DGAP-News: CPI Property Group – Financial Results for the Third Quarter of 2020by CPI Property Group SA [O5GX:GER]
:
/ Key word(s): Quarter Results
– Financial Results for the Third Quarter of 2020
/ 08:34
The issuer is solely responsible for the content of this announcement.
(société anonyme)
40, rue de la Vallée
L-2661 Luxembourg
: B 102 254
PRESS RELEASE
Luxembourg,
“CPIPG’s excellent performance continues despite uncertainty and new challenges, thanks to the quality of our assets and the expertise of our local teams,” said
Key highlights for the third quarter of 2020 include:
– CPIPG’s property portfolio increased by 8% to
– Total assets increased by 6% to
– Net rental income increased by 15% to
– Consolidated adjusted EBITDA increased by 15% to
– Net business income and funds from operations (FFO) were stable compared to the first nine months of 2019 at
– Net Interest Coverage Ratio (Net ICR) at 5.6x and
– During the third quarter of 2020, the Group issued HUF 30 billion (
– In
– In addition to the refinancing of a portion of the 2023 hybrid and 2022 unsecured notes, the Group also repaid
– Total available liquidity at the end of Q3 was more than
Recent COVID-19 Developments
– On
– Following significant declines in new cases and deaths in recent weeks, on 29 November the Czech government provisionally permitted all retail including shopping centres to reopen from Thursday 3 December – at which point nearly all of the Group’s portfolio will be open;
– Some restrictions remain in force in other countries; for example, all non-essential retail closed in
Rent Collection Rates
– Collection rates have remained consistently strong throughout the year. In the first 9 months of 2020, the Group collected 95% of rent before the impact of one-time COVID-19 discounts and 99% after discounts;
– On 26 October, the Group reported that it had collected 95% of third quarter rents before the impact of one-time COVID-19 discounts and 97% after discounts. As the group has continued to invoice and collect rents after the period, third quarter collections have improved to 96% and 98% respectively;
– 94% of rent before discounts was collected in October. This is expected to increase as invoicing and collections continue beyond the end of the period.
| % of rent collected | ||||||
| % of portfolio (Q3 2020) | Q3 YTD before discounts | Q3 YTD after discounts | Q3 before discounts | Q3 after discounts | October before discounts | |
| Group | — | 95% | 99% | 96% | 98% | 94% |
| Office | 52% | 99% | 99% | 99% | 99% | 95% |
| Retail | 22% | 89% | 97% | 91% | 96% | 91% |
| Residential | 7% | 99% | 99% | 99% | 99% | 96% |
Notable events occurring after the end of Q3 2020
– On
– On
– On
“CPIPG is proud of our achievements thus far in 2020, and we look forward to a successful finish to the year,” said
FINANCIAL HIGHLIGHTS
| Performance | Q3 YTD 2020 | Q3 YTD 2019 | Change | |||||
| Gross rental income | € million | 264 | 234 | 13% | ||||
| Net rental income | € million | 251 | 217 | 15% | ||||
| Total revenues | € million | 451 | 491 | (8%) | ||||
| Net business income | € million | 260 | 261 | 0% | ||||
| Consolidated adjusted EBITDA | € million | 257 | 223 | 15% | ||||
| Funds from operations (FFO) | € million | 173 | 171 | 1% | ||||
| Net profit for the period | € million | 58 | 221 | (74%) | ||||
| Assets | Change | |||||||
| Total assets | € million | 11,267 | 10,673 | 6% | ||||
| Property portfolio | € million | 9,860 | 9,111 | 8% | ||||
| Gross leasable area | sqm | 3,572,000 | 3,465,000 | 3% | ||||
| Occupancy | % | 94.0 | 94.3 | (0.3 p.p.) | ||||
| Like-for-like gross rental growth* | % | 1.9 | 4.4 | (2.5 p.p.) | ||||
| Total number of properties** | No. | 338 | 332 | 2% | ||||
| Total number of residential units | No. | 11,927 | 11,919 | 0% | ||||
| Total number of hotel beds*** | No. | 12,276 | 12,416 | (1%) | ||||
| * Based on headline rent, excluding one-time discounts ** Excluding residential properties in the *** Including hotels operated, but not owned by the Group | ||||||||
| Financing structure | Change | |||||||
| Total equity | € million | 5,555 | 5,469 | 2% | ||||
| EPRA NRV (NAV) | € million | 4,844 | 5,100 | (5%) | ||||
| Net debt | € million | 4,046 | 3,300 | 23% | ||||
| % | 41.0 | 36.2 | 4.8 p.p. | |||||
| Secured consolidated leverage ratio | % | 11.0 | 9.6 | 1.4 p.p. | ||||
| Secured debt to total debt | % | 26.4 | 24.8 | 1.6 p.p. | ||||
| Unencumbered assets to total assets | % | 70.1 | 69.7 | 0.4 p.p. | ||||
| Net ICR | 5.6x | 7.2x | (1.6x) | |||||
STATEMENT OF COMPREHENSIVE INCOME*
The income statement for the nine-month period ended
| INCOME STATEMENT (€ million) | ||||
| Gross rental income | 264 | 234 | ||
| Service charge and other income | 96 | 88 | ||
| Cost of service and other charges | (72) | (62) | ||
| Property operating expenses | (37) | (43) | ||
| Net rental income | 251 | 217 | ||
| Development sales | 17 | 32 | ||
| Development operating expenses | (16) | (30) | ||
| Net development income | 1 | 2 | ||
| Hotel revenue | 37 | 103 | ||
| Hotel operating expenses | (37) | (68) | ||
| Net hotel income Revenues from other business operations | – | 35 | ||
| Other business revenue | 37 | 34 | ||
| Other business operating expenses | (29) | (27) | ||
| Net other business income | 8 | 7 | ||
| Total revenues | 451 | 491 | ||
| Total direct business operating expenses | (191) | (230) | ||
| Net business income | 260 | 261 | ||
| Net valuation gain (net of foreign exchange gain) | (11) | 89 | ||
| Net gain or loss on the disposal of inv. prop. and subsidiaries | 1 | – | ||
| Amortization, depreciation and impairment | (63) | (25) | ||
| Administrative expenses | (34) | (38) | ||
| Other operating income | 4 | 8 | ||
| Other operating expenses | (2) | (4) | ||
| Operating result | 155 | 291 | ||
| Interest income | 12 | 9 | ||
| Interest expense | (58) | (37) | ||
| Other net financial result** | (19) | (14) | ||
| Net finance costs | (65) | (42) | ||
| Profit before income tax | 90 | 249 | ||
| Income tax expense | (32) | (28) | ||
| Net profit from continuing operations | 58 | 221 | ||
* The presented financial statements do not represent a full set of interim financial statements as if prepared in accordance with IAS 34.
** Including net foreign exchange gains and losses (including valuation gains classified within valuation gain under IFRS), share of profit of equity accounted investees and other financial gains and losses.
Gross rental income
Gross rental income increased by
Net hotel income
Because of lockdowns and travel restrictions related to the COVID-19 outbreak, hotel revenue decreased by
Net valuation loss
The valuation loss of
Amortization, depreciation and impairment
Amortization, depreciation and impairment increased by
Interest expense
Interest expense increased by
to
in the period as the Group increased gross debt to fund acquisitions.
BALANCE SHEET*
| BALANCE SHEET (€ million) | ||
| NON-CURRENT ASSETS | ||
| Intangible assets and goodwill | 101.8 | 107.0 |
| Investment property | 8,390.9 | 8,156.8 |
| Property, plant and equipment | 771.0 | 885.7 |
| Deferred tax assets | 142.0 | 168.1 |
| Equity accounted investees | 657.5 | 3.7 |
| Other non-current assets | 297.4 | 242.5 |
| Total non-current assets | 10,360.6 | 9,563.8 |
| CURRENT ASSETS | ||
| Inventories | 45.1 | 51.2 |
| Trade receivables | 70.4 | 80.9 |
| Cash and cash equivalents | 611.3 | 804.5 |
| Assets linked to assets held for sale | 11.3 | 21.5 |
| Other current assets | 168.6 | 150.9 |
| Total current assets | 906.7 | 1,109.0 |
| TOTAL ASSETS | 11,267.3 | 10,672.8 |
| EQUITY | ||
| Equity attributable to owners of the Company | 4,116.8 | 4,334.2 |
| Perpetual notes | 1,390.2 | 1,085.5 |
| Non-controlling interests | 48.2 | 49.8 |
| Total equity | 5,555.2 | 5,469.5 |
| NON-CURRENT LIABILITIES | ||
| Bonds issued | 3,273.6 | 2,870.9 |
| Financial debts | 1,157.1 | 1,165.3 |
| Deferred tax liabilities | 769.3 | 805.9 |
| Other non-current liabilities | 112.1 | 73.9 |
| Total non-current liabilities | 5,312.1 | 4,916.0 |
| CURRENT LIABILITIES | ||
| Bonds issued | 37.6 | 20.8 |
| Financial debts | 189.0 | 47.7 |
| Trade payables | 57.7 | 86.0 |
| Other current liabilities | 115.7 | 132.8 |
| Total current liabilities | 400.0 | 287.3 |
| TOTAL EQUITY AND LIABILITIES | 11,267.3 | 10,672.8 |
* The presented financial statements do not represent a full set of interim financial statements as if prepared in accordance with IAS 34
Total assets
Total assets increased by
to
Total liabilities
Total liabilities increased by
EQUITY AND EPRA NRV
Total equity increased by
to
– Increase of retained earnings due to the profit for the period of
– Increase of perpetual bonds by
– Decrease in revaluation and hedging reserve of
– Decrease in translation reserve of
– Decrease in non-controlling interest of
EPRA NRV was
| Equity attributable to the owners (NAV) | 4,117 | 4,334 |
| Effect of exercise of options, convertibles and other equity interests | – | – |
| Diluted NAV | 4,117 | 4,334 |
| Revaluation of trading property and PPE | 1 | 2 |
| Fair value of financial instruments | 0 | 0 |
| Deferred tax on revaluations | 769 | 807 |
| (43) | (43) | |
| EPRA NRV (€ million) | 4,844 | 5,100 |
GLOSSARY
| Alternative Performance Measures (APM) | Definition | Rationale | ||
| Consolidated adjusted EBITDA | Net business income as reported deducting administrative expenses as reported. | This is an important economic indicator showing a business’s operating efficiency comparable to other companies, as it is unrelated to the Group’s depreciation and amortization 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. | ||
| Consolidated adjusted total assets | Consolidated adjusted total assets is total assets as reported deducting intangible assets and goodwill as reported. | |||
| EPRA Net Reinstatement Value (NRV) (former EPRA NAV) | Net Asset Value adjusted to include properties and other investment interests at fair value and to exclude certain items not expected to crystallise in a long-term investment property business model. | Makes adjustments to IFRS NAV to provide stakeholders with the most relevant information on the fair value of the assets and liabilities within a true real estate investment company with a long-term investment strategy. | ||
| Funds from operations or FFO | It is calculated as net profit for the period adjusted by non-cash revenues/expenses (e.g. deferred tax, net valuation gain/loss, impairment, amortization/depreciation, goodwill etc.) and non-recurring (both cash and non-cash) items (e.g. net gain/loss on disposals etc.). The calculation also excludes accounting adjustments for unconsolidated partnerships and joint ventures. | Funds from operations provide an indication of core recurring earnings. | ||
| It is calculated as Net debt divided by fair value of Property Portfolio. | Loan-to-value provides a general assessment of financing risk undertaken. | |||
| Net ICR | It is calculated as Consolidated adjusted EBITDA divided by a sum of interest income as reported and interest expense as reported. | This measure is an important indicator of a firm’s ability to pay interest and other fixed charges from its operating performance, measured by EBITDA. | ||
| Secured consolidated leverage ratio | Secured consolidated leverage ratio is a ratio of a sum of secured financial debts and secured bonds to Consolidated adjusted total assets. | This measure is an important indicator of a firm’s financial flexibility and liquidity. Lower levels of secured debt typically also means lower levels of mortgage debt – properties that are free and clear of mortgages are sources of alternative liquidity via the issuance of property-specific mortgage debt, or even sales. | ||
| Secured debt to total debt | It is calculated as a sum of secured bonds and secured financial debts as reported divided by a sum of bonds issued and financial debts as reported. | This measure is an important indicator of a firm’s financial flexibility and liquidity. Lower levels of secured debt typically also means lower levels of mortgage debt – properties that are free and clear of mortgages are sources of alternative liquidity via the issuance of property-specific mortgage debt, or even sales. | ||
| Unencumbered assets to total assets | It is calculated as total assets as reported less a sum of encumbered assets as reported divided by total assets as reported. | This measure is an important indicator of a commercial real estate firm’s liquidity and flexibility. Properties that are free and clear of mortgages are sources of alternative liquidity via the issuance of property-specific mortgage debt, 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. | ||
| Non-financial definitions | Definition | |||
| Company | ||||
| Property Portfolio value or PP value | The sum of value of Property Portfolio owned by the Group | |||
| Gross Leasable Area or GLA | Gross leasable area is the amount of floor space available to be rented. Gross leasable area is the area for which tenants pay rent, and thus the area that produces income for the property owner. | |||
| Group | ||||
| 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 Portfolio | Property Portfolio covers all properties and investees held by the Group, independent of the balance sheet classification, from which the Group incurs rental or other operating income. | |||
APM RECONCILIATION
| EPRA NRV reconciliation (€ million) | ||
| Equity attributable to owners of the company | 4,117 | 4,334 |
| Effect of exercise of options, convertibles and other equity interests | 0 | 0 |
| Diluted NAV, after the exercise of options, convertibles and other equity interests | 4,117 | 4,334 |
| Revaluation of trading property and property, plant and equipment | 1 | 2 |
| Fair value of financial instruments | 0 | 0 |
| Deferred tax on revaluation | 769 | 807 |
| (43) | (43) | |
| EPRA NRV | 4,844 | 5,100 |
| Net LTV reconciliation (€ million) | ||
| Financial debts | 1,346 | 1,213 |
| Bonds issued | 3,311 | 2,892 |
| Net debt linked to assets held for sale | 0 | 0 |
| Cash and cash equivalents | (611) | (805) |
| Net debt | 4,046 | 3,300 |
| Total property portfolio | 9,860 | 9,111 |
| Net LTV | 41.0% | 36.2% |
| Net Interest coverage ratio reconciliation (€ million) | ||
| Interest income | 12 | 14 |
| Interest expense | (58) | (54) |
| Consolidated adjusted EBITDA | 257 | 292 |
| Net Interest coverage ratio | 5.6x | 7.2x |
| Secured debt to total debt reconciliation (€ million) | ||
| Secured bonds | 0 | 0 |
| Secured financial debts | 1,228 | 1,017 |
| Total debts | 4,657 | 4,105 |
| Secured debt to total debt | 26.4% | 24.8% |
| Unencumbered assets to total assets reconciliation (€ million) | ||
| Bonds collateral | 0 | 0 |
| Bank loans collateral | 3,371 | 3,236 |
| Total assets | 11,267 | 10,673 |
| Unencumbered assets ratio | 70.1% | 69,7% |
| Consolidated adjusted EBITDA reconciliation (€ million)* | ||
| Net business income | 260 | 261 |
| Administrative expenses | (34) | (38) |
| Other effects | 31 | – |
| Consolidated adjusted EBITDA | 257 | 223 |
| Funds from operations (FFO) reconciliation (€ million)* | ||
| Net profit/(loss) for the period | 58 | 221 |
| Deferred income tax | 23 | 19 |
| Net valuation gain or loss on investment property** | 11 | (89) |
| Net valuation gain or loss on revaluation of derivatives | (1) | 0 |
| Net gain or loss on disposal of investment property and subsidiaries | (1) | 0 |
| Net gain or loss on disposal of inventory | (1) | (3) |
| Net gain or loss on disposal of PPE/other assets | 0 | (1) |
| Amortization, depreciation and impairments | 63 | 25 |
| Other non-recurring/non-cash items** | 3 | 0 |
| Other effects | 19 | 0 |
| Funds from operations | 173 | 171 |
| Secured consolidated leverage ratio reconciliation (€ million) | ||
| Secured bonds | 0 | 0 |
| Secured financial debts | 1,228 | 1,017 |
| Consolidated adjusted total assets | 11,165 | 10,566 |
| Secured consolidated leverage ratio | 11.0% | 9.6% |
* Includes pro-rata EBITDA / FFO for Q3 2020 of Equity accounted investees
** Adjusted, refers to paragraph 2.2 of Consolidated Financial Statements as at
| Property portfolio reconciliation (€ million) | ||
| Investment property – Office | 4,487 | 4,186 |
| Investment property – Retail | 2,126 | 2,173 |
| Investment property – Residential | 719 | 756 |
| Investment property – Land bank | 681 | 697 |
| Investment property – Development | 169 | 142 |
| Investment property – Industry & Logistics | 105 | 99 |
| Investment property – Agriculture | 95 | 101 |
| Investment property – Other | 4 | 3 |
| Property, plant and equipment – Hospitality | 660 | 775 |
| Property, plant and equipment – Mountain resorts | 79 | 76 |
| Property, plant and equipment – Agriculture | 11 | 13 |
| Property, plant and equipment – Office | 10 | 7 |
| Property, plant and equipment – Residential | 5 | 6 |
| Property, plant and equipment – Retail | 1 | 1 |
| Equity accounted investees/Other financial assets | 658 | 12 |
| Inventories – Development | 39 | 45 |
| Assets held for sale | 11 | 19 |
| Total | 9,860 | 9,111 |
For further information please contact:
INVESTORS
Chief Financial Officer
d.greenbaum@cpipg.com
Director of Capital Markets
j.weaver@cpipg.com
MEDIA/ PR
T +49 40 60 91 86 50, F +49 40 60 91 86 60
E andreas.friedemann@kirchhoff.de
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