News Column

Cegereal, the French Core Office REIT: First-half 2014 - EPRA earnings up 32.5%

July 23, 2014

Press release Paris, July 24, 2014 - 8:00 a.m. First-half Results First-half 2014 EPRA earnings up 32.5% * An upgraded recurring EPS growth target (up 20%) After outperforming its targets in the first-half, Cegereal has raised its full- year recurring earnings per share target from 15% to over 20%. * Robust growth in operating income (up 11.1%) First-half 2014 operating income rose 11.1% to €13.8 million from €12.3 million for the year-earlier period. This robust performance was due to the combined effect of higher rental income (up 4.3%) and a 25-bps reduction in the cost of debt to 3.15% following the increase in the portfolio occupancy rate to over 90% (91.5% at June 30, 2014). * Launch of the project to develop the first Garden Tower in La DÉfense A unique project in the heart of the La DÉfense business district, the Garden Tower will offer users of the Europlaza building an exceptional outdoor space as from early next year. Only the third building in France to obtain both HQE Exploitation and BREEAM In-Use International Very Good environmental certification, Europlaza will give tenants and their visitors the opportunity to enjoy a more than 3,000-sq.m. private garden, as well as two internal gardens, all designed by architect Juan Trindade. A dozen major international groups already benefit from the many amenities and low occupancy costs of this building located just a short walk away from the Grande Arche and alongside the new walkway linking the Coupole and Charras shopping centers. * Improved rental income in a challenging market environment (up 4.3%) Rental income calculated in accordance with IFRS - which includes rental expenses rebilled to tenants - amounted to €29.2 million in first-half 2014, an increase of 8.1% on the year-earlier period. Excluding rebilled expenses, rental income was 4.3% higher at €22.6 million, primarily reflecting the start of new leases signed in 2013 and the effect of lease renewals signed in the first half of 2014. During the period, Cegereal kept up its marketing momentum, signing or renewing leases on over 10,000 sq.m.: * A total of 2,319 sq.m. were let to new tenants, and * Lease renewals or extensions were signed concerning a further 7,825 sq.m. At June 30, 2014, the portfolio occupancy rate stood at 91.5%. The Europlaza occupancy rate stood at 93% at that date, versus 89% at December 31, 2013. During the period, two tenants renewed and extended their leases and a new tenant moved in: * Galderma's lease on 4,002 sq.m. was renewed with effect from January 1, 2014 and a further 825  sq.m. were leased during the second quarter. * The lease with CrÉdit Agricole/BforBank on 1,703 sq.m. was also renewed, with a further 1,295 sq.m. leased in the second quarter. * 887 sq.m. were leased to Gaz Natural, effective from May. A total of 3,100 sq.m. of office space is currently available for rent. Negotiations are at an advanced stage with prospective tenants for units representing some 1,800 sq.m. The Arcs de Seine occupancy rate rose to 84% at June 30, 2014 from 81% at December 31, 2013. During the period, Cegereal kept up its marketing strategy for Arcs de Seine, the standout property in the capital's Telecommunication Valley. Leases on 1,432 sq.m. were signed with two new tenants, BBC and Sagem, which came into effect during the second quarter. Arcs de Seine is the fourth office building in France to earn dual HQE Exploitation and BREEAM In-Use International Very Good environmental certification. Its main tenants include Canal+, Hewlett Packard and Huawei. As of June 30, 2014, there was only 7,000 sq.m. of office space remaining to be let out of the 40,000 sq.m. put on the market on completion of the refurbishment program. The 30,000-sq.m. Rives de Bercy property on the banks of the Seine in Charenton is fully let to a single tenant, CrÉdit Foncier, under a 9-year lease. The property is currently undergoing an environmental audit, with HQE In-Use certification expected to be obtained before the end of the year as part of the Go Green program. * Key figures ------------------------------------------------------------------------------- (€ millions) First-half 2014 First-half 2013 Change ------------------------------------------------------------------------------- IFRS turnover 29.2 27.0 +8.1% ------------------------------------------------------------------------------- IFRS rental income 22.6 21.7 +4.3% Portfolio occupancy rate: 91.5% ------------------------------------------------------------------------------- IFRS net income 6.4 5.0 +28.3% ------------------------------------------------------------------------------- EPRA earnings 12.3 9.3 +32.5% ------------------------------------------------------------------------------- EPRA NNNAV per share excluding transfer 33.0 35.1 -6.0% costs (in €) ------------------------------------------------------------------------------- NAV per share including transfer costs 37.3 39.1 -4.5% (in €) ------------------------------------------------------------------------------- The portfolio was valued by DTZ Eurexi at €844 million excluding transfer costs (€899 million including transfer costs) as of June 30, 2014, versus €849 million excluding transfer costs as of December 31, 2013. The three properties' appraisal values, excluding transfer costs, are as follows: * Arcs de Seine:       €327m * Europlaza:             €339m * Rives de Bercy:     €178m Cegereal has a healthy balance sheet, with LTV stable at 47.4% at June 30, 2014. EPRA NNNAV excluding transfer costs stood at €33.0 per share at June 30, 2014, compared with €34.1 per share at the 2013 year-end. The decline over the period reflected dividend distributions (negative impact of €0.75 per share), earnings growth (positive impact of €0.9 per share), rent-free periods granted to new tenants (negative impact of €0.45 per share), changes in the properties' appraisal values (negative impact of €0.4 per share) and changes in the fair value of bank debt (negative impact of €0.4 per share). The significant improvement in the portfolio's rental status helped to drive an increase in cash flow to €12.9 million in first-half 2014 from €9.8 million for the year-earlier period. Note: as cash flow is very similar to EPRA earnings, from now on cash flow will no longer be included in the Company's key indicators. * An enhanced dividend-paying capacity The Company has raised its 2014 earnings per share target to over 20% and is aiming to increase the payout to shareholders by distributing an interim dividend of €0.75 per share to be paid on December 29, 2014, subject to Board approval.       ___________ About Cegereal Listed on Euronext Paris since 2006, in compartment B, Cegereal invests in modern office properties located on the outskirts of Paris that offer very high quality amenities and environmental performance. The portfolio's appraisal value, as estimated by independent valuers DTZ Eurexi as of June 30, 2014, is €844 million (excluding transfer costs). The Company had a market capitalization of €330 million as of July 21, 2014. www.cegereal.com Investor Calendar Rental income for the third quarter of 2014 will be announced before the start of trading on November 13. For more information, contact: Investor Relations RaphaËl TrÉguier +33 1 42 25 76 36 raphael.treguier@cegereal.com Media Relations AliÉnor Miens +33 1 53 32 84 77 alienor.miens@citigate.fr Interim Financial Statements (IFRS) for the six months ended June 30, 2014 Extracts from the financial report approved by the Board of Directors on July 23, 2014, following the auditors' limited review. Consolidated Statement of Comprehensive Income (IFRS) for the six months ended June 30, 2014 in thousands of euros, except per share data | | | | | |   | June 30, 2014 | Dec. 31, 2013 | June 30, 2013 | | | | | |   6 months 12 months 6 months Rental income 22 624  43 303  21 709 Income from 6 558  10 462  5 339 other services Building- (7 927)  (16 927)  (8 903) related costs Net rental 21 255  36 838  18 146 income Sale of     0 building Administrative (1 592)  (2 754)  (1 453) costs Other operating 0  (4)  0 expenses Other operating 0  0  0 income Increase in fair value of 10 172  15 386  2 678 investment property Decrease in fair value of (16 085)  (32 531)  (7 000) investment property Total change in fair value (5 913)  (17 145)  (4 322) of investment property | | | | | |Net operating |               |               |                   12 371 | | income | 13 750 | 16 935 | | | | | | | Financial 11  0  0 income Financial (7 329)  (14 994)  (7 416) expenses Net financial (7 318)  (14 994)  (7 416) expense Corporate (19)  0 0 income tax | | | | | |CONSOLIDATED |                 |                 |                     4 955 | |NET INCOME | 6 413 | 1 940 | | | | | | | of which attributable 6 413  1 940  4 955 to owners of the Company of which attributable to non- 0  0  0 controlling interests Other comprehensive 0  0  0 income of which subsequently reclassifiable 0  0  0 to "net income for the period" of which not subsequently reclassifiable 0  0  0 to "net income for the period" | | | | | |TOTAL |                 |                 | | |COMPREHENSIVE | 6 413 | 1 940 |                     4 955 | |INCOME | | | | | | | | | of which | | | attributable 6 413  |                 |                      4 955 | to owners of | 1 940 | | the Company | | | | | | | of which | | attributable | | to non- | 0| 0 0 controlling | | interests | | | | | |   |   |   |   | | | | | | |Basic and | | | | |diluted |                  |                  | | |earnings per | 0,48 | 0,15 |                         0,37| |share (in | | | | |euros) | | | | Consolidated Balance Sheet (IFRS) at June 30, 2014 in thousands of euros | | | | | |   | June 30, | Dec. 31, 2013 | June 30, | | | 2014 | | 2013 | | | | | | Non-current assets Investment 844 000  849 000  861 000 property Non-current loans 33 391  29 331  23 366 and receivables Total non-current 877 391  878 330  884 367 assets Current assets Trade accounts 8 354  12 508  11 647 receivable Other operating 2 329  261  1 749 receivables Prepaid expenses 1 182  68  1 031 Total receivables 11 865  12 837  14 428 Cash and cash 26 983  16 018  19 557 equivalents Total cash and 26 983  16 018  19 557 cash equivalents Total current 38 848  28 856  33 985 assets | | | | | |    TOTAL ASSETS |         916 238   |       907 186  |             918| | | | | 352  | | | | | | Shareholders' equity Share capital 160 470  160 470  160 470 Legal reserve and additional paid- 21 436  31 465  31 465 in capital Consolidated reserves and 294 808  292 754  292 721 retained earnings Net attributable 6 413  1 940  4 955 income Total shareholders' 483 128  486 629  489 611 equity Non-current liabilities Non-current 396 369  395 797  395 218 borrowings Other non-current borrowings and 4 161  3 469  3 489 debt Total non-current 400 531  399 266  398 707 liabilities Current liabilities Current               1 645               1 1 776 borrowings 776 Trade accounts               1 728               1 873 payable 479 Corporate income tax liability 6   0 0 Other operating             14 330               13 494 liabilities 3 762 Prepaid revenue             14 871             13 891 14 275 Total current 32 579            30 034 liabilities 21 292 Total liabilities 433 110         420 557  428 741 | | | | | | TOTAL | | | | | SHAREHOLDERS' |          916 238   |       907 186  |             918 | | EQUITY AND | | | 352   | | LIABILITIES | | | | Consolidated Statement of Cash Flows for the six months ended June 30, 2014 in thousands of euros | | | |   | June 30, 2014 | Dec. 31, | June 30, 2013 | | | 2013 | | | | | |   6 months 12 months 6 months | | | OPERATING   |   |   | ACTIVITIES | | | | | | Consolidated net income 6 413  1 940  4 955 Elimination of items related to the valuation of buildings: Fair value adjustments to investment property 5 913  17 145  4 322 Indemnity received from lessees for the replacement of components 0  0  0 Elimination of other income/expense items with no cash impact: Adjustments for loans at amortized cost 572  1 107  528 | | | |       Cash flows | | | | from operations | | | | before tax and |            12 898 |              20 192|         9 805| changes in working | | | | capital | | | | requirements   | | | | | | | | Change in amounts due to owners 10 029  0  8 692 Other changes in working capital requirements (1 704)  (15 393)  (11 294) | | | |   Change in working| | | | capital |              8 325|           (15 393) |          (2 602)| requirements  | | | | | | | | | | | |   Net cash flows | |                 | | from operating |            21 223 | 4 799 |     7 203| activities  | | | | | | | | INVESTING ACTIVITIES Acquisition of fixed assets (913)  (745)  0 Disposal of fixed assets 0  (1 045)  78 Net decrease in amounts due to fixed asset suppliers 6  0  (721) | | | |   Net cash flows | | |             | used in investing |        (906)|             (1 790)| (643)| activities  | | | | | | | | FINANCING ACTIVITIES Change in bank debt 0  0  0 Refinancing transaction costs 0  0  0 Net increase in current borrowings (131)  0  0 Net increase in other non-current borrowings and debt 693  796  817 Net decrease in other non-current borrowings and debt 0  0  0 Purchases and sales of treasury shares 116  (35)  (50) Dividends paid (10 029)  (8 674)  (8 692) | | | |   Net cash flows | | | | used in financing |    (9 352)|     (7 914)|          (7 925)| activities  | | | | | | | | | | | |   Change in cash | | | | and cash |      10 965|       (4 904)| (1 364)| equivalents  | | | | | | | |     Cash and cash equivalents at 16 018  20 921  20 921 beginning of the period* | | | |   CASH AND CASH | | | | EQUIVALENTS AT END |            26 983 |              16 018| 19 557| OF THE PERIOD  | | | | * There were no cash liabilities for any of the periods presented above. Consolidated Statement of Changes in Shareholders' Equity for the six months ended June 30, 2014 in thousands of euros | | | | | | | | | Legal | | |Shareholders'| | | | reserve | |Consolidated| equity | Non- | Total   | Share | and |Treasury|reserves and|attributable |controlling|shareholders' |capital|additional| shares | retained |to owners of | interests | equity | | paid-in | | earnings | the Company | | | | capital | | | | | ---------------+-------+----------+--------+------------+-------------+-----------+-------------- Shareholders' | | | | | | | equity at Dec.|160 470| 40 157| (568)| 293 338| 493 397| 0| 493 397 31, 2012 | | | | | | | | | | | | | |     |  | | | Comprehensive 0  0  0  4 955  4 955  0  4 955 income      - Net income for the 0  0  0  4 955  4 955  0  4 955 period      - Other comprehensive 0  0  0  0  0  0  0 income | |     |  | | |   Capital transactions 0  (8 692)  (49)  0  (8 741)  0  (8 741) with owners     - Dividends paid 0  (8 692)  0  0  (8 692)  0  (8 692) (€0.65 per share)      - Change in treasury 0  0  (49)  0  (49)  0  (49) shares held | |     |  | | | | | | | | Shareholders' | | | | | | | equity at June|160 470| 31 465|  (617)| 298 293| 489 611| 0| 489 611 30, 2013 | | | | | | | | | | | | | |     |  | | |  Comprehensive 0  0  0  (3 015)  (3 015)  0  (3 015) income (loss)     - Net income (loss) 0  0  0  (3 015)  (3 015)  0  (3 015) for the period     - Other comprehensive 0  0  0  0  0  0  0 income | |     |  | | |  Capital transactions 0  0  15  18  33  0  33 with owners     - Dividends paid 0  0  0  18  18  0  18 (€0.65 per share)     - Change in treasury 0  0  15  0  15  0  15 shares held | |     |  | | | | | | | | Shareholders' | | | | | | | equity at Dec.|160 470| 31 465| (602)| 295 296| 486 629| 0| 486 629 31, 2013 | | | | | | | | | | | | | |     |  | | | Comprehensive 0  0  0  6 413  6 413  0  6 413 income      - Net income for the 0  0  0  6 413  6 413  0  6 413 period      - Other comprehensive 0  0  0  0  0  0  0 income | |     |  | | |   Capital transactions 0  (10 029)  116  0  (9 914)  0  (9 914) with owners      - Dividends paid 0  (10 029)  0  0  (10 029)  0  (10 029) (€0.75 per share)      - Change in treasury 0  0  116  0  116  0  116 shares held | | | | | | | | Shareholders' | | | | | | | | equity at June|160 470| 21 436|   (486)| 301 709| 483 128| 0| 483 128| 30, 2014 | | | | | | | | Pdf press release: http://hugin.info/155833/R/1835810/637923.pdf This announcement is distributed by GlobeNewswire on behalf of GlobeNewswire clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Cegereal SA via GlobeNewswire [HUG#1835810]


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Thomson Reuters ONE


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters