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Cegereal, the French Core Office REIT - First-half 2015: EPRA NAV UP +8.5%

20:00 EDT 23 Jul 2015 | Globe Newswire

PARIS, July 24, 2015 (GLOBE NEWSWIRE) -- "We are at the beginning of a very promising cycle for creating value for our shareholders. Our NAV is growing steadily, lifted by the trend toward investment in the office property market and our recent realizations on assets. We anticipate an increase in market rents over the coming year and, in the meantime, a further compression in cap rates." said Raphaël Tréguier, Cegereal Chief Executive Officer.

  • Vibrant rental activity: 10,000 sq.m. leased

While the rental market for large properties was sluggish in the first six months of 2015, Cegereal made the most of its ability to provide flexible solutions for tenants and continued to turn in a strong letting performance for the Arcs de Seine and Europlaza buildings. In all, seven new leases were signed for a total of 10,000 sq.m. These new leases brought the occupancy rate for the Company's assets to 92%.

Work was completed on the lobby, landscaping and services at the Garden Tower in the spring of 2015. Renovation of Europlaza's new "garden floors" is under way, in preparation for marketing starting in September.

  • Operating income tripled

IFRS revenue stood at €30.1 million, declining by 5.3% from the prior-year period, due primarily to Cap Gemini's departure from 7,300 sq.m. at the Europlaza site in October 2014.

IFRS operating income tripled to €40.4 million versus €13.8 million as of June 30, 2014, thanks in particular to an increase in the value of the real estate portfolio, which rose to €902 million excluding transfer costs as of end-June 2015 (€961 million including transfer costs) from €844 million a year earlier (excluding transfer costs), and €871 million excluding transfer costs as of December 31, 2014.

The three properties' appraisal values June 30, 2015, excluding transfer costs, are as follows:

  • Europlaza:             €354 million
  • Arcs de Seine:       €353 million
  • Rives de Bercy:     €195 million

Cegereal has a healthy balance sheet, with a stable loan-to-value (LTV) ratio of 44.9%.

EPRA NNNAV excluding transfer costs stood at €35.8 per share, compared with €34.8 per share as of December 31, 2014. The increase over the period reflected dividend distributions (negative impact of €1.65 per share), consolidated earnings growth (positive impact of €0.1 per share), rent-free periods granted to new tenants (positive impact of €0.1 per share), changes in the properties' appraisal values (positive impact of €2.3 per share) and changes in the fair value of bank debt (positive impact of €0.1 per share).

In millions of euros First-half 2015 First-half 2014
(pro forma IFRIC 21)
Change
IFRS revenue 30.1 31.7 -5.3%
IFRS rental income

Portfolio occupancy rate: 91.7%
21.9 22.6 -3.1%
IFRS operating income 40.4 13.8 +293.6%
IFRS net income 32.1 6.6 +387.6%
EPRA earnings 8.4 12.5 -32.7%
EPRA NNNAV per share excluding transfer costs (in €) 35.8 33.0 +8.5%

       
In accordance with IFRIC 21 "Levies", an interpretation providing guidance on IAS 37, rental expenses incurred by the lessor on behalf of lessees and expenses chargeable to the lessees under the terms of the lease (including property tax and tax on office premises) are recorded in the statement of comprehensive income under "Building-related costs". These expenses are recognized at January 1 and not spread over the fiscal year. The impact is reflected in the financial statements for 2015, including the interim financial statements. The pro forma accounts for the six months ended June 30, 2014 have been restated to reflect the impact of IFRIC 21 "Levies" had it been applied at that date. 

Investor Calendar

  • October 7 & 8, 2015            Large and Midcap Event (Paris)
  • October 22, 2015                Third-quarter 2015 financial information

For more information, please contact:

Investor Relations Media relations
Raphaël Tréguier  / +33 (0)1 42 25 76 36 / Aliénor Miens / +33 (0)1 53 32 84 77 /
raphael.treguier@cegereal.com alienor.miens@citigate.fr

About Cegereal

Created in 2006, Cegereal is a commercial property company that invests in prime office properties in Greater Paris. The portfolio's appraisal value is estimated by independent valuers DTZ Eurexi at €961 million as of June 30, 2015 (replacement value).
To date, Cegereal is the first French property company with a fully certified portfolio from an environmental point of view (HQE and BREEAM "Very Good") and benefits from the Green Star rating in the international benchmark GRESB.
Cegereal is a REIT listed on Euronext Paris since 2006, in compartment B (ISIN: FR0010309096). The Company had a market capitalization of €385 million on July 21, 2015.
www.cegereal.com.

Interim Financial Statements

(IFRS)

Six-month period ended June 30, 2015

Excerpts from the interim financial report

approved by the Board of Directors on July 23, 2015

The Statutory Auditors have performed a limited review

of the interim financial statements

Consolidated Statement of Comprehensive Income (IFRS) for the six months ended    June 30, 2015

in thousands of euros, except per share data        
  June 30, 2015 Dec. 31, 2014 June 30, 2014 June 30, 2014
        Pro forma (1)
  6 months 12 months 6 months 6 months
         
Rental income 21,926  44,746  22,624  22,624 
Income from other services 8,169  13,173  6,558  9,141 
Building-related costs (11,427)  (16,341)  (7,927)  (10,330) 
Net rental income 18,668  41,579  21,255  21,435 
         
Sale of building        
Administrative costs (2,038)  (3,057)  (1,592)  (1,592) 
Other operating expenses (0) 
Other operating income    
         
Increase in fair value of investment property 23,736  42,637  10,172  10,172 
Decrease in fair value of investment property   (23,933)  (16,085)  (16,085) 
Total change in fair value of investment property 23,736  18,704  (5,913)  (5,913) 
         
Net operating income 40,366 57,226 13,750 13,930
         
Financial income   17  11  11 
Financial expenses (7,555)  (14,533)  (7,329)  (7,329) 
Net financial expense (7,555)  (14,515)  (7,318)  (7,318) 
         
Corporate income tax (662)  (312)  (19)  (19) 
         
CONSOLIDATED NET INCOME 32,149 42,398 6,413 6,594
of which attributable to owners of the Company   42,398  6,413  6,594 
of which attributable to non-controlling interests  
         
Other comprehensive income    
         
TOTAL COMPREHENSIVE INCOME 32,149 42,398 6,413 6,594
of which attributable to owners of the Company 32,149   42,398  6,413  6,594
of which attributable to non-controlling interests 0 0 0 0
         
Basic and diluted earnings per share (in euros) 2.41 3.18 0.48 0.49

(1): Pro forma figures at June 30, 2014 have been restated to reflect the retrospective application of IFRIC 21 "Levies"

Consolidated Balance Sheet (IFRS) at June 30, 2015

in thousands of euros        
  June 30, 2015 Dec. 31, 2014 June 30, 2014 June 30, 2014
        Pro forma(1)
         
Non-current assets        
         
Property, plant and equipment 61       
Investment property 902,000  871,000  844,000  844,000 
Non-current loans and receivables 30,346  30,941  33,391  33,391 
Total non-current assets 932,407  901,941  877,391  877,391 
         
Current assets        
         
Trade accounts receivable 12,945  6,469  8,354  10,139 
Other operating receivables 5,562  6,276  2,329  2,329 
Prepaid expenses 200  107  1,182  287 
Total receivables 18,706  12,852  11,865  12,755 
         
Cash and cash equivalents 24,072  23,499  26,983  26,983 
Total cash and cash equivalents 24,072  23,499  26,983  26,983 
         
Total current assets 42,778  36,351  38,848  39,738 
  TOTAL ASSETS   975,185    938,292    916,238    917,129 
         
Shareholders' equity        
         
Share capital 160,470  160,470  160,470  160,470 
Legal reserve and additional paid-in capital 16,047  16,047  16,047  16,047 
Consolidated reserves and retained earnings 5,389  5,389  5,389  5,389 
Retained earnings 305,202  284,831  294,808  294,808 
Net attributable income 32,149  42,398  6,413  6,594 
Total shareholders' equity 519,257  509,135  483,128  483,308 
         
Non-current liabilities        
         
Non-current borrowings 402,442  401,889  396,369  396,369 
Other non-current borrowings and debt 4,061  4,166  4,161  4,161 
Non-current corporate income tax liability
Total non-current liabilities 406,503  406,055  400,531  400,531 
         
Current liabilities        
         
Current borrowings   1,794    1,716  1,645  1,645 
Trade accounts payable   3,106    2,148  1,728  1,728 
Corporate income tax liability   660  295 
Other operating liabilities   30,722    5,045  14,330  16,131 
Prepaid revenue   13,143    13,898  14,871  13,781 
Total current liabilities 49,424    23,102  32,579  33,290 
         
Total liabilities 455,927    429,157  433,110  433,821 
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES   975,185    938,292    916,238    917,129 

 (1): Pro forma figures at June 30, 2014 have been restated to reflect the retrospective application of IFRIC 21 "Levies"

Consolidated Statement of Cash Flows for the six months ended June 30, 2015

in thousands of euros      
  June 30, 2015 Dec. 31, 2014 June 30, 2014
       
OPERATING ACTIVITIES      
Consolidated net income 32,149  42,398  6,413 
       
Elimination of items related to the valuation of buildings:      
Fair value adjustments to investment property (23,736)  (18,704)  5,913 
Indemnity received from lessees for the replacement of components    
       
Elimination of other income/expense items with no cash impact:      
Adjustments for loans at amortized cost 554  1,091  572 
       
  Cash flows from operations before tax and changes in working capital requirements  8,967 24,785 12,898
       
Change in amounts due to owners 22,065  10,029 
Other changes in working capital requirements (1,916)  (629)  (1,704) 
       
  Change in working capital requirements  20,149 (629) 8,325
       
  Net cash flows from operating activities  29,116 24,156 21,223
       
INVESTING ACTIVITIES      
Acquisition of fixed assets (7,325)  (3,296)  (913) 
Disposal of fixed assets    
Net decrease in amounts due to fixed asset suppliers 837  874 
       
  Net cash flows used in investing activities  (6,488) (2,422) (906)
       
FINANCING ACTIVITIES      
Increase in share capital  
Change in bank debt   5,000 
Refinancing transaction costs  
Net increase in current borrowings 78  (60)  (131) 
Net increase in other non-current borrowings and debt (105)  697  693 
Net decrease in other non-current borrowings and debt  
Purchases and sales of treasury shares 38  134  116 
Dividends paid (22,065)  (20,025)  (10,029) 
       
       
  Net cash flows used in financing activities  (22,054) (14,254) (9,352)
       
  Change in cash and cash equivalents  573 7,480 10,965
       
  Cash and cash equivalents at beginning of the period* 23,499  16,018  16,018 
       
  CASH AND CASH EQUIVALENTS AT END OF THE PERIOD  24,072 23,499 26,983

* There were no cash liabilities for any of the periods presented above.


pdf Press Release: http://hugin.info/155833/R/1940961/701213.pdf

HUG#1940961

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