DGAP-News: CPI Property Group - Financial Results for the Third Quarter of 2020
CPI PROPERTY GROUP ("CPIPG" or the "Group"), the leading owner of income-generating real estate in Berlin, Prague, Warsaw and the CEE region, is pleased to publish unaudited financial results for the third quarter of 2020.
DGAP-News: CPI PROPERTY GROUP / Key word(s): Quarter Results CPI Property Group - Financial Results for the Third Quarter of 2020 01.12.2020 / 08:34 The issuer is solely responsible for the content of this announcement. CPI PROPERTY GROUP CPI Property Group - Financial Results for the Third Quarter of 2020 CPI PROPERTY GROUP ("CPIPG" or the "Group"), the leading owner of income-generating real estate in Berlin, Prague, Warsaw and the CEE region, is pleased to publish unaudited financial results for the third quarter of 2020. "CPIPG's excellent performance continues despite uncertainty and new challenges, thanks to the quality of our assets and the expertise of our local teams," said Martin Nemecek, CEO. "CPIPG's Q3 results demonstrate that COVID-19 had a mild impact on CPIPG's business and that our markets are fundamentally sound." Key highlights for the third quarter of 2020 include: - CPIPG's property portfolio increased by 8% to €9.9 billion compared to the end of 2019, primarily due to the acquisition of six office properties in Warsaw, Poland and a 29.4% stake in Globalworth Real Estate Investments Limited. Portfolio growth was partly offset by €293 million of revaluation effects since the end of 2019, of which only €41 million was recognised in the third quarter; - Total assets increased by 6% to €11.3 billion compared to the end of 2019 due to the increase in the property portfolio, partly offset by a reduction in cash and equivalents; - Net rental income increased by 15% to €251 million compared to the first nine months of 2019, reflecting the effect of acquisitions, resilient occupancy at 94% and 1.9% like-for-like growth in gross rental income; - Consolidated adjusted EBITDA increased by 15% to €257 million compared to the first nine months of 2019 due to the increase in net rental income, the contribution from acquisitions and the impact of cost reduction measures. This performance is particularly remarkable considering the backdrop for hotels; - Net business income and funds from operations (FFO) were stable compared to the first nine months of 2019 at €260 million and €173 million, respectively; - Net Interest Coverage Ratio (Net ICR) at 5.6x and Net Loan to Value (Net LTV) at 41.0% reflect an increase in net debt related to acquistions, but are comfortably within the Group's financial policy. Notably, actions taken by the Group have reduced Net LTV by 1.5 p.p. versus 30 June 2020; - During the third quarter of 2020, the Group issued HUF 30 billion (€86 million-equivalent) of 10-year green bonds and €525 million of perpetual hybrid bonds callable in 2026. Proceeds were partially used to refinance €328 million of 2023 hybrid notes and €12 million of the 2022 unsecured notes; - In July 2020, the Group increased its Berlin loans by €259 million to a total of €750 million. The first additional tranche of €138 million was drawn during the third quarter and the second tranche of €121 million was drawn in October 2020, after the end of the period; - In addition to the refinancing of a portion of the 2023 hybrid and 2022 unsecured notes, the Group also repaid €39.5 million of Schuldschein loans maturing in 2023; - Total available liquidity at the end of Q3 was more than €1.1 billion. In November, the Group further strengthened our liquidity position by signing a new €700 million revolving credit facility which expires in 2026, with 10 international banks as lenders, replacing the €510m facility expiring in 2022. The Group's current liquidity position exceeds €1.3 billion. Recent COVID-19 Developments - On 26 October 2020, the Group provided an update to our stakeholders on the impact of COVID-19, following the second wave in the Czech Republic and introduction of a national lockdown on 22 October; - Following significant declines in new cases and deaths in recent weeks, on 29 November the Czech government provisionally permitted all retail including shopping centres to reopen from Thursday 3 December - at which point nearly all of the Group's portfolio will be open; - Some restrictions remain in force in other countries; for example, all non-essential retail closed in Poland on 6 November, though this only accounts for less than 2% of the Group's portfolio. Hotels still remain largely closed and will be reopened gradually in line with demand;
- Collection rates have remained consistently strong throughout the year. In the first 9 months of 2020, the Group collected 95% of rent before the impact of one-time COVID-19 discounts and 99% after discounts; - On 26 October, the Group reported that it had collected 95% of third quarter rents before the impact of one-time COVID-19 discounts and 97% after discounts. As the group has continued to invoice and collect rents after the period, third quarter collections have improved to 96% and 98% respectively; - 94% of rent before discounts was collected in October. This is expected to increase as invoicing and collections continue beyond the end of the period.
Notable events occurring after the end of Q3 2020 - On 15 October 2020, the Group drew the second additional tranche of loans in Berlin for €121 million; - On 2 November 2020, CPIPG subscribed for 11,012,555 of newly issued ordinary shares of Nova RE for a total consideration of €25,989,630 (€2.36 per share). Nova RE owns income-generating properties primarily in Rome, Milan and Bari valued at €123.3 million as of 30 June 2020. Nova RE is one of only five Italian companies to obtain SIIQ (Società di Investimento Immobiliare Quotata) status, which is similar to a REIT regime and offers tax benefits for investors. CPIPG expects that Nova RE will be a platform for the Group's current and future investments in Italy. Following the capital increase, CPIPG owns more than 50% of Nova RE and subject to regulatory approvals, will launch a mandatory takeover offer for the remaining shares in Nova RE at €2.36 per share; - On 25 November 2020, the Group signed a new €700 million revolving credit facility maturing in 2026 with ten international banks. The facility replaces the existing €510 million revolving credit facility which matures in 2022.
FINANCIAL HIGHLIGHTS
STATEMENT OF COMPREHENSIVE INCOME* The income statement for the nine-month period ended 30 September 2020 and 2019 was as follows:
* The presented financial statements do not represent a full set of interim financial statements as if prepared in accordance with IAS 34. ** Including net foreign exchange gains and losses (including valuation gains classified within valuation gain under IFRS), share of profit of equity accounted investees and other financial gains and losses.
Gross rental income Gross rental income increased by €30 million (13%) to €264 million in the nine-month period ended Net hotel income Because of lockdowns and travel restrictions related to the COVID-19 outbreak, hotel revenue decreased by €66 million (64%) to €37 million in the nine-month period ended 30 September 2020. However, given the Group operates our own hotels, we were able to sharply reduce hotel operating expenses by €31 million (46%) to €37 million. Net valuation loss The valuation loss of €11 million in the nine-month period ended 30 June 2020 primarily reflects decreased fair value of two retail properties in Budapest, Hungary. Amortization, depreciation and impairment Amortization, depreciation and impairment increased by €38 million to €63 million in the period due to the negative revaluation of hotels (€34.4 million). Interest expense Interest expense increased by €21 million to €58 million in the period as the Group increased gross debt to fund acquisitions.
* The presented financial statements do not represent a full set of interim financial statements as if prepared in accordance with IAS 34 Total assets Total assets increased by €594.5 million (6%) to €11,267.3 million at 30 September 2020 compared Total liabilities Total liabilities increased by €508.8 million (10%) to €5,712.1 million at 30 September 2020 compared to 31 December 2019. The Group issued senior unsecured bonds of €1.23 billion and completed new loans and leases for €245 million while repaying and decreasing loans and bonds of €916 million. EQUITY AND EPRA NRV Total equity increased by €85.7 million from €5,469.5 million as at 31 December 2019 - Increase of retained earnings due to the profit for the period of €17.4 million; - Increase of perpetual bonds by €304.7 million; - Decrease in revaluation and hedging reserve of €33.9 million; - Decrease in translation reserve of €200.9 million; - Decrease in non-controlling interest of €1.6 million. EPRA NRV was €4,844 million as at 30 September 2020, representing a decrease of 5% compared to 31 December 2019. The decrease of EPRA NRV was driven by the above changes in the Group's equity attributable to the owners (the increase of retained earnings, perpetual bonds and hedging reserve).
GLOSSARY
APM RECONCILIATION
* Includes pro-rata EBITDA / FFO for Q3 2020 of Equity accounted investees
For further information please contact: INVESTORS CPI PROPERTY GROUP CPI PROPERTY GROUP MEDIA/ PR Kirchhoff Consult AG
01.12.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. |
Language: | English |
Company: | CPI PROPERTY GROUP |
40, rue de la Vallée | |
L-2661 Luxembourg | |
Luxemburg | |
Phone: | +352 264 767 1 |
Fax: | +352 264 767 67 |
E-mail: | [email protected] |
Internet: | www.cpipg.com |
ISIN: | LU0251710041 |
WKN: | A0JL4D |
Listed: | Regulated Market in Frankfurt (General Standard); Regulated Unofficial Market in Dusseldorf, Stuttgart |
EQS News ID: | 1151741 |
End of News | DGAP News Service |
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1151741 01.12.2020