AFFINE (EPA:IML) FY13 - Increase in occupancy rate and rents

Transparency directive : regulatory news

18/02/2014 18:00

Paris, 18 February 2014, 6:00 pm

                   2013 annual consolidated financial statements

    INCREASE IN OCCUPANCY RATE AND RENTS SOLID FUNDAMENTALS FOR CONTINUED
                                 INVESTMENT

CHANGE IN PORTFOLIO

* Rents up 0.9% on a like-for-like basis
* Significant hike in occupancy rate (90.9%)
* EUR25.5m in acquisitions and EUR7.8m in disposals
* EUR19.9m in improvements and developments

CONTROLLED LTV OF 46.8%
AND COST OF DEBT DOWN TO 3.4%

DECLINE IN EPRA EARNINGS

* (-) Rental income down due to disposals in 2012
* (-) End of residential development projects
* (+) Sharp drop in financial costs
* (+) Decrease in corporate expenses

EPRA NAV PER SHARE OF EUR25.0

* (-) 3.8% reduction in fair value of buildings
* (-)  Net earnings of -EUR8.8m due to fair value adjustments, particularly for
Banimmo

DIVIDEND OF EUR0.9 PER SHARE

The Board of Directors of Affine, meeting on 17 February 2014, approved the
individual and consolidated financial statements for the period ending
31 December 2013. The audit procedures are in the process of finalisation.

1) EARNINGS

EPRA earnings, a measurement of the company's consolidated recurring earnings,
were EUR17.0m compared to EUR20.1m in 2012.

This change is due to:

* the decrease in net rents (-EUR6.4m or 15.6%) resulting from the major
  programme of disposals (EUR120m) conducted in 2012,

* the decline in income posted by the property development business (EUR0.9m vs
  EUR3.2m) caused mainly by the end of the residential development programmes
(EUR0.3m vs EUR1.7m),

* a marked reduction in financial costs (-EUR5.5m or 32.3%) resulting from
  deleveraging related to the disposals, and strengthened by further
  improvement in the cost of financing,

* the continued reduction in corporate expenses (-8.6%),

* a decline in the contribution from associates (including Banimmo) from
  EUR2.5m to EUR1.9m.

There were also a number of value adjustments in the Group:

* firstly, Affine posted a EUR18.3m decline in fair value of buildings (as
  opposed to -EUR5.2m in 2012) and a EUR4.0m increase in fair value of
  financial instruments (versus -EUR1.5m in 2012) ;

* secondly, Banimmo made a significant provision for a building under
  redevelopment and for its equity interest in City Mall, thus contributing
  EUR7.2m to the loss in value shown in Affine's consolidated income statement.

As a result net consolidated earnings came to a loss of EUR8.8m versus a profit
of EUR4.7m in 2012.

Funds from operation were stable at EUR17.9m, the decline in rental income from
disposals being offset in particular by reduced finance costs. As a result of
the markedly positive change in WCR (EUR1.3m vs -EUR16.4m), operating cash-flow
went from EUR16.8m in 2012 to EUR31.1m in 2013.

The Board of Directors decided to recommend that the Annual General Meeting fix
the amount of the dividend per share payable for the financial year at EUR0.9,
to take account of the one-time drop in the company's earnings, while
maintaining the share yield comparable to that of the sector.

2) ACTIVITY

On a like-for-like basis, annualised headline gross rental income at the end of
2013 was up 0.9% over end of 2012, thus reflecting the efforts made in rental
management. The same was true of the EPRA occupancy rate, which increased
significantly from 87.8% to 90.9%, giving a gross yield on headline rents of
7.3%.

In terms of rentals, Affine signed 35 new leases covering a total surface area
of 23,900 sqm and total annual rent of EUR1.3m. In addition, 19 tenants
cancelled their leases, representing a total surface area of 10,600 sqm and
annual rent of EUR1.6m. Lastly, 35 tenants renegotiated their rents for an
amount of EUR3.9m.

At the end of 2013, Affine became sole owner of the retail and office
properties at Les Jardins des Quais in Bordeaux by purchasing Banimmo's 50%
stake for EUR25.5m. During the year, Affine also continued investing to improve
the quality of its buildings (EUR9.5m) and to sell mature or small assets
(7 buildings for a total of EUR7.8m).

3) NET ASSET VALUE

At the end of December 2013, the fair value of investment properties was
EUR594m (excluding transfer taxes), down 3.8% on a like-for-like basis versus
the end of 2012.

EPRA Net Asset Value (excluding transfer taxes), after deducting quasi-equity
(PSL: perpetual subordinated loan notes) and after adjustments to the fair
value of derivatives and deferred taxes, was down 11.3% to EUR256.0m due to the
negative earnings for the year and  the  2012  related  distribution
(dividends and payment of the BRS [bonds redeemable in shares] and PSL). NAV
per share (excluding treasury shares and after dilution due to bonds redeemable
in shares) declined from EUR28.2 to EUR25.0.

Finally, EPRA triple net NAV (excluding transfer taxes), including the fair
value of hedging instruments, deferred tax and the difference between the
accounting value and discounted value of the debt, amounted to EUR28.2 per
share.

4) FINANCING

EUR47.6m in new loans were set up during the period and paid off a total of
EUR41.9m.

At 31 December 2013, the net financial debt was EUR347m (versus EUR334m at
year-end 2012). For its specific property business, the LTV ratio (net bank
debt/market value of buildings including transfer taxes, excluding those in
anticipation of completion, plus property inventories, plus net position of
associates) was 46.8% versus 45.5% at the end of 2012.

The average cost of debt for 2013 was 1.9% (or 3.4% including hedging costs,
versus 3.8% in 2012). The company took advantage of the particularly low rates
to optimise hedging on its debt by entering into new swaps in June (EUR55m) and
caps (EUR62m) on very attractive terms. The average term of debt was 5.7 years.
There are no significant debts maturing in the next few years.

5) OUTLOOK

The strategy for improving the portfolio will be continued in 2014 and its
structural effects should start to be felt, in particular regarding value
adjustments. After the acquisition of all of Jardins des Quais in Bordeaux in
December 2013, the rebound in investment remains a key objective, relying on a
sound financial footing, and in line with the strategic policy which is based
on a balance between the Paris region and major French cities.

6) CALENDAR

* 23 April 2014: First-quarter revenues
* 30 April 2014: Annual General Meeting
* 12 May 2014: Dividend payment (EUR0.90)
* 31  July  2014:  2014  half-year  revenues  and earnings
* 22 October 2014: Third quarter revenues

CONSOLIDATED  EARNINGS

(EURm) (1)                                           2011      2012      2013

Gross rental income                                  48.3      46.4      40.2
Net rental income                                    43.1      41.3      34.8
Other income                                          3.6       4.3       1.9
Operating expenses                                  (12.0)    (10.9)    (10.0)
Current EBITDA (2)                                   34.7      34.6      26.7
Current operating profit                             34.6      34.5      26.5
Other income and expenses                            (2.6)     (1.6)     (2.7)
Net profit or loss on disposals                       2.9      (8.5)     (0.1)
Operating profit (before value adjustments)          34.9      24.5      23.7
Net balance of value adjustments                      1.7      (5.2)    (18.4)
Net operating profit                                 36.6      19.2       5.4
Net financial cost                                  (18.2)    (16.9)    (11.5)
Fair value adjustments of financial instr.           (2.3)     (1.5)      4.0
Taxes                                                (0.4)      0.1      (1.4)
Associates                                            1.3       3.4      (5.3)
Miscellaneous (3)                                    (0.4)      0.3      (0.1)
Net profit                                           16.6       4.6      (8.8)
Net profit - Group share                             15.3       4.7      (8.8)

(1) Based on IFRS financial statements and EPRA recommendations.
(2) Current EBITDA represents the current operating profit excluding current
depreciation and amortisation costs. In 2011, 2012 and 2013, this amount
excludes the impairment of properties of the development business, which were
EUR3.0m, EUR1.4m and EUR1.2m respectively and which are recognised under other
income and expenses.
(3) Net profit from activities that have been discontinued or are being sold,
other financial income and expenses.

EPRA EARNINGS

(EURm) (1)                                           2011      2012      2013

Net profit - Group share                             15.3       4.7      (8.8)
Value adjustments for investment and
development properties (1)                            1.3       6.6      21.7
Net profit or loss on disposals                      (2.9)      8.5       0.1
Goodwill adjustment                                    -         -         -
Fair value adjustment of hedging instruments          2.3       1.5      (4.0)
Non-current tax, deferred and exit tax                0.5      (0.2)      0.9
Adjustments for associates                            1.3      (0.9)      7.2
Minority interests in respect of the above            0.8      (0.2)       -
EPRA earnings (4)                                    18.4      20.1      17.0

(4) The European Public Real Estate Association (EPRA) issued Best Practice
Recommendations in September 2011 which give guidelines for performance
measures. Additional guidances were released in January 2014. As detailed in
the EPRA adjustments note, EPRA earnings essentially excludes the effects of
fair value changes and gains or losses on sales. EPRA earnings for 2011 and
2012 were adjusted by reintegrating other operational and financial income and
expenses.

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

(EUR000')                                            2011      2012      2013

Gross rental income                                48,269    46,427    40,230
Net rental income                                  43,084    41,261    34,830
Other income                                        3,629     4,294     1,911
Corporate expenses                                (12,008)  (10,937)   (9,993)
Current EBITDA (2)                                 34,705    34,618    26,748
Current operating profit                           34,583    34,503    26,480
Other income and expenses                             357      (128)      676
Net financial cost                                (18,200)  (16,935)  (11,462)
Taxes (current)                                        23       (51)     (497)
Associates (current)                                2,569     2,495     1,914
Miscellaneous (current) (3)                          (434)      293       (98)
Net current profit                                 18,899    20,176    17,013
EPRA earnings (Net current profit - Gs (5)         18,423    20,094    17,009

Other income and expenses (non-current)            (2,969)   (1,422)   (3,332)
Net profit or loss on disposals                     2,931    (8,501)      (91)
Net balance of value adjustments                    1,679    (5,217)  (18,371)
Fair value adjustments of hedging instr.           (2,262)   (1,506)    4,032
Taxes (non-current)                                  (463)      197      (854)
Associates (non-current)                           (1,258)      906    (7,224)
Miscellaneous (non-current) (3)                         0         0        (0)
Net non-current profit                             (2,341)  (15,544)  (25,840)
Net non-current profit - gs (5)                    (3,160)  (15,382)  (25,840)
Net profit                                         16,558     4,632    (8,828)
Net profit-group share                             15,262     4,712    (8,831)

(5) Pdg means Group share.

ABOUT AFFINE GROUP

Affine is a property company specialising in commercial property. At the end
of 2013, Affine owned 60 properties with a total value of EUR627m, inclusive
of transfer taxes, with a total surface area of 549,000 sqm. The company owns
office properties (54%), retail properties (21%), warehouses and industrial
premises (25%). Its assets are fairly evenly divided between Ile-de- France
(Paris region) and other French regions.

Affine is also the reference shareholder (49.5%) of Banimmo, a Belgian property
repositioning company with operations in Belgium and France. At the end of
2013, Banimmo owned 19 office and retail properties worth EUR367m. Finally, the
Group also has a 99.9%-owned subsidiary Concerto European Developer which
specialises in logistics development.

Total Group assets amount to EUR993m.

In 2003, Affine opted for French real estate investment trust (SIIC) status.
Affine shares are listed on NYSE Euronext Paris (Ticker: IML FP / BTTP.PA;
ISIN: 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. www.affine.fr

CONTACT
INVESTOR RELATIONS                PRESS RELATIONS
Frank Lutz                        Watchowah - Didier Laurens
+33 (0)1 44 90 43 53 -            +33 (0)6 85 38 03 62 -
frank.lutz@affine.fr              didier.laurens@watchowah.com

2013 Full-Year Results

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14/12/2018 18:00

AFFINE (EPA:IML) FY13 - Increase in occupancy rate and rents

Transparency directive : regulatory news

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