PRESS RELEASE: CPI PROPERTY GROUP reports financial information for the first quarter of 2018
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.
_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*
income *EUR million* 73 54 34%
income *EUR million* 67 54 24%
revenues *EUR million* 124 95 32%
result *EUR million* 54 46 17%
(FFO) *EUR million* 46 27 69%
tax *EUR million* 29 27 4%
expense *EUR million* (19) (21) -10%
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%
% *%* 93 93 0%
* *No.* 418 420 0%
units *No.* 12,306 12,402 -1%
of hotel beds *No.* 10,488 10,488 0%
EPRA NAV *EUR million* 3,824 3,934 -3%
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.
as of total
debt *%* 58 59 -1 p.p.
assets *%* 40 43 -3 p.p.
*STATEMENT OF COMPREHENSIVE INCOME*
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*
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
Cost of goods sold (1) (1)
Related operating revenues (11) (10)
*Net income from *7* *6*
*Total revenues* *124* *95*
*Total direct *(48)* *(33)*
*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 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.
Development sales in 2018 and related cost of goods sold (both slightly
exceeding EUR 7 million) represent the sale of two appartments from Palais
*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
Administrative expenses increased by EUR 1.9 million primarily due to
*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
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May 31, 2018 14:47 ET ( 18:47 GMT)
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