Ireland | 23 August 2013 16:33
DEMIRE Deutsche Mittelstand Real Estate AG / Release of an announcement according to Article 37x of the WpHG [the German Securities Trading Act]
23.08.2013 16:33
Interim report according to Article 37x of the WpHG, transmitted by
DGAP - a company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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DEMIRE reports on the performance of the first three months of 2013/2014
- Disposals in Vienna have positive impact on results and lead to a further
reduction in financial debt
- On-going operating expenses scaled back consistently
- Net result for the period in the first quarter of 2013/2014 still
negative at EUR -0.8 million
- Improved equity ratio; liquidity secured
- Actively driven realignment
Frankfurt/Main, August 23, 2013 - DEMIRE Deutsche Mittelstand Real Estate
AG ('DEMIRE', ISIN DE000A0XFSF0) reports on the performance of the first
three months of the 2013/2014 fiscal year (April 1, 2013 to March 31,
2014). The first quarter was largely influenced by the realignment and
accompanying renaming of the Company which was approved at the
extraordinary General Meeting on June 27, 2013 by an overwhelming majority
of 99.99 percent. At the same time, the number of Supervisory Board members
was reduced from six to three members, and Prof. Dr. Wagner was unanimously
elected as a new Supervisory Board member. Going forward and in line with
the new strategy, DEMIRE will focus on existing real estate for
entrepreneurial medium-sized companies (the 'Mittelstand') in Germany.
In the first three months of the current 2013/2014 fiscal year, earnings
before interest and taxes (EBIT) amounted to EUR -0.8 million after EUR
-0.6 million in the previous year. The higher loss versus the previous year
was mainly the result of significantly lower income from investments
accounted for using the equity method. The sale of real estate companies
had a positive impact on earnings. The previous year's comparable quarter,
in contrast, did not contain any disposals.
In the first quarter of fiscal year 2013/2014, the profit on rental of real
estate inventory amounted to EUR 0.1 million, and thus remained at the
prior year's level. As a result of the disposal of the Delitzsch project in
the past fiscal year, rental income as well as expenses to generate rental
income both declined.
The profit/loss on sale of real estate companies of EUR 0.4 million (EUR 0
million in the previous year) included the sale of the Viennese
co-proprietors' building schemes as well as the asset management for
co-proprietors' building schemes which have already been placed. This
transaction resulted in additional EUR 0.2 million of positive earnings
effects which are reflected in other positions in the statement of income.
Profit/loss on asset management for third parties remained at the prior
year's level and amounted to EUR 0.02 million. In the future, this line
item will be limited to the management of the Blue Towers in
Frankfurt/Main.
Profit/loss from investments accounted for using the equity method
experienced a noticeable decline and fell from EUR 0.2 million in the prior
year's quarter to EUR -0.2 million in the reporting quarter. This change is
primarily the result of unfavourable currency effects as per the reporting
date.
Other operating income and other effects include income amounting to EUR
0.2 million (EUR -0.6 million in previous year) from unrealised fair value
adjustments in real estate inventory. In contrast to negative
reporting-date related currency effects in the prior year, the reporting
quarter recorded positive reporting-date related currency effects. Other
operating income amounted to EUR 0.2 million and thus remained below the
prior year's level of EUR 1.1 million. However, the comparable amount
contained a large reporting-date related currency effect.
General and administrative expenses experienced a slight increase to EUR
-1.1 million in comparison to EUR -1.0 million in the previous year due to
a EUR 0.3 million extraordinary effect. In contrast, on-going operating
expenses were cut considerably. Other operating expenses amounted to EUR
-0.4 million and thus hovered around last year's level.
Overall, in the first three months of 2013/2014, the Group's EBIT, net
profit/loss for the period, and net profit/loss attributable to parent
company shareholders amounted to EUR -0.8 million each compared to EUR -0.6
million each in the prior year.
Following our withdrawal from Austria and the complete disposal of the
asset management activities for co-proprietors' building schemes, we were
again able to mitigate risks and to reduce our financial debt.
As per the June 30, 2013 reporting date, total assets decreased to EUR 27.7
million from EUR 31.1 million on March 31, 2013. This was largely due of
the disposal of the Viennese co-proprietors' building schemes. This
transaction resulted in a reduction of real estate inventory to EUR 8.9
million from EUR 10.2 million and a reduction of trade accounts receivables
and other receivables to EUR 2.7 million from EUR 3.4 million. Cash and
cash equivalents declined to EUR 1.3 million as per the end of the
reporting quarter from EUR 2.3 million on March 31, 2013 primarily as a
result of the loss for the period.
On the liabilities side of the balance sheet, non-current financial
liabilities decreased significantly. As a result of the reclassification of
liabilities which now have a term of less than one year, non-current
financial liabilities amounted to EUR 6.1 million on June 30, 2013 after
EUR 9.2 million. As a result of the aforementioned reclassification,
current financial liabilities rose from EUR 5.0 million to EUR 5.6 million.
However, excluding this effect, they were reduced significantly. Trade
payables and other liabilities also decreased from EUR 1.1 million to EUR
0.9 million.
Shareholders' equity declined from EUR 14.3 million to EUR 13.4 million
mainly due to the loss for the period. The equity ratio amounted to 48.6
percent and was above the level as at March 31, 2013 (45.8 percent).
The net asset value (NAV) calculated according to EPRA requirements
amounted to EUR 13.55 million as at June 30, 2013. Based on 13.89 million
shares outstanding, this is equivalent to a NAV of EUR 0.98 per share.
Outlook
In the current fiscal year, the focus of activities is clearly on the
disposal of the remaining investments in Eastern Europe and the Black Sea
region. As a result of the difficult economic situation and bleak growth
prospects in these countries, the disposal of projects at economically
reasonable conditions continues to be a challenge.
The proceeds from the portfolio's disposals will be reinvested in German
commercial real estate. This means existing real estate which will generate
positive cash flows from the outset. Thus, the key performance indicator
for the actively managed real estate portfolio is clearly the rental
yields. By systematically planning, managing, and controlling the real
estate investments, their potential for success should increase and a
sustainable increase in their value should be achieved. The performance
will be particularly reflected by the development of rental income.
A further focus is on securing the Group's liquidity. Realignment and
sustainable investments in high-yield objects should result in a much less
tense liquidity situation and bring an improvement in earnings.
23.08.2013 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
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Language: English
Company: DEMIRE Deutsche Mittelstand Real Estate AG
Lyoner Straße 32
60528 Frankfurt am Main
Germany
Internet: www.demire.ag
End of Announcement DGAP News-Service
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