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alstria's financial year 2008: strong stable cash flow generation
-Revenues increase by 23.6% to EUR 102.1 million
- Funds from Operations (FFO) rise by 25% to EUR 39.4 million(FFO per share EUR 0.70)
- Consolidated loss of EUR 1 per share driven by devaluation
- Dividend confirmed at same level as in 2007
- Option for dividend payment in shares offered to shareholders
alstria office REIT-AG (symbol: AOX, ISIN:DE000A0LD2U1), an internally managed Real Estate Investment Trust (REIT), which is solely focused on acquiring, owning and managing office real estate in Germany, today announced its financial results for 2008. Strong cash flow generation and operational results highlight the quality of alstria's assets and tenants, and its strength to navigate through a challenging environment
Revenue development, Funds from Operations and net income
Revenues increased by more than 23% from EUR 82.6 million in the previous year to EUR 102.1 million, mainly due to the full year accounting of assets acquired at the end of 2007. The same factor led to a 25% increase of FFO from EUR 31.5 million in the previous year to EUR 39.4 million. The strong cash generation and operational result of alstria were offset by a negative change in the real estate market that led to a negative non cash devaluation of the real estate portfolio of EUR 88 million. alstria closed its financial year with a net loss of EUR 56 million, or EUR 1 per share.
Assets and financial situation
At closing, alstria's portfolio was valued at EUR 1.8 billion, which reflects a valuation yield of 5.9% (5.4% in 2007). Net Asset Value (NAV) decreased year on year by approx. 16.2% to EUR 730 million. This decrease was mainly driven by the non cash devaluation of Investment Properties and the impact of the mark to market of hedge instruments. The NAV per share stood at EUR 13.03 down from EUR 15.55 in 2007.
alstria was in line with all its debt covenants at year end with an LTV on its main credit facility at 59.1% versus a covenant at 60%. Post closing, alstria announced that it had successfully renegotiated the debt covenant from 60% to 65% offering additional flexibility on the balance sheet.
The G-REIT equity ratio decreased to 40.3%, below the 45% requirement of the REIT law. However, this does not challenge the REIT status of alstria, as the REIT law provides for a 3 year cure period.
alstria's strong focus on asset management allowed the company to sign more than 30,000 sqm of new leases which represented more than 50% of the vacancy in the portfolio at the end of 2007. Despite the sale of fully let assets and the acquisition of one vacant asset in Hamburg, the vacancy rate was reduced from 6.5% to 5.9%. The successful lease up of alstria also allowed the company to extend its lease maturity with the average lease length remaining above ten years. Like for like rental growth over the year remained steady at 2.2%.
alstria successfully disposed selected properties in the second half of the year, at a profit to the 30 June 2008 valuation, highlighting the quality and attractiveness of its portfolio. The sold property with an overall volume of EUR 18 million generated a realised gain of EUR 1.5 million for the period.
Options for the 2008 dividend
For the financial year 2008, the management board will propose to the Annual General Meeting a dividend of EUR 28.4 million, which is equal to around EUR 0.52 per share. Furthermore, alstria will offer its shareholders to opt for a dividend payment in shares. The company will use the treasury shares for that purpose, which will be offered at a discount to the market price at the time of the dividend payment. No new shares will be issued for that purpose.
For 2009, alstria expects an increase in revenues to EUR 103 million. Funds from Operations (FFO) are expected to decline from EUR 39 million to EUR 32 million mainly driven by increased financing costs expected in 2009.
"As early as January 2008 alstria was among the first companies to adjust to the new environment," says Olivier Elamine, CEO of alstria. "We decided at that time to freeze any acquisition programme, and to focus on the debt side of our balance sheet as well as on our asset management operations. These decisions allowed us to operate efficiently in the market despite challenging times by staying committed to that guidance and achieving it. The combination of an early renegotiation of the debt covenants with our banks and the strong operational results have allowed us to successfully manage our LTV covenant despite a gross drop in the portfolio value of around 8%. Due to the overall quality of our assets, the stability and quality of our cash flow positions alstria was ideally positioned to navigate through the challenging environment and deleverage efficiently."
The annual Analyst and Press Conference on March 31, 2009, can be followed live via alstria's webcast at 10:00 am CET.
This release constitutes neither an offer to sell nor a solicitation of an offer to buy any securities. As far as this press release contains forward-looking statements with respect to the business, financial condition and results of operations of alstria office REIT-AG (alstria), these statements are based on current expectations or beliefs of alstria's management. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or performance of the Company to differ materially from those reflected in such forward-looking statements. Apart from other factors not mentioned here, differences could occur as a result of changes in the overall economic situation and the competitive environment - especially in the core business segments and markets of alstria. Also, the development of the financial markets and changes in national as well as international provisions particularly in the field of tax legislation and financial reporting standards could have an effect. Terrorist attacks and their consequences could increase the likelihood and the extent of differences.alstria undertakes no obligation to publicly release any revisions or updates to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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