.93 million (previous year: EUR 59.55 million) more than doubled to EUR 111.57 million (previous year: EUR 46.88 million).

"We posted extremely strong growth in the 2014 reporting year thanks to several large acquisitions and were able to realise this growth through a number of capital measures with a corresponding expense," says Axel Harloff, CEO of ADLER Real Estate AG. During the 2014 financial year, ADLER acquired a large quantity of residential property portfolios, which saw the company's own residential property portfolio more than triple from 7,797 at the end of 2013 to 24,086 residential units, including some commercial units, at the end of 2014. There were typically longer time frames between the time of acquisition and financing and the time that the effective takeovers took place. Operative measures were taken by ADLER's Asset Management department to achieve stable and growing rental income, which still negatively impacted ADLER in the reporting year.

FFO I, which indicates the earnings power of the Portfolio division, improved from EUR -4.53 million to EUR -1.11 million in 2014. Together with FFO II, which comprises the Trade and other divisions amounted to EUR 1.40 million (previous year: EUR 2.57 million), this resulted in slightly positive FFO of EUR 0.29 million overall. "During the 2015 financial year just started, we will again improve our earnings ratios considerably as we will now be collecting current rent with no further non-recurring expenses," adds Harloff. From the management of the 24,086 units in 2014 and the corresponding operative earnings from the management of roughly 6,750 units in Wilhelmshaven, which were acquired at the end of January 2015, ADLER anticipates FFO I of approximately EUR 7.0 million. Not included are the corresponding earnings from the management of around 20.000 units of WESTGRUND AG, Berlin, whose takeover ADLER has already secured for the middle of the year.

The growth achieved as a result of the various capital measures also impacted the balance sheet and net assets position of the ADLER Group. As at the balance sheet date at the end of 2014, assets adjusted for cash and cash equivalents increased from EUR 0.454 billion at the end of 2013 to EUR 1.383 billion. The Group's liabilities also increased commensurately. However, loan-to-value (LTV), the ratio of net financial liabilities to assets adjusted for cash and cash equivalents, was almost unchanged at the end of 2014 at 71.2% (previous year: 71.0%). "Our LTV will fall to 67% as a result of further acquisitions," says Harloff. "In the medium term, we are planning to reduce LTV further to below 60%."

The 2015 financial year just started will mark ADLER's first reference year, against which future performance will be compared. The acquisitions made in 2012 to 2014 - after ADLER had realigned itself as a residential property portfolio management company - have now formed a broad basis for the consolidation, development and improvement of existing portfolios as well. In the 2014 reporting year, for example, the overall occupancy rate decreased to 87.2% (previous year: 91.0%) as the newly acquired portfolios in 2014 posted lower occupancy rates. "We expect to increase the occupancy rate to over 90% as early as in 2015 and thereby achieve an additional basis for increased earnings," says Harloff. Overall, in addition to growth in 2015, ADLER is planning medium- to long-term increases in operating earnings with corresponding long-term effects on the Group's overall results of operations.

For enquiries, please contact:

Press: german communications dbk ag
Jörg Bretschneider
Milchstr. 6 B, 20148 Hamburg
Telephone: 040-46 88 33 0, Fax: 040-47 81 80

Investor Relations: Hillermann Consulting
Christian Hillermann
Poststraße 14, 20354 Hamburg
Telephone: 040-32 02 79 10, Fax: 040-32 02 79 114

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