CPI PROPERTY GROUP
CPI PROPERTY GROUP reports financial results for the first quarter of 2019
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DGAP-News: CPI PROPERTY GROUP / Schlagwort(e):
Quartals-/Zwischenmitteilung/Immobilien
CPI PROPERTY GROUP reports financial results for the first quarter of 2019
22.05.2019 / 19:36
Für den Inhalt der Mitteilung ist der Emittent / Herausgeber verantwortlich.
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Press Release
Luxembourg, 22 May 2019
CPI PROPERTY GROUP reports financial results for the first quarter of 2019
CPI PROPERTY GROUP (hereinafter "CPIPG" the "Company" or together with its
subsidiaries the "Group"), the largest owner of income-generating real
estate in the Czech Republic, Berlin and the CEE region, hereby publishes
its financial results for the first quarter of 2019.
"In the first quarter of 2019, CPIPG continued our strong trajectory," said
Martin Nemecek, CEO of CPIPG. "Income and profitability are rising, and our
capital structure is extremely strong."
Key highlights for the first quarter of 2019, plus recent events, include:
* Total assets of EUR8.7 billion at the end of Q1, an increase of EUR0.5
billion from the end of 2018, primarily driven by an increase in cash
and cash equivalents.
* Total revenues in Q1 of EUR163 million (up 12% versus Q1 2018),
reflecting the combined effects of acquisitions in 2018 and 2019 and
3.2% like-for-like growth in rental income.
* Group occupancy increased to 94.7% in Q1, versus 94.5% at year-end.
* Funds from operations increased to EUR50 million for the quarter (up 8%
versus Q1 2018).
* EPRA NAV remained unchanged at EUR4.5 billion.
* Net Interest Coverage Ratio increased to 7.7x for Q1 2019 (compared to
4.2x for 2018), reflecting the Group's successful refinancing activities
during 2017 and 2018.
* Net Loan to Value (LTV) increased slightly from 36.7% at year-end to
37.4%.
* Unencumbered assets as a percentage of total assets rose to 67%, versus
65% at the end of 2018.
* Secured debt was reduced to 32% of total debt, relative to 37% at the
end of 2018.
* Issuance of HKD 450 million (approximately EUR50 million) of senior
bonds under the Group's EMTN programme in February 2019.
* Issuance of USD 350 million (approximately EUR312 million) of senior
bonds under the Group's EMTN programme in March 2019.
* Issuance of senior unsecured Schuldschein (assignable loans) totaling
EUR170 million in March 2019.
* New 3-year unsecured revolving credit facility of EUR510 million signed
in March 2019 with 11 regional and international banks.
* Total available liquidity at the end of Q1 of about EUR1 billion,
currently exceeds EUR1.5 billion following the issuance of hybrid bonds
in April 2019.
* The Group's EMTN programme was increased to EUR5 billion in April 2019.
"Once again, our teams delivered excellent results for the Group," said
David Greenbaum, CFO of CPIPG. "We remain focused on creating long-term
sustainable value for all our stakeholders, and will continue investing in
our portfolio throughout 2019."
U.S. Litigation
On 10 April 2019, a group of Kingstown companies, Investhold LTD and Verali
Limited (together, the Kingstown Plaintiffs) filed a claim in the United
States District Court of the Southern District of New York against, among
others, CPIPG and Mr Radovan Vitek. The claims brought by the Kingstown
Plaintiffs against CPIPG include alleged violations of RICO. CPIPG believes
that the claims are without merit, and were designed to create negative
press attention for CPIPG and force an undue settlement. CPIPG intends to
vigorously contest the claims and has retained an international law firm,
Hogan Lovells, with an experienced team of litigators and significant
experience in RICO cases. At this time, CPIPG has no further comments on
developments in the case, aside from the Group's previously published
statements.
FINANCIAL HIGHLIGHTS
Performance 31-Mar-19 31-Mar-18 Chang-
e
Gross rental income EUR 77 73 6%
mil-
lion
Total revenues EUR 163 145 12%
mil-
lion
Net rental income EUR 73 67 10%
mil-
lion
Consolidated adjusted EBITDA EUR 72 64 12%
mil-
lion
Funds from operations (FFO) EUR 50 46 8%
mil-
lion
Profit before tax EUR 33 29 17%
mil-
lion
Net Interest expense EUR (9) (19) (50%)
mil-
lion
Net profit for the period EUR 29 24 23%
mil-
lion
Assets 31-Mar-19 31-Dec-18 Chang-
e
Total assets EUR 8,719 8,259 6%
mil-
lion
Property Portfolio EUR 7,594 7,555 1%
mil-
lion
Gross leasable area* sqm 3,308,000 3,318,000 0%
Occupancy % 94.7 94.5 0.2
p.p.
Total number of properties** No. 376 375 0%
Total number of residential units No. 11,915 11,917 0%
Total number of hotel beds*** No. 11,670 11,300 3%
* Excluding hotels ** Excluding
residential properties in the Czech
Republic *** Including hotels
operated, but not owned by the Group
Financing structure 31-Mar-19 31-Dec-18 Chang-
e
Total equity EUR 4,384 4,362 0.5%
mil-
lion
EPRA NAV EUR 4,494 4,480 0%
mil-
lion
Net debt EUR 2,842 2,775 2.4%
mil-
lion
Loan to value ratio (Net LTV) % 37.4 36.7 0.7
p.p.
Secured consolidated leverage ratio % 12.2 12.9 (0.7
p.p.)
Secured debt to total debt % 31.8 36.7 (4.9
p.p.)
Unencumbered assets to total assets % 66.7 65.1 1.6
p.p.
Net ICR mul- 7.7x 4.2x 3.5x
ti-
ple
STATEMENT OF COMPREHENSIVE INCOME
The income statement for the 3 months period ended on 31 March 2019 and 31
March 2018 was as follows:
INCOME STATEMENT (EUR 31-M- 31-M-
million) ar-1- ar-1-
9 8
Gross rental income 77 73
Service charge and other 31 28
income*
Cost of service and other (23) (21)
charges*
Property operating expenses (12) (13)
Net rental income 73 67
Development sales 15 7
Development operating (15) (8)
expenses**
Net development income - (1)
Hotel revenue 19 18
Hotel operating expenses (17) (15)
Net hotel income Revenues 2 3
from other business
operations
Other business revenue 21 19
Other business operating (12) (12)
expenses**
Net other business income 9 7
Total revenues* 163 145
Total direct business (79) (69)
operating expenses*
Net business income 84 76
Net valuation gain / 4 (5)
(loss)***
Amortization, depreciation (14) (7)
and impairment
Administrative expenses (12) (12)
Other operating income 1 1
Other operating expenses (2) (1)
Operating result 61 52
Interest income 3 4
Interest expense (12) (23)
Other net financial (18) (4)
result***
Net finance costs (27) (23)
Share of profit of - -
equity-accounted investees
(net of tax)
Profit before income tax 33 29
Income tax expense (4) (5)
Net profit from continuing 29 24
operations
* In connection with the adoption of IFRS 15, the Group changed, in respect
of service charges, revenue recognition from net to gross, before deduction
of cost of services (refer to the annual management report for 2018 for
further detail). The presentation of the statement of profit or loss for the
three months period of 2018 was adjusted due to the changes in the
accounting policy as follows:
31 March Effect of IFRS 15 31 March 2018
2018 adoption Adjusted
Gross rental income 73 - 73
Net service revenue 7 (7) -
Service charge and other - 28 28
income
Cost of service and other - (21) (21)
charges
Property operating expense (13) - (13)
Net rental income 67 - 67
Total revenues 124 21 145
Total direct business (48) (21) (69)
operating expenses
Net business income 76 - 76
** To provide reliable and more relevant information, the Group reclassified
(firstly as at 31-Dec-2018) the following items, which are no longer
presented separately, in the consolidated financial statements:
* Cost of goods sold related to Development sales and Other business were
reclassified to Development operating expenses and Other business
operating expenses. Comparative information of EUR 7 million and EUR 1
million as at 31 March 2018 was adjusted accordingly.
*** The Group reclassified effect of changing foreign exchange rates on the
revaluation of the investment properties from the Other net financial result
to the Net valuation gain or loss. Management finds the adjusted
presentation reliable and more relevant, because the effect is already
included in determination of the fair value of the relevant investment
properties by the Group's subsidiaries.
Comparative information as of 31 March 2018 was adjusted accordingly. The
change in the accounting policy had no impact on the statement of financial
position, the impact on the statement of comprehensive income is presented
in the table below:
31 March Effect of the 31 March 2018
2018 accounting policy Adjusted
change
Net business income 76 - 76
Net valuation gain (3) (2) (5)
Operating result 54 (2) 52
Other net financial (6) 2 (4)
result
Net finance costs (25) 2 (23)
Profit before income 29 - 29
tax
Net profit from 24 - 24
continuing operations
Net rental income
Net rental income increased by 10% to EUR73 million compared to EUR67
million in Q1 2018, driven primarily by an increase in gross rental income
reflecting 2018's acquisitions of Futurum Hradec Králové shopping centre
(net increase of EUR2 million) and Atrium office complex in Poland (net
increase of EUR1.6 million). The better performance of our Berlin portfolio
(net increase of EUR2.2 million) contributed to the overall increase in net
rental income.
Net development income
Development sales in Q1 2019 were represented by sales of apartments in Nice
(revenue of EUR11.6 million) and sales of family houses in Bezinves
(revenue of EUR3.3 million).
Net valuation gain / (loss)
Valuation gain in Q1 2019 relates mainly to an FX gain on our property
portfolio.
Amortization, depreciation and impairments
The increase in amortization, depreciation and impairments in Q1 2019 was
affected by the write-off of goodwill (EUR7 million), which was recognized
in 2014 in connection with the acquisition of the Group's agriculture
business.
Interest expense
Interest expense was EUR12 million in Q1 2019 compared to EUR23 million in
Q1 2018. Interest expense dropped due to the substantial change in the
Group's financing structure, resulting into a significant decrease in
interest expense from bank loans (net decrease of EUR4.7 million) and bonds
(net decrease of EUR5.4 million).
Other net financial result
Other net financial result in Q1 2019 was adversly affected by foreign
exchange losses of EUR14 million.
BALANCE SHEET
BALANCE SHEET (EUR million) 31-Mar-19 31-Dec-18
NON-CURRENT ASSETS
Intangible assets and goodwill 103 110
Investment property 6,717 6,687
Property, plant and equipment 754 736
Deferred tax assets 195 195
Other non-current assets 135 91
Total non-current assets 7,904 7,819
CURRENT ASSETS
Inventories 64 72
Trade receivables 83 68
Cash and cash equivalents 464 99
Assets linked to assets held for sale 61 67
Other current assets 143 134
Total current assets 815 440
TOTAL ASSETS 8,719 8,259
EQUITY
Equity attributable to owners of the Company 3,789 3,776
Perpetual notes 549 542
Non-controlling interests 46 44
Total equity 4,384 4,362
NON-CURRENT LIABILITIES
Bonds issued 2,011 1,648
Financial debts 1,178 1,062
Deferred tax liabilities 761 762
Other non-current liabilities 58 53
Total non-current liabilities 4,008 3,525
CURRENT LIABILITIES
Bonds issued 15 7
Financial debts 103 158
Trade payables 85 98
Other current liabilities 124 109
Total current liabilities 327 372
TOTAL EQUITY AND LIABILITIES 8,719 8,259
Total assets
Total assets increased by EUR460 million (6%) to EUR8,719 million as at 31
March 2019. The predominant driver of this growth was the increase in cash
and cash equivalents by EUR365 million.
Increase in investment property by EUR29 million reflects primarily capex
and development costs incurred in Q1 2019. Due to the acquisition of Orchard
hotel in Ostrava the Group's property portfolio rose by of EUR11 million.
Total liabilities
Non-current and current liabilities totalled EUR4,335 million as at 31 March
2019, an increase of EUR438 million (11.2%) compared to 31 December 2018.
During the first quarter, the Group raised USD bonds (EUR312 million), HKD
bonds (EUR50 million), and Schuldschein (EUR170 million). The Group also
signed a new secured bank loan of EUR170 million from Unicredit Bank AG and
repaid loans totaling EUR102 million.
NAV AND EPRA NAV
Total equity increased from EUR4,362 million as at 31 December 2018 to
EUR4,384 million as at 31 March 2019. The main elements impacting equity
were:
* an increase in equity due to profit for three months of 2019 in the
amount of EUR29 million;
* a decrease by EUR12 million due to a shift in hedging and translation
reserves;
* an increase by EUR5 million due to the change in revaluation reserve.
EPRA NAV was EUR4,494 million as at 31 March 2019, an increase of 0.3%
relative to 31 March 2018. The main positive effect was the positive equity
elements described above.
EPRA NAV (EUR million) 31-Ma- 31-De-
r-19 c-18
Equity per the financial statements (NAV) 3,790 3,776
Effect of exercise of options, convertibles and 0 0
other equity interests
Diluted NAV, after the exercise of options, 3,790 3,776
convertibles and other equity interests
Revaluation of trading property and PPE 5 7
Fair value of financial instruments (3) (5)
Deferred tax on revaluations 745 745
Goodwill as a result of deferred tax (43) (43)
Total 4,494 4,480
Investor Contact:
David Greenbaum
Chief Financial Officer
CPI Property Group
d.greenbaum@cpipg.com
Media / PR Contact:
Kirchhoff Consult AG
Andreas Friedemann
Borselstraße 20
22765 Hamburg
T +49 40 60 91 86 50
F +49 40 60 91 86 16
E andreas.fridemann@kirchhoff.de
GLOSSARY
Alter- Definition Rationale
nati-
ve
Per-
for-
mance
Measu-
res
(APM)
EPRA Net Asset Value adjusted Makes adjustments to IFRS NAV to
NAV to include properties provide stakeholders with the most
and other investment relevant information on the fair
interests at fair value value of the assets and
and to exclude certain liabilities within a true real
items not expected to estate investment company with a
crystallise in a long-term investment strategy.
long-term investment
property business model.
Lo- It is calculated as Net Loan-to-value provides a general
an-to- debt divided by fair assessment of financing risk
-Va- value of Property undertaken.
lue Portfolio.
or
Net
LTV
Net It is calculated as This measure is an important
ICR Consolidated adjusted indicator of a firm's ability to
EBITDA divided by a sum pay interest and other fixed
of interest income as charges from its operating
reported and interest performance, measured by EBITDA.
expense as reported.
Secu- It is calculated as a This measure is an important
red sum of secured bonds and indicator of a firm's financial
debt secured financial debts flexibility and liquidity. Lower
to as reported divided by a levels of secured debt typically
total sum of bonds issued and also means lower levels of
debt financial debts as mortgage debt - properties that
reported. are free and clear of mortgages
are sources of alternative
liquidity via the issuance of
property-specific mortgage debt,
or even sales.
Unen- It is calculated as This measure is an important
cumbe- total assets as reported indicator of a commercial real
red less a sum of encumbered estate firm's liquidity and
as- assets as reported flexibility. Properties that are
sets divided by total assets free and clear of mortgages are
to as reported. sources of alternative liquidity
total via the issuance of
as- property-specific mortgage debt,
sets or even sales. The larger the
ratio of unencumbered assets to
total assets, the more flexibility
a company generally has in
repaying its unsecured debt at
maturity, and the more likely that
a higher recovery can be realized
in the event of default.
Conso- Net business income as This is an important economic
lida- reported deducted by indicator showing a business's
ted administrative expenses operating efficiency comparable to
adjus- as reported. other companies, as it is
ted unrelated to the Group's
EBITD- depreciation and amortization
A policy and capital structure or
tax treatment. It is one of the
fundamental indicators used by
companies to set their key
financial and strategic
objectives.
Funds It assumes net income Funds from operations provide an
from (computed in accordance indication of core recurring
opera- with IFRS), excludes earnings.
tions non-recurring (non-cash)
or items like gains (or
FFO losses) from sales of
property and inventory,
impact of derivatives
revaluation and
impairment transactions.
Calculation excludes
accounting adjustments
for unconsolidated
partnerships and joint
ventures.
Secu- Secured consolidated This measure is an important
red leverage ratio is a indicator of a firm's financial
conso- ratio of a sum of flexibility and liquidity. Lower
lida- secured financial debts levels of secured debt typically
ted and secured bonds to also means lower levels of
lever- Consolidated adjusted mortgage debt - properties that
age total assets. are free and clear of mortgages
ratio Consolidated adjusted are sources of alternative
total assets is total liquidity via the issuance of
assets as reported property-specific mortgage debt,
deducted by intangible or even sales.
assets and goodwill as
reported.
Non-finan- Definition
cial
definiti-
ons
Company CPI Property Group S.A.
Property The sum of value of Property Portfolio owned by the Group
Portfolio
value or
PP value
Gross Gross leasable area is the amount of floor space
Leasable available to be rented. Gross leasable area is the area
Area or for which tenants pay rent, and thus the area that
GLA produces income for the property owner.
Group CPI Property Group S.A. together with its subsidiaries
Net debt Net debt is borrowings plus bank overdraft less cash and
cash equivalents.
Occupancy Occupancy is a ratio of estimated rental revenue
regarding occupied GLA and total estimated rental
revenue, unless stated otherwise.
Property Property Portfolio covers all properties held by the
Portfolio Group, independent of the balance sheet classification,
from which the Group incurs rental or other operating
income.
APM RECONCILIATION
EPRA NAV reconciliation (EUR million) 31-Ma- 31-De-
r-19 c-18
Equity per the financial statements (NAV) 3,790 3,776
Effect of exercise of options, convertibles and 0 0
other equity interests
Diluted NAV, after the exercise of options, 3,790 3,776
convertibles and other equity interests
Revaluation of trading property and PPE 5 7
Fair value of financial instruments (3) (5)
Deferred tax on revaluation 745 745
Goodwill as a result of deferred tax (43) (43)
EPRA NAV 4,494 4,480
Net LTV reconciliation (EUR million) 31-Mar-19 31-Dec-18
Financial debts 1,281 1,219
Bonds issued 2,026 1,655
Net debt linked to AHFS 0 0
Cash and cash equivalents (464) (99)
Net debt 2,842 2,775
Total property portfolio 7,594 7,555
Net LTV 37.4% 36.7%
Net Interest coverage ratio reconciliation (EUR 31-Mar-- 31-Dec--
million) 19 18
Interest income 3 14
Interest expense (12) (78)
Net Business Income 84 320
Administrative expenses (12) (49)
Net Interest coverage ratio 7.7x 4.2x
Secured debt as of Total debt reconciliation 31-Mar-- 31-Dec--
(EUR million) 19 18
Secured bonds 0 0
Secured financial debts 1,052 1,055
Total debts 3,306 2,874
Secured debt as of Total debt 31.8% 36.7%
Unencumbered assets reconciliation (EUR 31-Mar-1- 31-Dec-1-
million) 9 8
Bonds collateral 0 0
Bank loans collateral 2,902 2,883
Total assets 8,719 8,259
Unencumbered assets ratio 66.7% 65.1%
Consolidated adjusted EBITDA reconciliation (EUR 31-Mar-- 31-Mar--
million) 19 18
Net business income 84 76
Administrative expenses (12) (12)
Consolidated adjusted EBITDA 72 64
Funds from operations reconciliation (EUR 31-Mar-- 31-Mar--
million) 19 18
Net profit for the period 29 24
Deferred income tax 1 3
Net valuation gain or loss on investment (4) 3
property
Net valuation gain or loss on revaluation of (4) 1
derivatives
Net gain or loss on disposal of investment 0 0
property
Net gain or loss on disposal of inventory 0 0
Net gain or loss on disposal of assets (1) 0
Amortization, depreciation and impairments 14 7
Other non-recurring / non-cash items 16 9
Funds from operations 50 46
Secured consolidated leverage ratio 31-Mar-- 31-Dec--
reconciliation (EUR million) 19 18
Secured bonds 0 0
Secured financial debts 1,052 1,055
Consolidated adjusted total assets 8,616 8,149
Secured consolidated leverage ratio 12.2% 12.9%
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22.05.2019 Veröffentlichung einer Corporate News/Finanznachricht,
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Sprache: Deutsch
Unternehmen: CPI PROPERTY GROUP
40, rue de la Vallée
L-2661 Luxembourg
Luxemburg
Telefon: +352 264 767 1
Fax: +352 264 767 67
E-Mail: contact@cpipg.com
Internet: www.cpipg.com
ISIN: LU0251710041
WKN: A0JL4D
Börsen: Regulierter Markt in Frankfurt (General Standard);
Freiverkehr in Düsseldorf, Stuttgart
EQS News ID: 814871
Ende der Mitteilung DGAP News-Service
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814871 22.05.2019
°
CPI PROPERTY GROUP reports financial results for the first quarter of 2019
Am 22. Mai 2019 um 19:38 Uhr
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