alstria H1/2009 results: On track
- Revenues up 4% year-on-year to EUR 51.6 million
- Funds from operations (FFO) at EUR 16.2 million fully in line with full-year guidance
- Step by step reduction of the syndicated loan balloon
- Two disposals and one acquisition agreed
alstria office REIT-AG (symbol: AOX, ISIN: DE000A0LD2U1), an internally managed Real Estate Investment Trust (REIT) focused solely on acquiring, owning and managing office real estate in Germany, today announced its financial results for the first six months of 2009. alstria confirmed its forecasts on all key financials.
Revenues and FFO meet company's guidance
Revenues increased 4% year-on-year to EUR 51.6 million, mainly as a result of full-year consolidation of assets acquired in the first quarter 2008. Compared to the first quarter of 2009, funds from operations (FFO) for the second quarter remained stable at EUR 8 million. This results in EUR 16.2 million funds from operations (FFO) for the first six months of 2009 (vs. EUR 20.4 million in H1/2008) which is fully in line with the company's guidance of EUR 32 million for the full year.
Key financials at a glance
The EUR 3.2 million net profit generated in the second quarter partially off-set the loss for the first quarter of the year (EUR -5.5 million) resulting in a net loss of EUR 2.3 million for the first six months of 2009 compared to a loss of EUR 10.4 million in H1/2008. This loss was mainly driven by non cash devaluation of the portfolio as well as losses on derivatives (EUR 17.9 million).
As of June 30, 2009, alstria's investment property portfolio was valued at EUR 1.8 billion of which EUR 38.6 million were classified as assets held for sale.
The total equity position is EUR 688.8 million which reflects a decline of EUR 41 million compared to the beginning of the year. The main drivers for this decline were the dividend payout of EUR 28.4 million and the valuation changes of the company's interest hedging instruments. The resulting G-REIT equity ratio amounts to 38.2%.
Prospective decrease in overall financing costs
Executing its financing strategy, alstria refinanced four properties and reduced the balloon payment of its syndicated loan facility down to EUR 83 million from EUR 994 million to EUR 911 million. At the same time overall loan maturity improved as the new loan agreements have a five year maturity profile. The LTV on the syndicated loan facility stands at 59.0%, just below the company's target of 60%. As a result of the current low interest rate environment the new loan agreements allowed the company to reduce its average cost of financing from 4.8% to 4.4%(1).
As of June 30, 2009, alstria is in line with all its financial covenants.
Sale of a short term leased asset in Berlin
Following the sale of an asset in Hamburg in the first quarter, alstria agreed on the sale of a fully let asset in Berlin for around EUR 13 million. The sale of this short term leased asset brings the total asset sales for the year to a volume of around EUR 33 million. All assets were sold at a premium to both year-end and latest reported IFRS values.
Asset management remains key strategic focus
alstria successfully extended a significant portion of leases that were due to expire in 2009. Almost 70% of the EUR 4 million of rents which could be terminated this year have been renewed or replaced.
In order to increase its asset management flexibility and enhance its tenant relationship approach, alstria acquired a vacant building in the inner city centre of Hamburg. The total consideration for the 2,150 sqm office building was around EUR 3.5 million.
Following the sale of fully let assets and the acquisition of a vacant asset, the vacancy rate of the portfolio has slightly increased in percentage from 5.9% to 6.5%. In terms of square metres, this still represents around 60,000 sqm of which more than 40% is classified as strategic vacancy involving current or future redevelopment plans.
alstria confirms its forecast for the 2009 financial year for annual revenues of EUR 103 million and EUR 32 million in funds from operations (FFO), although the company would like to highlight that a potential acceleration in disposals could lead to lower annual revenues and funds from operations (FFO) as a consequence of a change in the portfolio perimeter.
"The first half of 2009 has been a very challenging environment in which alstria has scored small, but significant successes," said Olivier Elamine, CEO of alstria. "We anticipated early enough a changing environment which has, so far, allowed us to avoid extreme dilutive measures. In this process, we have strongly relied on the quality of our assets, the strength of our cash flows, and our asset management capabilities. So far, we have successfully managed to renegotiate our covenants, refinanced part of our assets, and disposed others. We are convinced that working step by step is the right approach in order to strengthen the balance sheet of the company, whilst safeguarding shareholder value".
Invitation to the conference call on August 14, 2009
The alstria management board will present the H1 results during a conference call:
- 10.00 am (CET) - conference call for analysts and journalists
Please use the following dial-in numbers:
- Germany: +49 - 6103 - 485 30 00
- UK: +44 - 207 - 153 20 27
Please note that you can watch the company presentation live as a webcast on our website (under "Investor Relations" - "Presentations and Speeches") at: www.alstria.com. As soon as the conference call begins, the presentation (and the H1 report under "Financial Publications") will be also available as a download.
(1) As of July 20, 2009
alstria office REIT-AG
alstria office REIT-AG (alstria) is an internally managed Real Estate Investment Trust (REIT) solely focused on acquiring, owning and managing office real estate in Germany. alstria was founded in January 2006 and was converted into the first German REIT in October 2007. Its headquarters are based in Hamburg.
alstria owns a diversified portfolio of properties across attractive German office real estate markets. Its current portfolio comprises 89 properties with an aggregate lettable space of approximately 933,000 sqm and is valued at approx. EUR 1.8 billion.
The alstria office REIT-AG strategy is based on active asset and portfolio management as well as on establishing and maintaining good relationships with key customers and decision makers. alstria focuses on long-term real estate value creation.
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