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CPI PROPERTY GROUP publishes half-year financial results for 2022

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DGAP-News: CPI PROPERTY GROUP / Key word(s): Half Year Results
CPI PROPERTY GROUP publishes half-year financial results for 2022
31.08.2022 / 23:28 CET/CEST
The issuer is solely responsible for the content of this announcement.

CPI Property Group

(société anonyme)

40, rue de la Vallée

L-2661 Luxembourg

R.C.S. Luxembourg: B 102 254

           

Press Release - Corporate News

 

Luxembourg, 31 August 2022

 

CPI PROPERTY GROUP publishes half-year financial results for 2022

 

CPI PROPERTY GROUP (hereinafter “CPIPG”, the “Company” or together with its subsidiaries the “Group”), a leading European landlord, hereby publishes unaudited financial results for the six-month period ended 30 June 2022.

 

“CPIPG has been positively transformed through the acquisitions of IMMOFINANZ and S IMMO,” said Martin Němeček, CEO of CPIPG. “The Group is now one of Europe’s largest landlords and owns the best real estate platforms in Central and Eastern Europe.”

 

Highlights for the first half of 2022 include:

  • CPIPG’s property portfolio increased to €20.9 billion (versus €13.1 billion at year-end 2021) as the Group consolidated the property portfolios of IMMOFINANZ (€5.4 billion) and S IMMO (€3.1 billion). Total assets reached €23.7 billion. EPRA NRV (NAV) grew by 21% to €8.5 billion.

  • Net rental income increased to €263 million (versus €175 million for H1 2021) and net business income rose to €276 million because of acquisitions, CPIPG’s 7.7% like-for-like growth in gross rental income and steady occupancy at 93.4%.

  • Hotels reported net income of €8 million (versus a loss of €4 million in H1 2021) reflecting the gradual post-COVID travel recovery and CPIPG’s effective cost management as an owner-operator.

  • Consolidated adjusted EBITDA was €261 million (+52% from H1 2021), while FFO was €171 million (+32% from H1 2021).

  • Due to the timing of CPIPG’s acquisitions, Net Loan-to-Value (LTV) increased to 44.8%, at the upper end of the Group’s financial policy target range. LTV is expected to peak temporarily in Q3, followed by a sharp reduction in coming quarters as the Group executes our €2 billion+ disposal pipeline.

  • Total liquidity was €2.5 billion, including €915 million of undrawn revolving credit facilities, the majority of which mature in early 2026.

  • Unencumbered assets decreased to 55% (vs. 70% at the end of 2021) reflecting the high proportion of secured debt at IMMOFINANZ and S IMMO. CPIPG will continue to closely monitor the level of unencumbered assets and expects to repay secured debt when unsecured pricing becomes attractive.

  • Net ICR stood at 3.5x. The Group has a low-cost, long-dated debt maturity profile and a high degree of indexation in our rental contracts (90%+) which should support ICR going forward, particularly as deleveraging targets are achieved.

“CPIPG’s commitment to our capital structure and credit ratings is unchanged,” said David Greenbaum, CFO. “Deleveraging will take slightly longer than initially expected, but we are fully confident to deliver.”

 

 

Notable Events Occurring after 30 June

 

Mandatory takeover offer for S IMMO

 

On 15 July 2022, CPIPG published a mandatory offer for S IMMO. Upon the conclusion of the initial acceptance period on 12 August 2022, CPIPG purchased an additional 36.66% stake, bringing the total shareholding stake to 79.20% (direct and indirectly through IMMOFINANZ). The additional acceptance period will close on 18 November 2022. The offer price represents a discount of 19% to book value.

 

Financing and Bridge Extension

 

In 2021 and 2022, CPIPG signed €3.75 billion of 2-year bridge loans for the acquisitions of IMMOFINANZ and S IMMO. In total, €3.4 billion has been spent on the acquisitions, funded by equity, cash and €2.5 billion of bridge drawings. About €900 million of the bridge loans have already been repaid, with €1.6 billion currently outstanding.  On 31 August 2022, the Group signed a facility which extended the maturity of all bridge loans until H1 2025.

 

Also in August 2022, S IMMO repaid €104 million of senior unsecured bonds maturing in 2027 and 2028 due to the embedded change of control provision. The repayment was funded from S IMMO’s ample cash balances.

 

In July 2022, CPIPG repaid a secured bank loan of €123 million maturing in December 2022 and raised a new 7-year secured bank loan of €275 million. The underlying assets were located in the Czech Republic and pricing was highly attractive.

 

Expansion of CPIPG’s Disposal Pipeline

 

In June 2022, CPIPG completed (on time) a disposal program initiated in August 2021, with gross proceeds of €1 billion. Disposals were executed across the Group’s portfolio, targeting non-core or highly mature assets.

 

Currently, CPIPG has a disposal pipeline exceeding €2 billion. The pipeline includes about 30 assets/transactions across offices, retail, hotels, residential and landbank in multiple geographies. Disposal plans were also confirmed by IMMOFINANZ (€1 billion) and S IMMO (€200 million). Overall, the consolidated Group is wellpositioned to dispose of substantially more than €2 billion of assets over the next 12 to 24 months.

 

A high degree of diversification, along with significant granularity (pipeline disposals range in size from €10 million to €200 million+) is a significant advantage for the Group. CPIPG does not depend on any asset, market, sector, investor, or trend in order to achieve our disposals. As a result, our execution confidence is high.

 

 

Half-year results webcast

 

CPIPG will host a webcast in relation to its financial results for the six-month period ended 30 June 2022. The webcast will be held on Wednesday 7 September 2022 at 10:00am CET / 9:00am UK.

 

Please register for the webcast in advance via the link below:

 

https://stream.brrmedia.co.uk/broadcast/6304b269da906b287e99c5f6

 

 

FINANCIAL HIGHLIGHTS

 

Performance

 

H1 2022

H1 2021

Change

 

 

 

 

 

Gross rental income

€ million

306

188

62.5%

Net rental income

€ million

263

175

50.2%

Net hotel income

€ million

8

(4)

292%

Total revenues

€ million

511

300

70.0%

Net business income

€ million

276

178

55.3%

 

 

 

 

 

Consolidated adjusted EBITDA

€ million

261

172

51.8%

Funds from operations (FFO)

€ million

171

129

32.1%

 

 

 

 

 

Net profit for the period

€ million

751

253

196%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

30-Jun-2022

31-Dec-2021

Change

 

 

 

 

 

Total assets

€ million

23,711

14,369

65.0%

Property portfolio

€ million

20,905

13,119

59.3%

Gross leasable area

sqm

6,723,000

3,667,000

83.3%

Share of green certified buildings*

%

33.9%

24.2%

9.7 p.p.

Occupancy

%

93.4%

93.8%

(0.4 p.p.)

Like-for-like gross rental growth**

%

7.7%

3.3%

4.4 p.p.

 

 

 

 

 

Total number of properties***

No.

889

367

142.2%

Total number of residential units

No.

16,370

11,755

39.3%

Total number of hotel rooms****

No.

7,992

7,025

13.8%

 

 

 

 

 

* According to GLA
** Based on gross rent, excluding one-time discounts, CPIPG standalone
*** Excluding residential properties in the Czech Republic, Germany and Austria
**** Including hotels operated, but not owned by the Group

 

 

 

 

 

 

 

Financing structure

 

30-Jun-2022

31-Dec-2021

Change

 

 

 

 

 

Total equity

€ million

10,409

7,695

35.3%

EPRA NRV (NAV)

€ million

8,493

7,039

20.6%

 

 

 

 

 

Net debt

€ million

9,364

4,682

100%

Net Loan-to-value ratio (Net LTV)

%

44.8%

35.7%

9.1 p.p.

Net debt/EBITDA

x

17.9x

12.7x

5.2x

Secured consolidated leverage ratio

%

17.4%

9.8%

7.6 p.p.

Secured debt to total debt

%

37.6%

27.0%

10.6 p.p.

Unencumbered assets to total assets

%

55.4%

70.4%

(15.0 p.p.)

Unencumbered assets to unsecured debt

%

193%

267%

(74 p.p.)

Net ICR

x

3.5x

4.6x

(1.1x)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED INCOME STATEMENT

 

Six-month period ended

(€ million)

30 June 2022

30 June 2021

Gross rental income

305.7

188.1

Service charge and other income

122.1

62.4

Cost of service and other charges

(107.7)

(48.8)

Property operating expenses

(56.8)

(26.5)

Net rental income

263.3

175.2

Development sales

0.4

12.0

Development operating expenses

(0.4)

(9.8)

Net development income

-

2.2

Hotel revenue

49.0

15.7

Hotel operating expenses

(41.4)

(19.6)

Net hotel income
Revenues from other business operations

7.6

(3.9)

Other business revenue

33.4

22.2

Other business operating expenses

(28.2)

(17.9)

Net other business income

5.2

4.3

Total revenues

510.6

300.4

Total direct business operating expenses

(234.5)

(122.6)

Net business income

276.1

177.8

Net valuation gain

287.2

222.0

Net gain on disposal of investment property and subsidiaries

32.3

0.5

Amortization, depreciation and impairment

(45.5)

(10.6)

Administrative expenses

(55.1)

(24.5)

Other operating income

290.9

2.9

Other operating expenses

(5.5)

(3.1)

Operating result

780.4

365.0

Interest income

6.6

11.3

Interest expense

(81.3)

(47.3)

Other net financial result

76.1

(22.1)

Net finance costs

1.4

(58.1)

Share of gain (loss) of equity-accounted investees (net of tax)

33.7

3.3

Profit before income tax

815.5

310.2

Income tax expense

(64.7)

(56.8)

Net profit from continuing operations

750.8

253.4

*The presented financial statements do not represent a full set of interim financial statements as if prepared in accordance with IAS 34

 

 

Gross rental income

Gross rental income increased by €117.6 million (62.5%) to €305.7 million in H1 2022 primarily due to income generated by IMMOFINANZ, contributions from other acquisitions and CPIPG’s 7.7% like-for-like growth.

Net hotel income

In H1 2022, net hotel income turned positive to €7.6 million, an increase from negative €3.9 million as both leisure and business travel recovered from the COVID-19 pandemic.

Net valuation gain

In H1 2022, the net valuation gain of €287.2 million reflected primarily revaluations of the Czech portfolio (€168.3 million) and IMMOFINANZ’s portfolio (€71.3 million).

Amortization, depreciation and impairment

Amortization, depreciation and impairment increased by €34.9 million to €45.5 million in H1 2022 primarily due to impairment of receivables of €18.4 million and impairment of property, plant and equipment (€6.7 million) which was negative in H1 2021 (release of impairment of €8.5 million).

Administrative expenses

Administrative expenses increased by €30.6 million to €55.1 million in H1 2022 primarily due to the acquisition of IMMOFINANZ (€24.3 million).

Other operating income

In H1 2022, other operating income represented primarily bargain purchase resulting from the acquisition of IMMOFINANZ and S IMMO in total of €285.9 million.

Interest expense

Interest expense increased by €34.0 million to €81.3 million in H1 2022 due to higher levels of debt and the consolidation of IMMOFINANZ.

Other net financial result

The other net financial result reflects primarily change in the fair value of financial derivatives (gain of €63.7 million).

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(€ million)

30 June 2022

31 December 2021

NON-CURRENT ASSETS

 

 

Intangible assets and goodwill

114.6

114.0

Investment property

18,953.7

10,275.8

Property, plant and equipment

1,164.9

854.6

Deferred tax assets

174.2

164.1

Equity accounted investees

719.0

1,216.1

Other non-current assets

412.7

338.0

Total non-current assets

21,539.1

12,962.6

CURRENT ASSETS

 

 

Inventories

16.9

11.8

Trade receivables

170.4

105.7

Cash and cash equivalents

1,557.1

501.8

Assets linked to assets held for sale

80.4

588.5

Other current assets

347.3

198.6

Total current assets

2,172.1

1,406.4

TOTAL ASSETS

23,711.2

14,369.0

EQUITY

 

 

Equity attributable to owners of the Company

6,799.0

5,991.8

Perpetual notes

1,646.7

1,611.6

Non-controlling interests

1,963.5

91.2

Total equity

10,409.2

7,694.6

NON-CURRENT LIABILITIES

 

 

Bonds issued

4,801.3

3,693.7

Financial debts

5,213.1

1,164.4

Deferred tax liabilities

1,755.9

1,082.4

Other non-current liabilities

155.3

96.2

Total non-current liabilities

11,925.6

6,036.7

CURRENT LIABILITIES

 

 

Bonds issued

424.6

41.1

Financial debts

481.8

233.5

Trade payables

155.8

116.2

Other current liabilities

314.2

246.9

Total current liabilities

1,376.4

637.7

TOTAL EQUITY AND LIABILITIES

23,711.2

14,369.0

*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 €9.3 billion (65%) to €23.7 billion at 30 June 2022 compared to 31 December 2021. The increase was driven primarily by the acquisition of IMMOFINANZ and S IMMO (investment property increased by €8.3 billion and cash / cash equivalents by €962 million), partly offset by a decrease in assets held for sale due to disposals in the period.

Total liabilities

Total liabilities increased by €6.7 billion to €13.3 billion at 30 June 2022 compared to 31 December 2021, largely due to the acquisition of IMMOFINANZ and S IMMO. The Group issued new bonds and Schuldschein of €1.2 billion and repaid €1.2 billion of bonds. During H1 2022, the Group drew new bridge facility with €1.2 billion outstanding at 30 June 2022.

Deferred tax liability increased by €674 million to €1.8 billion at 30 June 2022 compared to 31 December 2021, primarily due to the acquisition of IMMOFINANZ and S IMMO.

EQUITY AND EPRA NRV

Total equity increased from €7.7 billion at 31 December 2021 to €10.4 billion at 30 June 2022 (increase of €2.7 billion). The movements of equity components were as follows:

  • Increase due to the profit for the period of €750.8 million (profit to the owners of €682.8 million);

  • Increase in translation, revaluation and hedging reserve in total of €49.1 million;

  • Increase of non-controlling interests (NCI) by €1.8 billion through the acquisition of IMMOFINANZ and S IMMO;

  • Increase of retained earnings by €75.3 million due to acquisition of additional NCI;

EPRA NRV was €8.5 billion at 30 June 2022, representing an increase of 20.7% compared to 31 December 2021. The increase of EPRA NRV was driven by changes in the Group’s equity attributable to the owners (increase of retained earnings and other reserves) and changes in deferred tax in revaluations (primarily due to the acquisition of IMMOFINANZ and S IMMO and H1 2022 revaluations).

 

30 June 2022

31 December 2021

 

 

 

Equity attributable to the owners (NAV)

6,799

5,992

Effect of exercise of options, convertibles and other equity interests

-

-

Diluted NAV

6,799

5,992

Revaluation of trading property and PPE

-

-

Deferred tax on revaluations

1,737

1,090

Goodwill as a result of deferred tax

(43)

(43)

EPRA NRV (€ million)

8,493

7,039


For disclosures regarding Alternative Performance Measures used in this press release please refer to our Half-year Management Report 2022, chapters Glossary, Key Ratio Reconciliations and EPRA Performance; accessible at http://cpipg.com/reports-presentations-en.

 

 

Unaudited documents will be available tonight at the following link:

http://www.cpipg.com/reports-presentations-en

 

Half-year 2022 unaudited financial report

Half-year 2022 unaudited management report

 

 

 

For further information please contact:

 

Investor Relations

 

David Greenbaum

Chief Financial Officer
d.greenbaum@cpipg.com

 

Moritz Mayer

Manager, Capital Markets

m.mayer@cpipg.com

 

 

 

For more on CPI Property Group, visit our website: www.cpipg.com

Follow us on Twitter (CPIPG_SA) and LinkedIn


31.08.2022 CET/CEST 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

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:

contact@cpipg.com

Internet:

www.cpipg.com

ISIN:

LU0251710041

WKN:

A0JL4D

Listed:

Regulated Market in Frankfurt (General Standard); Regulated Unofficial Market in Dusseldorf, Stuttgart

EQS News ID:

1432825


 

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