BFW LIEGENSCHAFTEN AG Press Release 10 September 2014
bfw liegenschaften ag achieved solid operating results for the 1st Half-Year 2014 Frauenfeld, 10 September 2014 - bfw liegenschaften ag (SIX Swiss Exchange: BLIN) achieved good operating results for the first half-year 2014. Considering the lower total real estate portfolio compared to the previous year period, the achieved operating profit is in line with company expectations. Due to the fact that the Company had sold properties towards year-end 2013, the base of target rental income was also reduced from approximately CHF 20.5 million p.a. in fiscal year 2013 to approximately CHF 17.0 million p.a. for fiscal year 2014. This lower starting base is also reflected in the rental income and the results for the first half-year 2014. The Company achieved EBIT of CHF 7.0 million (H1 2013 CHF 9.3 million). Excluding the fair value changes in the interest rate swaps and receiver swaptions which had led to a negative effect before taxes of CHF -3.1 million in the first half-year 2014 (H1 2013 positive effect of CHF +5.5 million), the earnings including effects from changes in fair value of real estate investments and deferred taxes amounted to CHF 4.4 million (H1 2013 CHF 6.2 million). The balance sheet structure remained very solid with equity ratio of 52.5% at 30 June 2014. The Net Asset Value per share amounted to CHF 35.74 at balance sheet date. Details to the results for the first half-year 2014
Having successfully sold four properties towards year-end 2013 (for a total consideration of CHF 59.6 million and with target rental income of approximately CHF 3.5 million per annum), bfw liegenschaften ag started into fiscal year 2014 with target rental income of approximately CHF 17.0 million p.a. for its existing portfolio (previous year CHF 20.5 million p.a.).
Net rental income for the first half-year 2014 amounted to CHF 8.1 million (H1 2013 CHF 9.9 million). The reduction of the net rental income reflects the lower base of the property portfolio. The portfolio's cumulative vacancy rate of all investment properties increased by 0.5 percentage points compared to year-end 2013, but still remained on a rather low level of 4.1%. Direct operating expenses for investment properties declined above average relative to the size of the real estate portfolio, which is mainly due to the properties sold at year-end
2013. Overall, the direct operating expenses were CHF 1.5 million for the first half-year 2014 (H1 2013 CHF 1.9 million). As a percentage of net rental income, the direct operating expenses declined by 1.2 percentage points and represented 18.0% (H1 2013 19.2%).
Consulting and administrative expenses totalled CHF 1.2 million, which represents a reduction by TCHF 54 compared to the previous year period. Consulting expenses for legal advice and communication increased by TCHF 26 due to the fact that the "Minder Initiative" has been implemented completely, whereas the pay-out costs from capital reserves were reduced by TCHF 57 (in the previous year, the pay-out was partially in cash and partially through allotment of treasury shares). The management fee included in the administrative expenses was lower by TCHF 63 and amounted to TCHF 685, as a result of the lower total real estate portfolio at 30 June 2014. The remaining cost items in consulting and administrative expenses changed only marginally.
The valuation of the existing investment portfolio by KPMG, the independent real estate evaluator, resulted in positive changes in the fair value of real estate investments in an amount of CHF 1.6 million (H1 2013 CHF 2.6 million). The changes in value during the first half-year 2014 are mainly due to a specific increase in value of the property "Schaffhauserstrasse 210" in Zurich (conversion to a mainly residential property) in accordance with IFRS 13 (TCHF 187), the successful development of the new building projects "Seeleben" in Romanshorn (TCHF
517) and "Zweidlen", Glattfelden (TCHF 148) and other specific changes in value of TCHF 704 net. In contrast to the previous reporting period, the independent real estate evaluator did not apply lower discount rates for the first half-year 2014 (H1 2013 -7 basis points).
Operating results before interest and taxes (EBIT) amounted to solid CHF 7.0 million (H1 2013 CHF 9.3 million). The difference compared to the previous year period is mainly due to the sale of properties in the second half - year 2013. The Company had not sold any properties during the first half-years of 2014 or 2013.
Financial expenses, net were CHF 1.5 million (H1 2013 CHF 1.9 million). The decline is due to the lower amount of mortgage liabilities and slightly lower average mortgage interest rates. As a result of the lower interest rate level at 30 June 2014 compared to 31 December 2013, the fair value reflection of the interest rate swaps and receiver swaptions led to a negative effect before taxes of CHF -3.1 million (H1 2013 positive effect of CHF +5.5
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million). In accordance with IAS 39, the interest rate swaps and receiver swaptions must be valued at their current fair value at each balance sheet date and changes in the fair value have to be reflected in the income statement. The changes in fair value, resulting at each balance sheet date, do not impact cash flow and do not affect the Company's operating effectiveness or its dividend policy at all.
Taking into account the effects of the fair value changes of the interest rate swaps and receiver swaptions, the earnings including effects from changes in fair value of real estate investments and deferred taxes amounted to CHF 1.9 million for the first half-year 2014 (H1 2013 CHF 10.6 million). Excluding the fair value changes in the interest rate swaps and receiver swaptions, the net earnings were at CHF 4.4 million for the first half-year 2014 (H1 2013 CHF 6.2 million).
The balance sheet total amounted to CHF 353.6 million at 30 June 2014 and remained almost unchanged compared to CHF 359.4 million at year-end 2013. Mortgage liabilities in an amount of CHF 3.8 million were re- paid during the first half-year 2014. The duration of the mortgage liabilities of CHF 145.7 million was 3.2 years at
30 June 2014. CHF 62.0 million of the mortgage liabilities are hedged with interest rate swaps and receiver swaptions and the Company refinanced an additional CHF 10.3 million with 5-year fixed-rate mortgages during
the first half-year 2014.
The equity amounted to CHF 185.5 million at 30 June 2014, representing equity ratio of 52.5%. Excluding the fair value changes in the interest rate swaps and receiver swaptions, the equity ratio was 54.2% at 30 June 2014 (31.12.2013 53.8%).
The Net Asset Value per share was CHF 35.74 at 30 June 2014 (31.12.2013 CHF 36.57). The change of the Net Asset Value is due to the pay-out of CHF 6.2 million from capital reserves as per April 2014 and the profit contribution of CHF 1.9 million from the first half-year 2014. Excluding the fair value changes in the interest rate swaps and receiver swaptions, the Net Asset Value amounted to CHF 36.91 for the half-year period 2014.
The new building projects are progressing according to plans. The project "Bellevue Park" in Kreuzlingen with 52 city-apartments and 5 smaller commercial areas will be the first project to be finalised during late autumn 2014. The leasing of these apartments is in process and successful, with 79% of all apartments either already leased or reserved for the first time use. Completion of the project "Seeleben" in Romanshorn with 36 apartments is planned for spring 2015. The leasing activities for this project will start during September 2014. The other two projects in Grenchen ("Viaduktstrasse 9+11") with 28 apartments and Glattfelden ("Zweidlen") with 24 apartments will be ready for use by autumn 2015.
As a result of these new building activities, the target rental income during 2014 / 2015 will increase again gradually. The four new building projects together have planned target rental income of approximately CHF 3 million, once they are completed.
bfw liegenschaften ag continues to see the Swiss real estate market, especially for residential properties, as attractive. For the second half-year 2014 the Company expects a similar result from its operating business as in the first half of 2014 (level EBIT, without effects from changes in fair value of real estate investments).
The Company purchased a residential / commercial property at Witikonerstrasse 311/311b in Zurich for a purchase price of CHF 10.9 million in September 2014. The property has a target rental income of approximately TCHF 574 p.a. The transfer of ownership rights and risks took place with retrospective effect at 1 September
2014.
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Key Figures | ||
Income Statement | H1 2014 | H1 2013 |
in TCHF | ||
Rental income | 8 076 | 9 878 |
Total operating income | 8 076 | 9 878 |
Direct operating expenses for investment properties | - 1 451 | - 1 896 |
Consulting expenses | - 394 | - 424 |
Administrative expenses | - 803 | - 827 |
Total operating expenses | - 2 648 | - 3 147 |
Financial income 49 31
Financial expenses - 1 543 - 1 938
Amortisation interest rate swaps - 114 - 114
Valuation of the fair value of interest rate swaps -3 067 5 508
Taxes - 410 - 2 186
Earnings incl. effects from changes in fair value of real estate investments / deferred taxes 1 900 10 639 Earnings excl. effects from changes in fair value of real estate investments / deferred taxes 602 8 457 Earnings excl. fair value adjustments of interest rate swaps / deferred taxes 4 445 6 233Balance sheet at 30 June 2014 / 31 December 2013 in TCHF | 30.06.2014 | 31.12.2013 |
Total assets | 353 646 | 359 434 |
Total liabilities | 168 107 | 169 565 |
Equity | 185 539 | 189 869 |
Equity ratio | 52.5% | 52.8% |
Equity excl. fair value adjustments of interest rate swaps / deferred taxes | 191 592 | 193 376 |
Equity ratio excl. fair value adjustments of interest rate swaps / deferred taxes | 54.2% | 53.8% |
Net Asset Value (NAV) in CHF | 35.74 | 36.57 |
Net Asset Value excl. fair value adjustments of interest rate swaps / deferred taxes in CHF | 36.91 | 37.25 |
Total investment portfolio | 30.06.2014 | 31.12.2013 |
Total value of real estate portfolio in TCHF | 317 363 | 303 733 |
Total number of investment properties | 40 | 40 |
Total number of new building projects | 4 | 4 |
Yield net | 4.2% | 5.2% |
Yield net excl. new building projects | 4.6% | 5.5% |
Vacancy rate | 4.1% | 3.6% |
Ø interest rate excl. amortisation of interest rate swaps | 2.1% | 2.2% |
Ø interest rate incl. amortisation of interest rate swaps | 2.2% | 2.4% |
Ø remaining life to maturity of mortgages | 3.2 years | 3.2 years |
The Half-Year Report 2014 of bfw liegenschaften ag (German version) is available at http://www.bfwliegenschaften.ch/www.bfwliegenschaften.ch-
Investor Relations - Financial Reports. Direct link http://www.bfwliegenschaften.ch/index.php?id=2136
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Contacts
Beat Frischknecht Reto Borner
Chief Executive Officer Chief Financial Officer
+41 52 728 01 02 +41 52 728 01 06 beat.frischknecht@bfwliegenschaften.chmailto:reto.borner@bfwliegenschaften.chreto.borner@bfwliegenschaften.ch
16 March 2015 Publication Results Fiscal Year 2014 and Annual Report 2014
22 April 2015 Ordinary General Meeting of Shareholders
10 September 2015 Publication Results Half-Year 2015 and Half-Year Report 2015
www.bfwliegenschaften.ch
bfw liegenschaften ag is a real-estate company with headquarters in Frauenfeld in the canton of Thurgau, Switzerland. It focuses on attractive residential properties in commuting areas close to business centres in the German-speaking part of
Switzerland. The registered A shares of bfw liegenschaften ag are listed on the SIX Swiss Exchange (Symbol BLIN, Securities Number 1820611, ISIN Number CH 001 820 6117).
THIS PRESS RELEASE IS NOT BEING ISSUED IN THE UNITED STATES OF AMERICA AND SHOULD NOT BE DISTRIBUTED TO UNITED STATES PERSONS OR PUBLICATIONS WITH A GENERAL CIRCULATION IN THE UNITED STATES. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES. IN ADDITION, THE SECURITIES OF BFW LIEGENSCHAFTEN AG HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO U.S. PERSONS ABSENT REGISTRATION UNDER OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE UNITED STATES SECURITIES LAWS.
bfw liegenschaften ag ∙ Bahnhofstrasse 92 ∙ CH-8500 Frauenfeld Telefon +41 848 820 410 ∙ Telefax +41 848 820 411 ∙ www.bfwliegenschaften.ch ∙ mailto:info@bfwliegenschaften.chinfo@bfwliegenschaften.chPage 4 of 4
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