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

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) 0 0 0
Other operating income 0 0
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 0 0 0
Other comprehensive income 0 0
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 0 0 0 0
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 6 6
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 0
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 0 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 0
Net decrease in amounts due to fixed asset suppliers 837 874 6
Net cash flows used in investing activities (6,488) (2,422) (906)
FINANCING ACTIVITIES
Increase in share capital 0 0
Change in bank debt 5,000 0
Refinancing transaction costs 0 0
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 0 0
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

Source:Cegereal