DIC Asset AG – Q1 results show a successful start to 2012

showimage DIC Asset AG - Q1 results show a successful start to 2012

*** Gross rental income up to EUR 31.1 million (Q1 2011: EUR 27.6 million)
*** Vacancy rate reduced to 12.3 per cent (Q1 2011: 14.3 per cent)
*** FFO increased to EUR 10.5 million (Q1 2011: EUR 10 million)
*** Forecast for 2012 FFO affirmed, at EUR 43 million to EUR 45 million

Frankfurt, 15 May 2012

Key results at a glance:

DIC Asset AG (German Securities ID 509840 / ISIN DE0005098404) today presented its interim report for the first three months of the 2012 financial year. Results were shaped by four main factors. At EUR 31.1 million, gross rental income was up strongly, by 13 per cent. Further reduction in the vacancy rate enhanced the quality of the real estate portfolio. Operating results increased by 5 per cent, to EUR 10.5 million. DIC Asset AG thus generated consolidated profit of EUR 2.5 million (Q1 2011: EUR 2.8 million)

Detailed review of results for the quarter:

In a slightly improved market environment, DIC Asset AG’s gross rental income for the first three months of 2012 amounted to EUR 31.1 million (Q1 2011: EUR 27.6 million). The 13 per cent increase was largely attributable to the larger portfolio, and the reduction in the vacancy rate. Notably, gross rental income for the first quarter of 2012 exceeded all the quarterly results in 2011. Net rental income in the first quarter amounted to EUR 28.1 million, up 11 per cent from the first quarter of 2011 (EUR 25.3 million). Fees from real estate management grew by 20 per cent, to EUR 1.2 million.

DIC Asset AG increased its total rental volume by 7 per cent in the first quarter of 2012. New rental contracts or renewals were concluded for portfolio properties with an aggregate floor space of 51,900 sqm (Q1 2011: 48,300 sqm). The bulk of this increase was attributable to new rentals: rising by 23 per cent to 29,600 sqm, these were clearly higher than in the previous year. Total new rentals were equivalent to annualised rental income of EUR 5.6 million, which was markedly higher than the previous year’s level (Q1 2011: EUR 4.4 million). Like-for-like rental income remained stable (+/- 0 per cent) compared to the previous quarter after a -0,5 per cent decline in the previous year“s first quarter. In spite of the usual rental contract expiries at the beginning of the year, DIC Asset AG succeeded in reducing the vacancy rate to 12.3 per cent (Q1 2011: 14.3 per cent / Q4 2011: 12.4 per cent).

The aggregate volume of acquisitions achieved approximately EUR 17 million year-to-date (until the end of April), reflecting the acquisition of an office building near the central railway station in Frankfurt/Main (as announced). The volume of disposals totalled EUR 9.5 million (also until the end of April), mainly resulting from the sale of three properties held in the Co-Investment segment.

The average interest rate of the financial debt stood at 4.20 per cent as at 31 March 2012 – down 15 basis points year-on-year, as well as on the previous quarter’s average (Q1 and Q4 2011: 4.35 per cent); this resulted from refunding at advantageous conditions as well as from the actual interest level. Net financing expenses increased in the first quarter of 2012, leading to a EUR 2.1 million decrease in the interest result, to EUR -14.5 million. In particular, this was due to the higher financing volumes and expenses from servicing the bond issue. Interest income rose from EUR 1.8 million to EUR 2.4 million, whilst interest expenses rose from EUR -14.2 million to EUR -16.9 million.

The average maturity of financial liabilities of EUR 1.53 billion (31 Dec 2011: EUR 1.52 billion), stood at 3.2 years at the end of the first quarter. Around 11 per cent of liabilities, equal to EUR 160 million, will require refinancing during 2012, in 2013 around 9 per cent, equalling EUR 140 million, will be due.

Personnel expenses rose to EUR 3.0 million (up EUR 0.6 million) during the first quarter, reflecting increased number of employees, and in line with the budget, whilst administrative expenses remained stable, at EUR 2.2 million.

Consolidated profit of EUR 2.5 million was slightly lower year-on-year (Q1 2011: EUR 2.8 million), as expected; the decrease was mainly attributable to depreciations according to plan, caused by the expanded real estate portfolio and to a higher net other income in Q1 2011.

At EUR 10.5 million, the FFO (funds from operations, defined as earnings before depreciation and taxes, and excluding profits from disposals and development projects) for the first quarter of 2012 was up by EUR 0.5 million year-on-year (Q1 2011: EUR 10.0 million). The increase is mainly a result of the larger portfolio, generating higher rental income and more than compensating for higher interest expenses from the corporate bond issue. The FFO per share amounted to EUR 0.23 (Q1 2011: EUR 0.25).

Cash flow from operating activities (after interest and taxes paid) of EUR 12.7 million was clearly higher than in the previous year (Q1 2011: EUR 9.4 million). Specifically, the increase reflects higher rental income on account of the larger portfolio and higher management fees generated.

Cash and cash equivalents totalled EUR 90.8 million at the end of the first quarter (31 Dec 2011: EUR 100.3 million).

Real estate assets under management were unchanged, at EUR 3.3 billion, whilst DIC Asset AG’s total assets of EUR 2.3 billion increased, compared to the previous year’s level (Q4/2011: EUR 2,2 billion. The equity ratio (as reported in the statement of financial position) stood at 27.7 per cent as at 31 March 2012 (31 Dec 2011: 27.8 per cent).

Significant progress in project developments: With a major letting contract of over 70 per cent of the „MainTor Porta“ office building, DIC has started the construction works for this MainTor-subproject. The sale of the „Opera Offices Klassik“ in Hamburg within the framework of a forward deal gave the starting signal for the construction works.

Outlook for 2012: DIC Asset AG affirms its FFO forecast for the 2012 financial year of EUR 43 million to EUR 45 million ( 2011: EUR 40.6 million), which translates into a growth rate of approximately 10 per cent. This forecast is based on the following budget figures for the 2012 financial year: Gross rental income is to reach EUR 124 million to EUR 126 million (2011: EUR 116.7 million); the vacancy rate will be reduced to around 11.5 per cent (2011: 12.4 per cent).

Ulrich Höller, Chairman of the Management Board of DIC Asset AG, commented on the results: „Our successful start in 2012 with the reduction in vacancies during the first quarter is a relevant indication of the growth potential we envisage between now and the end of the year.“

For more information on DIC Asset AG, please visit the Company’s website www.dic-asset.de, where the three-month report for 2011 is also available.

About DIC Asset AG:
Established in 2002, DIC Asset AG, with registered offices in Frankfurt/Main, is a real estate company with a dedicated investment focus on commercial real estate in Germany, pursuing a return-oriented investment policy. Real estate assets under management amount to approx. EUR 3.3 billion, comprising around 270 properties, of which EUR 2.2 billion is carried on DIC Asset AG’s statement of financial position. The Company’s investment strategy is geared to the continued development of a high-quality, highly profitable and regionally diversified portfolio. The real estate portfolio is structured in two segments: the Commercial Portfolio (EUR 1.9 billion) comprises existing properties with long-term rental contracts generating attractive rental yields. The Co-Investments segment (EUR 0.3 billion) comprises fund investments, joint-venture investments, and interests in development projects. Own real estate management teams provide a direct service to tenants through six branch offices located at the regional hubs within the portfolio. This provides an edge in terms of market presence and expertise, and builds the foundation for maintaining and increasing the value of real estate assets. DIC Asset AG has been included in the SDAX® segment of the Frankfurt Stock Exchange since June 2006. The Company’s shares are also included in the EPRA index, which tracks the performance of the most important European real estate companies.

Kontakt:
DIC Asset AG
Immo von Homeyer
Eschersheimer Landstrasse 223
60320 Frankfurt/Main
+49 69 274033-86

http://www.dic-asset.de
i.vonhomeyer@dic-asset.de

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