Corporate News

08/05/2013 | Corporate News

Fair Value REIT-AG increases FFO by 13% in the first quarter of 2013 and confirms full year forecast

  • IFRS consolidated net income of EUR 1.62 million (previous year: EUR 1.21 million)
  • Adjusted consolidated net income according to EPRA / FFO up 13% to EUR 1.45 million
  • REIT equity ratio increases to 53.3%


Munich, May 8, 2013 – Fair Value REIT-AG has made a successful start to the financial year 2013 and generated consolidated net income pursuant to IFRS of EUR 1.62 million or EUR 0.17 per share, in the first quarter. The increase compared to the previous year figure of EUR 1.21 million or EUR 0.13 per share resulted from substantially reduced net interest expenses in the Group and at the associated companies, which were in part boosted by the positive earnings contributions from the market valuation of interest rate hedges. 


The Fair Value Group's operating result, adjusted for changes in market values (EPRA earnings or FFO), totalled EUR 1.45 million in the first quarter of 2013, some 13% higher than in the previous year (EUR 1.28 million) on the back of a fall in interest expenses. This corresponds to earnings of EUR 0.16 per share (previous year quarter: EUR 0.14).


Total revenues in the first three months of 2013 amounted to a total of EUR 2.97 million, down from the previous year's total by EUR 0.17 million or 5%. The fall is largely the result of property sales in the previous year. The occupancy rate of the properties held by the Group and its participations increased, proportionate to Fair Value, from 94.4% to 95.0% in the quarter under review. The remaining terms of the lease agreements averaged 5.8 years as of the reporting date March 31, 2012.


Net rental income in the first quarter 2013 amounted to EUR 1.23 million, representing a fall of some EUR 0.74 million or 37% compared with the corresponding quarter in the previous year (EUR 1.97 million). This fall was driven by lower net sales and higher property-related expenses in connection with new lettings. The operating result of EUR 0.82 million was EUR 0.50 million or 38% lower than in the first three months of 2012 (EUR 1.31 million).


In contrast, earnings from the equity-accounted associated companies grew by EUR 0.25 million or 18% to EUR 1.67 million (previous year: EUR 1.41 million). The increase compared to the previous year figure exclusively resulted from an improvement in the financial result, which was 50% attributable to non-cash positive earnings contributions from the market valuation of interest rate hedges and 50% from repayment and interest-related reductions in net interest expenses.


The 21% fall in net interest expenses of EUR 1.0 million within the Group (previous year: EUR 1.27 million) also contributed to the fall in the operating result being more than offset. After accounting minority interests in subsidiaries, the Fair Value Group concluded the first quarter 2013 with a consolidated net income of EUR 1.62 million.


Group equity totalled EUR 79.78 million as of March 31, 2013. This means that the balance sheet net asset value per share in circulation increased by 3% to EUR 8.55 per share in the first three months of the year (December 31, 2012: EUR 8.30). The equity ratio as per paragraph 15 of the German REIT Act increased further to 53.3% of immovable assets (December 31, 2012: 52.6%).


Frank Schaich, CEO of Fair Value REIT-AG, commented on business development in the first quarter: "We regard the results from the first quarter of 2013 as confirmation of our targets and as a solid platform for the development throughout the rest of the year. That is why we are reiterating our forecast based on the assumption of adjusted consolidated net income (FFO) of EUR 5.3 million, or EUR 0.57 per share, for 2013 as a whole."


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A REIT – Higher Return for Investors

REIT stands for Real Estate Investment Trust. The assets of these listed companies in Germany consist mainly of real estate and investments in other real estate companies.


At the international level, REITs have been established for many years. On 1 January 2007, they were introduced in Germany as well.


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