Fair Value REIT-AG / Preliminary Results
05.03.2009
Release of a Adhoc News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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- Consolidated operating results of EUR 5.9 million before valuation result
and extraordinary factors
- Consolidated net loss of EUR 13.1 million (IFRS)
- NAV per share of EUR 8.16
- Funds from operations (FFO) amount to EUR 18.4 million
- No dividend distribution for 2008 due to set-up of a re-investment
reserve on profits from sale
Munich, March 5, 2009 - Fair Value REIT-AG recorded consolidated operating
results of EUR 5.9 million in fiscal year 2008 according to preliminary
figures. This amount is before the consideration of other operating income,
the valuation result and the market valuation of interest derivatives. The
income, which is substantially higher than forecasted, is primarily due to
profits from the sale of investment properties.
During the past fiscal year, the proportionate rental income for Fair Value
from the Direct Investments and Participation business segments totaled EUR
21.7 million. Of this amount, EUR 3.4 million is due to directly held
properties. A further EUR 18.3 million is due to participating interests in
properties held in a total of thirteen closed-end real estate funds.
In line with the real estate valuation on December 31, 2008, the
proportionate market values for the entire portfolio fell by EUR 29.3
million to EUR 244.5 million, in a year-on-year comparison (like for like).
Taking other operating income from a compensation payment for the premature
termination of a rental agreement in one of Fair Value's subsidiaries into
account, the proportionate valuation loss fell, on balance, to EUR 17.5
million or 6.4% in a year-on-year comparison.
The market valuation of interest derivatives on the balance sheet date
resulted in a proportionate downturn of EUR 6.2 million in the
corresponding item due to the lower market interest rates. Of this total a
proportionate EUR 1.5 million was recognized in income and EUR 4.7 million
was taken directly to equity.
In total, Fair Value REIT-AG thus recorded a consolidated net loss (IFRS)
of EUR 13.1 million in fiscal year 2008. A year-on-year comparison is not
meaningful, as the company only commenced its operating activities at the
start of the fourth quarter of 2007.
In the company's single entity statements according to German GAAP (HGB),
the proceeds from the participating interests were only partially
recognized in income in the amount of the profits disbursed for the period
from October 1, 2007. Correspondingly, the market-price valuation of the
properties on the balance sheet date also led to reductions in the carrying
amounts of individual participating interests. The set-up of a
re-investment reserve on parts of the profits from the sale of the office
property in Düsseldorf resulted in a slight loss for the year, with the
result that the company will not pay a dividend for the fiscal year 2008.
Consolidated total assets amounted to EUR 198 million (previous year: EUR
230 million) and equity on the balance sheet date totaled EUR 76.8 million.
This corresponds to a net asset value per share of EUR 8.16. According to
Section 15 of the German REIT Act, equity increases to around EUR 93
million as a result of the inclusion of minority interests, and thus
corresponds to 52% of immoveable assets.
During the period under review, Fair Value REIT-AG recorded a cash flow
from operating activities (Funds from Operations) of EUR 18.4 million. The
Group's cash totaled approximately EUR 14 million, and were thus up by EUR
8.7 million compared to the previous year's figure of EUR 5.4 million.
While the average term of Fair Value REIT-AG's proportionate share of the
financial liabilities sums up to around 5 years, 91% of the loan volume has
already been agreed on long-term. In 2009, only 9% of the total loan volume
is due for renewal. Fixed interest-rate agreements have been entered into
83% of Fair Value REIT-AG's proportionate liabilities. Of this total,
around half is hedged with derivative interest rate hedges, and traditional
fixed-interest contracts have been concluded for the remainder. Interest
rates have been fixed for a weighted residual period of 5.9 years, with 73%
having a term of more than 5 years. The weighted interest rate for the
fixed-interest-rate agreements is 6.10% per year.
The final figures will be published together with the 2008 annual report on
March 31, 2009 at www.fvreit.de.<End of ad hoc disclosure>
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Information and Explaination of the Issuer to this News:
Information on Fair Value for this ad hoc disclosure
Fair Value REIT-AG's operating business has progressed well in a difficult
environment, and consolidated earnings adjusted for valuations and other
operating income totaled EUR 5.9 million, surpassing the company's
forecast. In addition to net rental income, the sale of the 'Airport Office
II' property in Düsseldorf made a positive contribution to earnings.
Fair Values share of the total portfolio is 95% let and valuation losses on
this proportionate portfolio totaled 6.4% of the comparable previous year's
figure, thus reflecting the changed economic situation. At the same time,
the company had partly expected the valuation result, as the present value
of rental agreements which are above the market level for some of the
properties in the portfolio decreases over time by its very nature. The
changes in value mostly result from the higher discount and capitalization
interest rates compared to the previous year as used by the surveyor. As a
result, the valuation losses are due to the current situation on the
capital markets and are not due to the operating activities. In total, it
can be stated that the market values of the Fair Value portfolio have
remained comparatively stable.
At the same time, the strong downturn in the prime rate has depressed the
market values of the contracted interest derivatives. This applies
irrespective of the fact that the low interest rates when concluding new
financing are, at least at present, not making their way through to
investors, as banks are passing on their own refinancing costs and higher
margins to customers. Irrespective of this, it can be concluded that the
market value of interest derivatives, which has had a negative impact to
the tune of EUR 6.2 million, will be at the latest compensated for when the
contracts expire, thus having a correspondingly positive impact on
balance-sheet equity.
For reasons of prudence, the reductions in value for individual properties
thus identified have been categorized as being sustained, in particular for
the properties with rents higher than market prices. Special write-downs
were thus necessary according to German GAAP (HGB) at some of the
participating companies. As a result of this, and due to scheduled
depreciation of the properties, there were losses (HGB) in 2007 and 2008 at
some of the companies with the result that disbursements from these
participating companies could not be recognized in income, but rather that
these reduced the carrying amounts of the participations. In addition,
parts of the profits from the sale of 'Airport Office II' was booked to the
reinvestment reserve within the meaning of Section 13 of the German REIT
Act. This gives the company additional financial latitude, allowing it to
react flexibly to future changes on the market. The valuation of the
properties and the formation of reserves thus led to a slight loss (HGB).
As the HGB annual financial statements are the determining factor for
dividend payments, no dividend will be paid for the past fiscal year.
Frank Schaich, Fair Value REIT-AG's CEO, explains the 2008 earnings: 'We
fared well in the face of the turbulence during the past few months. Our
company's operations enjoyed positive growth - this is underscored by our
cash flow from operating activities of EUR 18.4 million. Fair Value has a
high level of equity and our refinancing structure is solid. We will only
have to extend a minor proportion of our liabilities during the current
fiscal year.' As a result, the CEO believes that the company is well
positioned. 'In addition, we also have a high level of cash and cash
equivalents, and thus have the latitude to secure our pending follow-on
financing and for select investments.'
Contact
Investor & Media Relations
cometis AG
Dirk Stauer
Tel: +49(0)611 - 205855-22
Fax: +49(0)611 - 205855-66
e-mail: stauer@cometis.de
DGAP 05.03.2009
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Language: English
Issuer: Fair Value REIT-AG
Leopoldstraße 244
80807 München
Deutschland
Phone: +49 (0)89 9292 815-01
Fax: +49 (0)89 9292 815-15
E-mail: info@fair-value-reit.de
Internet: www.fair-value-reit.de
ISIN: DE000A0MW975
WKN: A0MW97
Indices: RX REIT All Share Index, RX REIT Index
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Stuttgart, München
End of News DGAP News-Service
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DGAP-Adhoc: Fair Value REIT AG publishes preliminary results for 2008
| Source: EQS Group AG