DGAP-News: GAGFAH S.A. / Key word(s): Quarter Results
GAGFAH S.A.: Increasing Earnings Momentum Starts Meeting External
Growth
19.11.2014 / 07:00
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Press Release: November 19, 2014
GAGFAH S.A.
2-4, rue Beck
L-1222 Luxembourg
ISIN: LU0269583422
Frankfurt Stock Exchange (Ticker Symbol: GFJ)
Regulated Market (Prime Standard)
Increasing Earnings Momentum Starts Meeting External Growth
- Continuous operational improvements with rental growth of 2.7%
year-on-year and vacancy rate of 3.6% at the end of Q3 2014
- Strong earnings growth with EUR264.8 million adjusted EBITDA (+ 6.9%)
and EUR141.3 million recurring FFO (EUR0.66 per share; + 65%; FFO yield
of 6.3% on current NAV of EUR13.92 per share)
- Purchase agreements signed for ca. 6,300 residential units
- Defined specific target regions for future acquisitions to guide
external growth
Luxembourg, November 19, 2014 - GAGFAH delivered strong results in the
third quarter and first nine months of 2014. With the operating business
well on track, the Company has also made a first step towards external
growth and signed three purchase agreements for about 6,300 residential
units during the last few weeks. Furthermore, GAGFAH has now defined
specific regions in Germany to guide future acquisition decisions in
addition to the asset-specific acquisition data.
Operations well on track
The residential net cold rent per square meter and month as of September
30, 2014 was EUR5.33, which represents a growth rate of 2.7% year-on-year
(2.5% on a like-for-like basis, adjusted for sales). The vacancy rate
declined to 3.6% at the end of Q3 after 4.8% one year ago.
Sales in line with expectations
As of September 30, 2014, GAGFAH had financially closed 571 condo sales.
Including the 55 signed transactions the Company has achieved a total
volume of 626 condo sales, which is already close to the full-year guidance
of 700 to 800 units. The gross margin for the financially closed
transactions was 26.3%, and the net cold rent multiple was 20.3x.
During the same period, GAGFAH financially closed 2,182 non-core sales and
signed sales agreements for an additional 1,247 non-core units. The
combined 3,429 units represent about 85% of the full-year guidance of 4,000
non-core units.
Strong earnings growth momentum
In spite of a 1.6% smaller portfolio base due to sales, the net operating
income (NOI) grew by EUR18.9 million (6.9%) to EUR294.6 million and was
mainly driven by net cold rent growth and vacancy reduction. On a per-unit
basis, the NOI increased by 8.5% or EUR153 per unit.
Adjusted EBITDA was up by EUR17.1 million (6.9%) to EUR264.8 million, which
reflects an improved adjusted EBITDA yield of 4.6%, compared to 4.3% one
year ago. Full-year guidance for adjusted EBITDA is between EUR350 million
and EUR354 million.
Supported by lower interest expenses, the FFO increased by EUR61.7 million
to EUR141.3 million (EUR0.66 per share). This is an increase of 65%
compared to the EUR0.40 per share for the first nine months last year. The
FFO yield on NAV improved from 4.1% one year ago to now 6.3%. Full-year
guidance for recurring FFO is between EUR185 million and EUR189 million
(EUR0.86 - EUR0.88 per share).
Portfolio valuation and sustainable EPRA NAV growth
At the end of the third quarter, the total property value was EUR7,644
million, which represents a net cold rent multiple of 13.2x and a value of
EUR881 per sqm. The Q3 portfolio valuation resulted in a small gain of
EUR44.6 million (0.6% of total portfolio value), reflecting the capex
investments and the improved operating performance. The EPRA NAV per share
as of September 30, 2014, was EUR13.92 and therefore up 6.5% compared to
the end of 2013.
Capital structure
As of September 30, 2014, the Company had a total of about EUR4.8 billion
debt outstanding with an average interest rate of 2.76% and a weighted
average maturity of 5.3 years. The LTV was at 59.5%. In light of the
continuously low interest rate environment and the larger refinancings that
mature in 2018, GAGFAH is currently analyzing different options in terms of
timing, funding sources and hedging to extend and smoothen the maturity
profile and to secure low interest rates beyond the next refinancing cycle.
Part of this strategy continues to be an LTV reduction to 53% by 2018 in
order to increase the Company's options and to be in a position to obtain
an investment grade rating for better financing terms and access to
additional funding sources.
Back on the external growth track - room for future growth clearly defined
During the last few weeks, GAGFAH signed three purchase agreements for
6,292 residential units and a combined purchase price of EUR339 million.
The weighted average value per sqm is EUR841, and the net cold rent
multiple is 13.8x. The three portfolios have an average net cold rent of
EUR5.05 per square meter and a 5.3% vacancy rate. 91% of the units are
located in GAGFAH's core regions. The closings of the transactions are
expected before the end of this year.
In terms of future acquisition potential and a sustainable, long-term view
of the business, GAGFAH has identified specific core regions to guide its
future external growth. On the basis of different analyses, statistics and
forecasts on demographics, households, employment, purchasing power etc.,
GAGFAH has identified 124 of the 402 German counties as potential core
acquisition markets. These areas are currently home to 39 million people,
which translates into ca. 20 million households.
Based on the German homeownership rate, this equals more than 11 million
rental units.
Thomas Zinnöcker, CEO of GAGFAH GROUP commented, "We are continuing our
successful path of steady and sustainable improvements. Our efforts in all
areas are bearing fruit and we are clearly seeing the evidence in our
results. We are fully on track with regards to not only our guidance for
this year but also for our medium-term outlook until 2017."
Changes in the Board of Directors
In its meeting on November 18, the Board of Directors of GAGFAH S.A.
co-opted three new Board Members, effective as of January 1, 2015:
Hendrik Jellema (from 2007 to 2014 Member of the Management Board of
GEWOBAG (Berlin Municipal Housing company with ca. 70,000 residential
units));
Daniel Just (since 2013 CEO of Bayerische Versorgungskammer (Service and
Competence Center for 12 Bavarian Public and Private Pension Schemes));
Dr. Wolfgang Ruttenstorfer (from 2002 to 2011 CEO of OMV AG (Austria's
largest listed industrial company)).
Mr. Jellema, Mr. Just and Dr. Ruttenstorfer succeed the two
Fortress-affiliated Directors, who had resigned in July following the final
placement of shares owned by Fortress funds, and Dr. Allerkamp, who will
resign with effect as of December 31, 2014 in order to take on the position
of Chairman of the Management Board of the Investitionsbank Berlin (IBB).
From January 1, 2015, onwards, the Board will consist of the following
seven Directors:
- Gerhard Zeiler, Chairman (Independent Director)
- Hendrik Jellema (Independent Director)
- Daniel Just (Independent Director)
- Dieter Ristau (Independent Director)
- Dr. Wolfgang Ruttenstorfer (Independent Director)
- Yves Wagner, Ph.D. (Independent Director)
- Thomas Zinnöcker (CEO of GAGFAH GROUP)
The management will host an earnings call today at 12:00 noon Luxembourg
time. All interested parties are welcome to participate in the live call.
You can access the conference call by dialing
- 1 866 966 9439 from the U.S.
- 0800 694 0257 from the U.K.
- 8002 7512 from Luxembourg
- 0800 101 4960 from Germany
- +44 (0) 1452 555 566 from all other countries
ten minutes prior to the scheduled start of the call. Please refer to
"GAGFAH S.A. 9M 2014 Earnings Call". The conference ID will be 32877409.
A live virtual audio webcast of the conference call will be available at
www.gagfah.com. A replay will be available for twelve months following the
call. The 9M 2014 report and management presentation are available as PDF
downloads on www.gagfah.com.
Contact
GAGFAH S.A.
Investor Relations
Rene Hoffmann
2-4, rue Beck
L-1222 Luxembourg
Tel.: +352 266 366 21
rhoffmann@gagfah.com
www.gagfah.com
R.C.S. Luxembourg B 109.526
Media
Dirk T. Schmitt
+49 175 721 4836
dschmitt@gagfah.de
About GAGFAH S.A.
GAGFAH S.A. is a joint stock corporation organized under the laws of the
Grand Duchy of Luxembourg qualifying as a securitization company under the
Luxembourg Securitization Law of March 22, 2004. The core business of
GAGFAH S.A.'s operating subsidiaries is the acquisition, ownership and
management of a residential property portfolio located in Germany.
GAGFAH is a leading owner and operator of residential real estate in
Germany. Our portfolio includes more than 140,000 own residential units
that are mostly located in the large German cities and their respective
commuter belts. We believe that our size, our significant presence in the
key residential markets and our scalable operating platform make us one of
the leading providers of affordable housing for low- to medium- income
households in Germany. Our operating subsidiaries are full-scale service
providers for a broad range of property and facility management services.
Our objective is to generate shareholder value through sustainable and
growing cash flows, increasing net asset value and sustainable dividends by
efficiently managing our portfolio, carrying out value-enhancing property
investments, pursuing accretive growth opportunities, and realizing value
through selected asset sales.
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19.11.2014 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
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Language: English
Company: GAGFAH S.A.
2-4, rue Beck
1222 Luxemburg
Grand Duchy of Luxembourg
Phone: + 352 266 366 1
Fax: + 352 266 366 01
E-mail: info@gagfah.com
Internet: www.gagfah.com
ISIN: LU0269583422, LU0269583422
WKN: A0LBDT
Indices: MDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart
End of News DGAP News-Service
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297949 19.11.2014
DGAP-News: GAGFAH S.A.: Increasing Earnings Momentum Starts Meeting External Growth
| Source: EQS Group AG