2014 1ST HALF RESULTS
(Actusnews (France) Via Acquire Media NewsEdge) Rental income: €35.5 million (+16.3%)Cash flow from operations: €17.9 million (+10.5%)€11.3 million gain on residential and regional asset disposals2014 Interim dividend: €0.34 per share on 14 November (+6%) Continuation of the strategy of focusing on commercial property in the Paris Central Business District
The Board of Directors held on July 30 th 2014 has approved the consolidated financial statements for the 1 st half of 2014. Legal auditors have carried out a limited review of the interim financial statements. Their report is about to be issued.
Key consolidated figures
(In millions of euros)
1 st half
1 st half
Current operating income (before disposals)
Gains on disposals
Net income (group share)
Cash flow from operations (before disposals)
Interim dividend (€/share)
16.3% growth in rental income; occupancy rate of commercial property above 95%
TERREÏS' rental income amounted to €35.5 million in the 1 st half of 2014, an increase of 16.3% compared with the 1 st half of 2013. This progression is due to the net external growth of the real estate portfolio (+18.7 % due to acquisitions and -1.4 % due to disposals).
Rental income (€)
1 st Half
2 nd Quarter
Breakdown of rental incomes shows the effect of the ongoing strategy of refocusing on the tertiary assets in the Paris Central Business District:
Increase in the relative share of rental income from tertiary assets (92% vs 90% on 1 st half of 2013), as a result of the increase in tertiary portfolio and, at the same time, the continuous decrease of the share relative to residential assets, sold when they are vacant;
Increase in rental income from Parisian assets (78% vs 73 % on 1st half of 2013).
For the 1st half of 2014, financial occupancy rate on tertiary portfolio was above 95%, comparable to the level achieved in the 1st half of 2013.
Increase in EBITDA/Rental income margin; Cash flow up by around 13%
EBITDA amounted to €32.2 million, up 17.9% on the 1 st half of 2013. That performance was due to the tight control over expenses with, in particular, the noticeable decrease in rental and management fees, partly replaced by additional staff charges as a result of the consolidation of Imodam, management firm of the Group. EBITDA/Rental income margin was up 1 point at 91%.
After a 25.4% increase in depreciation, due to the significant development of assets, current operating income before disposals stood at €18.4 million, up 12.6%.
The program of on-selling regional and residential assets was actively pursued. Disposals represented €14.4 million in the 1 st half of 2014, generating €11.3 million in accounting gains (compared to the particularly high level of €14.1 million generated on 1 st half of 2013. Taking those into account, operating income was slightly below the level of 1 st half 2013 (€29.5 million vs €30.4 million).
After the net cost of financial debt of €13.5 million, net income stood at €15.3 million (€19.2 million on 1 st half of 2013).
Cash flow from operations (after net cost of financial debt and taxes) reached €17.9 million, up 10.5%, or €0.71/share vs €0.64/share on 1 st half of 2013. After disposals, cash flow from operations stood at €32.4 million (€45.6 million on 1 st half of 2013).
Disposals of regional and residential assets for €14.4 million in line with the annual program
TERREÏS pursued the liquidizing strategy of its regional and residential assets with disposals amounting to €14.4 million during the 1 st half of 2014, above appraisal values and in line with the annual program. In addition, €14.7 million of asset disposals under promises have to be accounted for over the next few months.
€82 million investments in the Paris Central Business District
At the same time, TERREÏS reinforced its tertiary portfolio in the Paris Central Business District with the acquisition of an outstanding 6,157 sq. m. office building (+ 40 parking spaces) located in the middle of the CBD, 41 avenue de Friedland (Paris 8 e). €50 million were financed through a 15 year redeemable loan based on a 2.9% fixed rate.
TERREÏS also acquired a 900 sq. m. offices plateau (+ 24 parking spaces), 43/47 avenue de la Grande Armée (Paris 17 e).
All these investments will generate a 5.05% yield on a full year basis.
Sound financial structure with a secured long term financing
At 30 June 2014, consolidated shareholders equity was €211.4 million and net financial debt amounted to €775.7 million.
TERREÏS' long term financing remains particularly comfortable: excluding short-term debts, 93% of loans are redeemable and are very largely swapped variable rate loans with an average maturity of 12 years.
€ 0.34/share interim dividend, paid on 14 November 2014
TERREÏS has traditionally paid its dividend in two instalments, in the form of an interim payment, followed by payment of the balance in May. Given the results for the 1 st half of 2014, and the business outlook for the year as a whole, the Board of Directors has decided to set the 2014 interim dividend at €0.34 per share, an increase of 6% compared with the interim dividend paid last year. This interim dividend will be paid on 14 November this year.
Outlook: ongoing refocus on high-quality Paris office real estate
TERREÏS' long-term goal is to substantially increase its Paris commercial property portfolio, and to focus on Paris CBD. Nevertheless, the current conditions of the prime Parisian market (yield significantly down and metric prices too high) do not favour opportunistic acquisitions.
As a consequence, TERREÏS will concentrate over the 2 nd half of 2014 on the disposal of its regional and residential assets.
Publication of the sales figures for the 3 rd quarter of 2014 on 22 october 2014
Contact: Fabrice Paget-Domet, Chief Executive Officer - Tel: 33 (0)1 82 00 95 23
Olivier Froc, Chief Executive Officer, Ovalto Investissement - Tel: 33 (0)1 82 00 95 14
About TERREÏS (www.terreis.fr) ISIN: FR0010407049 - Mnemonic: TER
TERREÏS is a real estate company where the assets consist of offices and retail premises that are primarily located in the Paris CBD. TERREÏS has been listed on the NYSE Euronext regulated market in Paris since December 2006, and has been included in Compartment B since January 2012. The Group has opted for the status of listed property investment company (“SIIC”) since 1 January 2007. Its shares have been included in the SBF250 Index (now the CAC-All Tradable Index) since September 2010.
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