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PRESS RELEASE: CPI PROPERTY GROUP reports financial information for the first quarter of 2018

Dow Jones received a payment from EQS/DGAP to publish this press release.

DGAP-News: CPI PROPERTY GROUP / Key word(s): Interim Report
CPI PROPERTY GROUP reports financial information for the first quarter of

2018-05-31 / 20:48
The issuer is solely responsible for the content of this announcement.

_Press Release_

_Luxembourg, 31th May 2018_

CPI PROPERTY GROUP reports financial information for the first quarter of

CPI PROPERTY GROUP (hereinafter "*CPIPG*", the "*Company*" or together with
its subsidiaries the "*Group*") hereby publishes a financial information for
the first quarter of 2018.

"CPIPG remains focused on long-term investments in Czechia, Berlin and the
CEE region," said Martin Nemecek, CEO of CPIPG. "I am pleased to report that
our strong platforms have maintained high levels of occupancy while
increasing the level of rental income. Our stable capital structure and
active asset management approach support a positive outlook for the rest of

Key highlights for the quarter include:

- Total revenues of EUR 125 million, a 32% increase year on year. Gross
rental income increased by 34% year on year to EUR 73 million, driven by
acquisitions and like-for-like growth.

- Like-for-like growth for the total portfolio was 5.4% on an annualized
basis. In Berlin, like-for-like growth was nearly 7% while in Czechia and
the CEE region like-for-like growth ranged between 3% and 5%.

- Funds from operations (FFO) increased to EUR 46 million relative to EUR 27
million for Q1 2017, reflecting stronger business and operating performance.

- CPIPG's net interest coverage ratio (ICR) was 3.4x relative to 2.5x in Q1
2017, reflecting higher levels of income and a lower cost of debt following
CPIPG's refinancing exercises in late 2017. CPIPG continues to target an ICR
well above 3x.

- Net Loan to Value (LTV) at quarter-end was 47%, primarily due to share
repurchase activities of the company during March 2018. CPIPG is confident
to maintain a net LTV below 45% going forward.

- In March 2018, CPIPG signed a EUR 150 million 2-year revolving credit
facility, which enhanced our capital structure flexibility.

- CPIPG completed EUR 3 million of acquisitions in Q1 2018, but was more
active in disposals (EUR 19 million) as CPIPG continues to optimize the
portfolio and focus on our core markets.

Key events occurring after quarter-end include:

- In April 2018, S&P Global Ratings assigned a new "BBB" long-term rating to

- In April 2018, Moody's Investor Service changed the outlook on CPIPG's
Baa3 rating from stable to positive.

- In April 2018, the Group completed the acquisition of Futurum Shopping
Centre in Czechia and five retail parks in major cities of Poland.

- In April 2018, CPIPG's primary shareholder contributed EUR 50 million of
capital to CPIPG by subscribing to new ordinary shares.

- In May 2018, CPIPG issued EUR 550 million of undated subordinated "hybrid"
notes, which are treated as equity under IFRS and receive 50% equity credit
from Moody's and S&P. CPIPG was the first corporate issuer from the CEE
region to complete such a transaction.

- In May 2018, the Group completed the acquisition of Atrium Centrum and
Atrium Plaza office buildings in Warsaw, Poland.


*Performance* *31-Mar-18* *31-Mar-17* *Change*

Gross rental
income *EUR million* 73 54 34%
Net rental
income *EUR million* 67 54 24%
revenues *EUR million* 124 95 32%

result *EUR million* 54 46 17%
Funds from
(FFO) *EUR million* 46 27 69%

Profit before
tax *EUR million* 29 27 4%
Net interest
expense *EUR million* (19) (21) -10%
Net profit
for the
period *EUR million* 24 23 2%
Net ICR *ratio* 3.4 2.5 0.9x

*Assets* *31-Mar-18* *31-Dec-17* *Change*

Total assets *EUR million* 7,633 7,529 1%
Portfolio *EUR million* 6,736 6,722 0%
leasable area *sqm* 3,315,000 3,329,000 0%
Occupancy in
% *%* 93 93 0%

Total number
of properties
* *No.* 418 420 0%
Total number
units *No.* 12,306 12,402 -1%
Total number
of hotel beds *No.* 10,488 10,488 0%

EPRA NAV *EUR million* 3,824 3,934 -3%

* Excluding

structure* *31-Mar-18* *31-Dec-17* *Change*

Total equity *EUR million* 3,206 3,315 -3%
Equity ratio *%* 42 44 p.p.

Net debt *EUR million* 3,165 3,015 5%
Loan to value
ratio in %
(Net LTV) *%* 47.0 44.9 2.1 p.p.
Secured debt
as of total
debt *%* 58 59 -1 p.p.
assets *%* 40 43 -3 p.p.


The income statement for the 3 months period ended 31 March 2018 and 31
March 2017 is as follows:

*INCOME STATEMENT *31-Mar-18* *31-Mar-17*
(EUR million)*

Gross rental income 73 54
Net service revenue 7 6
Property operating expenses (13) (6)
*Net rental income* *67* *54*
Development sales 7 1
Cost of goods sold (7)
Development operating expenses (1) (1)
*Net development income* *(1)* **
Hotel revenue 18 16
Hotel operating expenses (15) (14)
*Net hotel income *3* *2*
Revenues from other business
Revenues from other business 19
operations 17
Cost of goods sold (1) (1)
Related operating revenues (11) (10)
*Net income from *7* *6*
other business
*Total revenues* *124* *95*
*Total direct *(48)* *(33)*
business operating
*Net business *76* *62*
Net valuation gain or loss on inv. (3)
Amortization, depreciation and
impairments (7) (11)
Other operating income 1 7
Administrative expenses (12) (10)
Other operating expenses (1) (2)
*Operating result* *54* *46*
Interest income 4 1
Interest expense (23) (22)
Other net financial result (6) 2
*Net finance costs* *(25)* *(19)*
Share of profit of
investees (net of
*Profit before *29* *27*
income tax*
Income tax expense (5) (4)
*Net profit for the *24* *23*

*Net rental income*

Net rental income increased by 24% to EUR 67 million, compared to EUR 54
million for the first three months of 2017. The increase in gross rental
income (GRI) was attributable to acquisitions (including CPIPG's
largest-ever acquisition from CBRE GI, completed at the end of March 2017)
and strong like-for-like growth in our core geographies. Higher GRI was
partially offset by increased property operating expenses as CPIPG continues
investing in our properties to improve occupancy and rents.

*Developments sales*

Development sales in 2018 and related cost of goods sold (both slightly
exceeding EUR 7 million) represent the sale of two appartments from Palais
Maeterlinck project.

*Net Hotel income*

Net Hotel income was EUR 3 million for the quarter, compared to EUR 2
million for the first three months of 2017. We continue to see positive
trends in our congress hotels, resorts, and city hotels.

*Net income from other business operations *

Net income from other business operations in both 2018 and 2017 relates to
agriculture (EUR 0.4 million in 2018) and mountain resorts (EUR 7.4 million
in 2018).

*Administrative expenses*

Administrative expenses increased by EUR 1.9 million primarily due to
one-off costs.

*Other net financial result*

Due to the ongoing CZK appreciation against EUR, the Group has incurred in
2018 a non-cash FX loss of EUR 9 million predominantly related to EUR
denominated assets in the Czech Republic. Unrealized FX losses are a
non-cash item in our income statement and are offset by an increase in our
translation reserve with positive impact on our equity.

*Interest expense and interest income*

Interest expense was roughly unchanged (EUR 1 million higher) relative to 1Q
2017, however the total balance of debt as of 1Q 2017 was only EUR 3.3

(MORE TO FOLLOW) Dow Jones Newswires

May 31, 2018 14:47 ET ( 18:47 GMT)


billion relative to EUR 3.5 billion at 1Q 2018. Interest income increased by
EUR 2.5 million primarily as a result of new loans provided by the Group
(mainly at the end of 2017) to a related party.


*BALANCE SHEET (EUR million)* *31-Mar-18* *31-Dec-17*

Intangible assets and goodwill 120 120
Investment property 5,836 5,808
Property, plant and equipment 725 724
Deferred tax assets 142 142
Other non-current assets 103 89
*Total non-current assets* *6,926* *6,883*
Inventories 76 82
Trade receivables 82 77
Cash and cash equivalents 304 239
Asset held for sale 102 113
Other current assets 143 135
*Total current assets* *707* *646*
*TOTAL ASSETS* *7,633* *7,529*
Equity attributable to owners of the 3,167 3,277
Non-controlling interests 39 38
*Total equity* *3,206* *3,315*
Bonds issued 1,449 1,332
Financial debts 1,690 1,593
Deferred tax liabilities 715 710
Other non-current liabilities 49 50
*Total non-current liabilities* *3,903* *3,685*
Bonds issued 46 158
Financial debts 276 165
Trade payables 69 75
Liabilities linked to assets held for 15 16
Other current liabilities 118 115
*Total current liabilities* *524* *529*

*Total assets and total liabilities*

Total assets increased by EUR 104 million (1.4%) to EUR 7,633 million as at
31 March 2018. The predominant driver of this growth was the increase of
cash and cash equivalents which grew by EUR 65 million (27%) to EUR 304
million as at 31 March 2018 and the increase of investment property by EUR
28 million (0.5%) to EUR 5,836 million primarily due to the ongoing
investments in our properties to improve their performance.

Total liabilities were EUR 4,426 million as at 31 March 2018 which
represents an increase of EUR 212 million (5%) compared to 31 December 2017.
Drawings under CPIPGs revolving credit facility and the refinancing of
Quadrio in Prague were key contributors. Because of the Quadrio refinancing,
CPIPG's ratio of unencumbered assets to total assets declined to 40% from
43% at year-end-2017. However, CPIPG continues to prioritize unsecured
financing and refinancing and intends to further increase the level of
unencumbered assets over time.

*Bonds issued and financial debts*

An increase in non-current Bonds issued by EUR 116 million relates to the
adjustment of the covenants in our CPI BYTY bonds programme. This was offset
by a decrease in the current part of Bonds issued.

Total equity decreased by 3.3%, from EUR 3,315 million as at 31 December
2017 to EUR 3,206 million as at 31 March 2018. The main elements impacting
equity were:

- a decrease in equity due to share buy-back programme (EUR 145 million);

- an increase by EUR 24 million (profit for three months of 2018);

- an increase by EUR 9 million in translation reserve, reflecting CZK
appreciation towards EUR.

EPRA NAV was EUR 3,824 million as at 31 March 2018, a decrease of 2.8%
relative to December 2017.

For further information please contact:

David Greenbaum Kirchhoff Consult AG
Chief Financial Officer Andreas Friedemann
CPI Property Group Herrengraben 1
d.greenbaum@cpipg.com 20459 Hamburg
T +49 40 60 91 86 50
F +49 40 60 91 86 60
E andreas.friedemann@kirchhoff.de


*Alternative *Definition* *Rationale*
Performance Measures
EPRA NAV Net Asset Value Makes adjustments to
adjusted to include IFRS NAV to provide
properties and other stakeholders with the
investment interests most relevant
at fair value and to information on the
exclude certain fair value of the
items not expected assets and
to crystallise in a liabilities within a
long-term investment true real estate
property business investment company
model. with a long-term
investment strategy.
Funds from operations It assumes net Funds from operations
or FFO income (computed in provide an indication
accordance with of core recurring
IFRS), excludes earnings.
(non-cash) items
like gains
(or losses) from
sales of property
and inventory,
of derivatives
revaluation and
Calculation excludes
adjustments for
partnerships and
joint ventures.
Loan-to-Value or Net It is calculated as Loan-to-Value
LTV Net Debt divided by provides a general
fair value of assessment of
Property Portfolio. financing risk
Net Debt is undertaken.
borrowings plus bank
overdraft less cash
and cash
Property Portfolio
covers all
properties held by
the Group,
independent of the
balance sheet
classification, from
which the Group
incurs rental or
other operating
Net ICR It is calculated as This measure is an
Consolidated important indicator
adjusted EBITDA of a firm's ability
divided by a sum of to pay interest and
Interest income as other fixed charges
reported and from its operating
Interest expense as performance, measured
reported. by EBITDA.
adjusted EBITDA is
Net business income
as reported deducted
by Administrative
expenses as
Secured debt as of It is calculated as This measure is an
total debt a sum of secured important indicator
bonds and secured of a firm's financial
financial debts as flexibility and
reported divided by liquidity. Lower
a sum of Bonds levels of secured
issued and Financial debt typically also
Debts as reported. means lower levels of
mortgage debt
properties that are
free and clear of
mortgages are sources
of alternative
liquidity via the
issuance of property
specific mortgage
debt, or even sales.
Unencumbered assets It is calculated as This measure is an
a sum of bond important indicator
collateral and bank of a commercial real
loan collateral estate firm's
divided by Total liquidity and
Assets as reported. flexibility.
Properties that are
free and clear of
mortgages are sources
of alternative
liquidity via the
issuance of
mortgage debt, or
even sales. The
larger the ratio of
unencumbered assets
to total assets, the
more flexibility a
company generally has
in repaying its
unsecured debt at

(MORE TO FOLLOW) Dow Jones Newswires

May 31, 2018 14:47 ET ( 18:47 GMT)

maturity, and the
more likely that a
higher recovery can
be realized in the
event of default.


*EPRA NAV reconciliation (EUR million)* *31-Mar-18* *31-Dec-17*
*Equity per the financial statements
(NAV)* *3,167* *3,277*
Effect of exercise of options,
convertibles and other equity interests
*Diluted NAV, after the exercise of
options, convertibles and other equity
interests* *3,167* *3,277*
Revaluation of trading property and PPE 3 3
Fair value of financial instruments 2
Deferred tax on revaluation 697 697
Goodwill as a result of deferred tax (43) (43)
*EPRA NAV* *3,824* *3,934*

*Net LTV reconciliation (EUR million)* *31-Mar-18* *31-Dec-17*
Financial debts 1,966 1,758
Bonds issued 1,495 1,489
Net debt linked to AHFS 8 7
Cash and cash equivalents (304) (239)
*Net debt* *3,165* *3,015*
*Total property portfolio* *6,736* *6,722*
*Net LTV* *47.0%* *44.9%*
*Secured debt as of Total debt
reconciliation (EUR million)* *31-Mar-18* *31-Dec-17*
Secured bonds 166 163
Secured financial debts 1,846 1,700
Total debts 3,467 3,247
*Secured debt as of Total debt* *58%* *57%*
*Unencumbered assets reconciliation (EUR
million)* *31-Mar-18* *31-Dec-17*
Bonds collateral 485 483
Bank loans collateral 4,072 3,846
Total assets 7,633 7,529
*Unencumbered assets ratio* *40%* *43%*
*Net Interest coverage ratio
reconciliation (EUR million)* *31-Mar-18* *31-Mar-17*
Interest income 4 1
Interest expense (23) (22)
Net Business Income 76 62
Administrative expenses (12) (10)
*Net interest coverage ratio* *3.4x* *2.5x*
*Funds from operations reconciliation
(EUR million)* *31-Mar-18* *31-Mar-17*
Net profit for the period 23 23
Deferred income tax 3 2
Net valuation gain or loss on investment
property 3 0
Net valuation gain or loss on
revaluation of derivatives 1 (2)
Net gain or loss on disposal of assets 1 1
Amortization, depreciation and
impairments 7 10
Other non-recurring / non-cash items 8 (7)
*Funds from operations* *46* *27*

2018-05-31 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de
Language: English
40, rue de la Vallée
L-2661 Luxembourg
Phone: +352 264 767 1
Fax: +352 264 767 67
E-mail: contact@cpipg.com
Internet: www.cpipg.com
ISIN: LU0251710041
Listed: Regulated Market in Frankfurt (General Standard); Regulated
Unofficial Market in Dusseldorf, Stuttgart

End of News DGAP News Service

691467 2018-05-31

(END) Dow Jones Newswires

May 31, 2018 14:47 ET ( 18:47 GMT)


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