AFFINE (EPA:IML) Affine - 1H13 - Fundamentals consolidated for renewed investment drive

Transparency directive : regulatory news

30/07/2013 18:00

Paris, 30 July 2013, 6:00 p.m.

                        2013 consolidated half-year results

              FUNDAMENTALS CONSOLIDATED FOR RENEWED INVESTMENT DRIVE

EPRA EARNINGS DOWN DUE TO DISPOSALS

* (-) Rental income down as a consequence of 2012 disposals
* (-) Negative global result from associates
* (+) Financing expenses down sharply (-37%)
* (+) Personnel expense down (-9%)

CONSOLIDATION OF ASSETS

* EUR4.6m improvement work
* EUR3.8m disposals
* Average lease term lengthened from 5.1 to 5.5 years
* Rents stable on a like-for-like basis
* Occupancy rate unchanged (87.7%)

LTV RATIO STABLE AT 45.7% AND FINANCING COST REDUCED TO 3.3%

EPRA NAV PER SHARE OF EUR26.4

* Fair value on a like-for-like basis down slightly (-1.8%)
* Dividend distribution in May (EUR1.2 per share, representing EUR10.8m)

The Board of Directors of Affine, meeting on 29 July 2013, approved the
condensed consolidated half-year financial statements as at 30 June 2013. The
limited audit review is currently under process.

1) EPRA EARNINGS

EPRA Earnings for the first half of 2013 was EUR7.1m versus EUR9.4m for the same
period in 2012. This change is due in first place to the impact on rents of
2012 disposals (EUR120m) and also to the decline in profits from the property
development business (EUR0.9m vs. EUR1.7m, excluding inventory impairment),
which was partially offset by a significant reduction in financing cost (3.3%
vs 3.9%). EPRA Earnings also reflects the decline in rents at Banimmo, driven
by sales and a drop in the occupancy rate, and the impact of the
deconsolidation of its stake in Montéa.

In line with the company's objectives, efforts to reduce operating costs have
continued (personnel expense went down -9%).

After taking into account a 1.8% decline in the fair value of the properties
(-EUR9.8m vs -EUR4.8m), partially offset by a positive adjustment in the value
of financial instruments (EUR3.7m vs -EUR1.3m), and income from associates
(-EUR0.1m vs EUR1.1m), net loss was EUR0.2 m (vs EUR2.4).

Funds from operations shrunk to EUR8.0m mainly due to the impact of disposals on
rental income. Impacted by a sharp increase in working capital requirements
(EUR2.2m vs -EUR8.9m), operating cash flow rose from EUR9.6m in the first half
of 2012 to EUR16.2m in 2013.

2) ACTIVITY

On a like-for-like basis, headline rents remained stable compared with 31
December 2012 (-0.1%). This was also true for the EPRA occupancy rate (87.7% vs
87.8%)

In rentals, Affine signed 15 new leases covering a total area of 7,400 sqm. In
addition, 11 tenants terminated their leases, representing a total area of
5,400 sqm. There were also 18 renegotiations.

The average term of current leases lengthened from 5.1 to 5.5 years.

During the half year, Affine continued investing to boost the quality of its
properties (EUR4.6m) and to sell mature or very small assets (5 buildings for a
total of EUR3.8m). A number of acquisition projects in Paris and major regional
metropolitan areas were investigated, but no investment opportunities were
identified that met the company's risk and profit criteria.

3) NET ASSET VALUE

At the end of June 2013, the fair value of investment properties was EUR571m
(transfer taxes included), down 1.8% on like-for-like versus 2012-end.

EPRA Net Asset Value (excluding transfer taxes), after deducting quasi-equity
(perpetual subordinated loan notes), and after restating the fair value of
derivatives and deferred taxes, was down 6.5% to EUR270.1m, mainly due to the
dividend distribution in May. NAV per share (excluding treasury shares and
dilution due to convertible bonds) slipped from EUR28.2 to EUR26.4. EPRA NAV,
including transfer taxes, totalled EUR304.7m, or EUR29.8 per share.

4) FINANCING

During the period the group set up EUR15.2m in new loans and paid off a total
of EUR25.7m.

At 30 June 2013, the group's net financial debt was EUR330m (versus EUR334m
2012-end). For its real estate activity strictly speaking, the LTV ratio (net
bank debt/market value of buildings including transfer taxes, excluding
off-plan sales, plus property inventories, plus net position of equity
associates) was 45.7% versus 45.5% at the end of 2012.

The average cost of debt for the first half of 2013 was 1.8% (3.3% cost of
hedging included). The group took advantage of particularly low rates to
optimise its debt hedging by contracting further swaps in June (EUR55m) and
caps (EUR62m) on very attractive terms. The average term of debt remained
stable at 5.7 years. There are no significant debts maturing in the next years.

5) OUTLOOK

With the caution required by still-fragile economic conditions, Affine actively
continues to seek investments aiming at a balanced development between the
Paris region and the major regional metropolitan areas. This selective
investment policy is needed to restore rental volumes following an active
period of disposals in order to lower the LTV; it is based on the ability to
get bank financings and its comfortable cash position.

6) CALENDAR

* 17 October 2013: Third quarter revenues
* February 2014: 2013 annual revenues and results
* April 2014: First-quarter revenues
* April 2014: Annual General Meeting

ABOUT AFFINE GROUP

Affine is a property company specializing in commercial property. At the end of
June 2013 Affine owned 60 buildings with a total value of EUR571m inclusive of
taxes, and a total surface area of 504,000 sqm. The company owns office
properties (60%), retail properties (14%) and warehouses and industrial
premises (26%). Its activity is distributed more or less equally between Ile-de
France and the other French regions.

Affine is also the reference shareholder of Banimmo, a Belgian property
repositioning company with activities in Belgium and France, and of which
Affine holds 49.5%. The firm owns 21 properties in office and retail properties
worth EUR396m. The two companies jointly own the Jardins des Quays in Bordeaux.
Finally, It also has a 99.9%-owned subsidiary Concerto European Developer
specializing in logistics development operations.

Total Group assets are EUR994 m.

In 2003, Affine opted for the French real estate investment trusts (SIIC)
status. The Affine share is listed on NYSE Euronext Paris (Ticker: IML
FP/BTTP.PA; ISIN code: FR0000036105) and admitted to the deferred settlement
system (long only). It is included in the CAC Mid&Small, SIIC IEIF and EPRA
indexes. Banimmo is also listed on NYSE Euronext Brussels. www.affine.fr

CONTACT
INVESTOR RELATIONS                     PRESS RELATIONS
Frank Lutz                             Watchowah - Cyril Levy-Pey
+33 (0)1 44 90 43 53 -                 +33 (0)6 08 46 41 41-
frank.lutz@affine.fr                   levy-pey@watchowah.com

CONSOLIDATED PROFIT

(EURm)(1)                                     H1 2012(2)    2012     H1 2013
Gross rental income                              23,1       46,4        19,5
Net rental income                                20,3       41,3        17,1
Other income                                      2,4        4,3         1,5
Corporate expenses                               (5,3)     (10,9)       (5,2)
Current EBITDA(3)                                17,4       34,6        13,4
Current operating profit                         17,4       34,5        13,3
Other income and expenses                        (2,2)      (1,6)       (0,9)
Net profit or loss on disposal                   (0,7)      (8,5)       (0,2)
Operating profit (before value adj.)             14,5       24,5        12,2
Net balance of value adjustments                 (4,8)      (5,2)       (9,8)
Net operating profit                              9,7       19,2         2,4
Net financial cost                               (8,9)     (16,9)       (5,6)
Fair value adjustments of hedging instr.         (1,3)      (1,5)        3,7
Taxes                                             0,2        0,1        (0,8)
Associates                                        1,1        3,4        (0,1)
Miscellaneous(4)                                  0,8        0,3         0,1
Net profit                                        1,6        4,6        (0,2)
Net profit - group share                          2,4        4,7        (0,2)

(1)Based on IFRS standards and EPRA recommendations.
(2) At the request of the Belgian Financial Markets Authority FSMA, Banimmo's
financial statements at 30 une 2012 have been restated. The line item
"Associates" increased by EUR0.7 m and EPRA earnings was down EUR0.3 m.
(3) Current EBITDA represents the current operating profit excluding current
depreciation and amortization costs. In H1 2012, FY 2012 and H1 2013, this
amount excludes the impairment of properties of the development business, which
were EUR1.9m, EUR1.4m and EUR0.5m respectively and which are recognised under
other income and expenses.
(4) Net profit from activities that have been discontinued or being sold, other
financial income and expenses.

EPRA EARNINGS (EPRA PRESENTATION - INDIRECT METHOD)

(EURm)(1)                                     H1 2012(2)    2012     H1 2013

Net profit - Group share                          2,4        4,7        (0,2)
Value adjustments for investment properties       4,8        5,2         9,8
Net profit or loss on disposal                    0,7        8,5         0,2
Goodwill adjustment                                 -          -           -
Fair value adjustments of hedging instr.          1,3        1,5        (3,7)
Associates non-cash item                          0,2       (0,9)       (0,2)
Net profit from discontinued operations             -          -           -
Non-current tax, deferred and exit tax           (0,2)      (0,2)        0,4
Other non-recurring items                         1,3        1,3         0,9
Minority interests in above items above          (1,1)      (0,2)          -
EPRA earnings(5)                                  9,4       19,9         7,1

(5) The European Public Real Estate Association (EPRA) issued Best Practices
Policy Recommendations in September 2011, which give guidelines for performance
measures. As detailed in the EPRA adjustments note, the EPRA earnings excludes
the effects of fair value changes, gains or losses on sales and other
non-recurring items.

EPRA EARNINGS (RECURRING / NON-RECURRING PRESENTATION - DIRECT METHOD)

(EUR000)                                      H1 2012(2)    2012     H1 2013

Gross rental income                            23 106     46 427      19 489
Net rental income                              20 333     41 261      17 138
Other income                                    2 361      4 294       1 466
Corporate expenses                             (5 272)   (10 937)     (5 240)
Current EBITDA(3)                              17 422     34 618      13 364
Current operating profit                       17 368     34 503      13 286
Net financial cost                             (8 923)   (16 935)     (5 616)
Taxes (current)                                   (17)       (51)       (325)
Associates (current)                            1 280      2 495       1 356
Miscellaneous (current) (4)                         0         (0)          0
Net current profit                              9 708     20 012       8 700
EPRA Earnings (Net current profit - Gs(6))      9 396     19 930       8 700

Other income and expenses                      (2 151)    (1 550)       (944)
Net profit or loss on disposal                   (682)    (8 501)       (169)
Net balance of value adjustments               (4 836)    (5 217)     (9 762)
Fair value adjustments of hedging instr.       (1 267)    (1 506)      3 698
Taxes (non-current)                               183        197        (426)
Associates (non-current)                         (173)       906      (1 425)
Miscellaneous (non-current) (4)                   838        293          81
Net non-current profit                         (8 088)   (15 380)     (8 947)
Net non-current profit- group share            (6 988)   (15 218)     (8 947)

Net profit                                      1 619      4 632        (247)
Net profit - group share                        2 408      4 712        (247)

(6) Gs standing for group share.

2013 Half-Year Results

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AFFINE (EPA:IML) Affine - 1H13 - Fundamentals consolidated for renewed investment drive

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