Cegereal, the French Core Office REIT - First-half 2017: Portfolio value strengthened by dynamic asset management
Paris, July 26, 2018 - 8:00 a.m.
First-half 2018 results - Regulated information
Portfolio value strengthened
by dynamic asset management
Key indicators
In millions of euros | First-half 2018 | First-half 2017 | Change |
IFRS rental income | 26.0 | 26.0 | +0.2% |
EPRA earnings | 14.7 | 14.9 | -1.6% |
Portfolio value (excluding transfer duties) | 1,174 | 1,144 | +2.7% |
Debt ratio | 53.1% | 51.2% | +1.9 pts |
EPRA NAV per share excluding transfer duties (in €) | 40.9 | 41.8 | -2.0% |
EPRA NNNAV per share excluding transfer duties (in €) | 40.4 | 41.4 | -2.4% |
Dividend per share (in €) | 2.2 | 2.1 | +4.8% |
Total Share Return over the last 12 months | 7.5% | 8.7% | -1.2 pts |
Rental income for the first half of 2018 remained stable at €26 million as a result of strong marketing activity, while the portfolio value rose by 2.7% to €1,174 million (excluding transfer duties) on the back of active asset management.
Cegereal`s EPRA earnings came in at €14.7 million in first-half 2018, compared with €14.9 million in the same prior-year period.
A premium portfolio with ever increasing appeal
Cegereal is highly committed to improving and optimizing its properties, and seeks to offer its tenants a superior quality of life that guarantees well-being at work.
In the first half of 2018, a major asset management project was carried out at the Europlaza building, with the aim of completing all the renovation work taking place in the property`s upper floors, as well as in shared spaces such as the auditorium, gym and common area, before summer. The redesign complements the recently renovated garden and lobby, offering users outstanding amenities in a welcoming, modern atmosphere designed to the highest standards and full of natural light.
Despite strong competition in the La Défense business district, Europlaza`s attractive features have won the approval of leading companies such as KPMG, which in recent months has leased additional space in the building`s "garden floors".
In addition, a number of potential tenants have already expressed a keen interest in Europlaza`s upper floors, the remaining vacant space in Cegereal`s portfolio.
The occupancy rate of Cegereal`s other assets stood at an average of 99.5%, resulting in an overall occupancy rate of 90.5% at June 30, 2018, compared with 91.4% at December 31, 2017.
TOTAL SHARE RETURN (TSR) OVER THE LAST 12 MONTHS: 7.5%
The estimated value, excluding transfer duties, of Cegereal`s real estate assets totaled €1,174 million at June 30, 2018, versus €1,144 million excluding transfer duties at June 30, 2017 and €1,169 million at December 31, 2017.
In first-half 2018, EPRA NNNAV, excluding transfer duties, amounted to €40.4 per share, versus €41.4 in first-half 2017, reflecting changes in fair value of properties (positive impact of €2.2 per share), dividend distributions (negative impact of €4.1 per share), consolidated earnings growth (positive impact of €1.0 per share) and movements in other line items (negative impact of €0.1 per share).
Total Share Return over the last 12 months came to 7.5%, with a distribution-to-NAV ratio of 9.9% and a slight 2.4% decline in NAV.
AN OUTSTANDING ENVIRONMENTAL COMMITMENT
In first-half 2018, Cegereal continued with its ambitious environmentally friendly process rolled out several years ago as part of its "Upgreen your Business" program.
As a result of its CSR activities and its green capex policy, the Company has now achieved the highest environmental standards, with dual BREEAM In-Use International and NF HQETM Exploitation certification for its entire portfolio.
Investor Calendar
- November 15, 2018 Third-quarter 2018 revenue
Media Relations | Investor Relations |
About Cegereal
Created in 2006, Cegereal is a commercial property company that invests in prime office properties in Greater Paris. The portfolio`s appraisal value is estimated at €1,263 million at June 30, 2018 (replacement value).
From an environmental point of view, Cegereal`s portfolio is fully certified with NF HQETM Exploitation and BREEAM In-Use International certification, and benefits from the "Green Star" rating in the international GRESB benchmark.
Cegereal is a REIT listed on Euronext Paris since 2006, in compartment B (ISIN:FR0010309096). The Company had a market capitalization of €511 million on July 24, 2018.
Interim Financial Statements
(IFRS)
Six-month period ended June 30, 2018
Excerpts from the interim financial report
approved by the Board of Directors on July 25, 2018.
The Statutory Auditors have performed a review
of the interim financial statements.
Consolidated Statement of Comprehensive Income (IFRS) for the six months ended June 30, 2018
In thousands of euros, except per share data | |||
June 30, 2018 | Dec. 31, 2017 | June 30, 2017 | |
6 months | 12 months | 6 months | |
Rental income | 26 036 | 51 259 | 25 975 |
Income from other services | 10 746 | 16 166 | 10 675 |
Building-related costs | (16 074) | (29 416) | (14 306) |
Net rental income | 20 707 | 38 008 | 22 344 |
Sale of building | 0 | 0 | 0 |
Administrative costs | (2 377) | (4 765) | (2 513) |
Net additions to provisions & depreciation and amortization | (5) | (10) | (5) |
Other operating expenses | (133) | 0 | 0 |
Other operating income | 0 | 175 | 716 |
Increase in fair value of investment property | 4 291 | 41 978 | 14 095 |
Decrease in fair value of investment property | (5 688) | (4 800) | 0 |
Total change in fair value of investment property | (1 397) | 37 178 | 14 095 |
Net operating income | 16 795 | 70 587 | 34 636 |
Financial income | 6 | 597 | 204 |
Financial expenses | (5 643) | (10 542) | (5 102) |
Net financial expense | (5 637) | (9 945) | (4 898) |
Corporate income tax | 0 | 1 765 | 0 |
CONSOLIDATED NET INCOME | 11 158 | 62 408 | 29 738 |
of which attributable to owners of the Company | 11 158 | 62 408 | 29 738 |
of which attributable to non-controlling interests | 0 | 0 | 0 |
Other comprehensive income | |||
TOTAL COMPREHENSIVE INCOME | 11 158 | 62 408 | 29 738 |
of which attributable to owners of the Company | 11 158 | 62 408 | 29 738 |
of which attributable to non-controlling interests | 0 | 0 | 0 |
- | |||
Basic earnings per share (in euros) | 0,84 | 4,67 | 2,23 |
Diluted earnings per share (in euros) | 0,79 | 4,37 | 2,04 |
Consolidated Balance Sheet (IFRS) at June 30, 2018
In thousands of euros | |||
June 30, 2018 | Dec. 31, 2017 | June 30, 2017 | |
Non-current assets | |||
Property, plant and equipment | 53 | 56 | 56 |
Investment property | 1 174 400 | 1 169 400 | 1 143 700 |
Non-current loans and receivables | 21 289 | 21 591 | 15 359 |
Financial instruments | 10 | 31 | 101 |
Total non-current assets | 1 195 752 | 1 191 078 | 1 159 216 |
Current assets | |||
Trade accounts receivable | 13 902 | 18 481 | 10 808 |
Other operating receivables | 11 866 | 10 200 | 16 065 |
Prepaid expenses | 196 | 347 | 247 |
Total receivables | 25 964 | 29 029 | 27 120 |
Cash and cash equivalents | 18 879 | 61 718 | 42 321 |
Total cash and cash equivalents | 18 879 | 61 718 | 42 321 |
Total current assets | 44 843 | 90 747 | 69 441 |
TOTAL ASSETS | 1 240 595 | 1 281 825 | 1 228 657 |
Shareholders` equity | |||
Share capital | 66 863 | 66 863 | 66 863 |
Legal reserve and additional paid-in capital | 25 314 | 77 600 | 77 600 |
Consolidated reserves and retained earnings | 470 363 | 410 662 | 410 646 |
Net attributable income | 11 158 | 62 408 | 29 738 |
Total shareholders` equity | 573 697 | 617 532 | 584 847 |
Non-current liabilities | |||
Non-current borrowings | 616 418 | 616 043 | 577 061 |
Other non-current borrowings and debt | 6 505 | 5 929 | 5 374 |
Non-current corporate income tax liability | 0 | 0 | 0 |
Financial instruments | 780 | 548 | (1) |
Total non-current liabilities | 623 704 | 622 519 | 582 434 |
Current liabilities | |||
Current borrowings | 2 970 | 2 979 | 3 160 |
Trade accounts payable | 14 698 | 11 589 | 2 880 |
Corporate income tax liability | 0 | 0 | 0 |
Other operating liabilities | 11 363 | 9 644 | 39 250 |
Prepaid revenue | 14 163 | 17 561 | 16 086 |
Total current liabilities | 43 194 | 41 774 | 61 376 |
Total liabilities | 666 898 | 664 293 | 643 810 |
TOTAL SHAREHOLDERS` EQUITY AND LIABILITIES | 1 240 595 | 1 281 825 | 1 228 657 |
Consolidated Statement of Cash Flows for the six months ended June 30, 2018
In thousands of euros | |||
June 30, 2018 | Dec. 31, 2017 | June 30, 2017 | |
OPERATING ACTIVITIES | |||
Consolidated net income | 11 158 | 62 408 | 29 738 |
Elimination of items related to the valuation of buildings: | |||
Fair value adjustments to investment property | 1 397 | (37 178) | (14 095) |
Reversal of depreciation and amortization | |||
Indemnity received from lessees for the replacement of components | 0 | 0 | 0 |
Elimination of other income/expense items with no cash impact: | |||
Depreciation of property, plant and equipment (excluding investment property) | 5 | 9 | 5 |
Free share grants not vested at the reporting date | 0 | 0 | 103 |
Fair value of financial instruments (share subscription warrants, interest rate caps and swaps) | 253 | (219) | (838) |
Adjustments for loans at amortized cost and fair value of embedded derivatives | 1 208 | 1 752 |
|
Contingency and loss provisions | 0 | 0 | 0 |
Corporate income tax | 0 | (1 765) | 0 |
Penalty interest | 0 | (165) | 0 |
Cash flows from operations before tax and changes in working capital requirements | 14 021 | 24 841 | 15 870 |
Change in shareholder debt | 0 | 0 | 28 082 |
Other changes in working capital requirements | 3 965 | 14 380 | 12 216 |
Working capital adjustments to reflect changes in the scope of consolidation | 0 | 0 | 0 |
Change in working capital requirements | 3 965 | 14 380 | 40 298 |
Net cash flows from operating activities | 17 986 | 39 221 | 56 168 |
INVESTING ACTIVITIES | |||
Acquisition of fixed assets | (6 399) | (8 126) | (5 505) |
Net increase in amounts due to fixed asset suppliers | 833 | 493 | 207 |
Net cash flows used in investing activities | (5 567) | (7 633) | (5 297) |
FINANCING ACTIVITIES | |||
Share capital increase | 0 | 0 | 0 |
Change in bank debt | (750) | 37 875 | (375) |
Issue of financial instruments (share subscription warrants) | 0 | 0 | 0 |
Refinancing transaction costs | (68) | (508) | (106) |
Purchases of hedging instruments | 0 | 0 | 0 |
Net increase in current borrowings | 0 | 729 | 0 |
Net decrease in current borrowings | (23) | 0 | 571 |
Net increase in other non-current borrowings and debt | 577 | 1 323 | 769 |
Net decrease in other non-current borrowings and debt | 0 | 0 | 0 |
Purchases and sales of treasury shares | (180) | 130 | 40 |
Dividends paid | (54 813) | (28 053) | (28 082) |
Net cash flows from (used in) financing activities | (55 258) | 11 496 | (27 184) |
Change in cash and cash equivalents | (42 839) | 43 084 | 23 687 |
Cash and cash equivalents at beginning of the period* | 61 718 | 18 634 | 18 634 |
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 18 879 | 61 718 | 42 321 |
* There were no cash liabilities for any of the periods presented above.
PR Cegereal - First-half 2018 results
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Source: Cegereal SA via GlobeNewswire
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