ADO Properties S.A. concludes first half of 2016 with significant earnings growth

DGAP-News: ADO Properties S.A. / Key word(s): Half Year Results

2016-08-17 / 07:00
The issuer is solely responsible for the content of this announcement.

ADO Properties S.A. concludes first half of 2016 with
significant earnings growth

- Significant increase in income from rental activities (+46%) and FFO1 (+51%)

- Substantial like-for-like rental growth of 5.2%

- Vacancy rate significantly reduced to 2.8% (31 December 2015: 4.0%)

- Net asset value per share increased by 14% to EUR 27.55 as of 30 June 2016 (31    December 2015: EUR 24.10)

- Additional successful portfolio acquisition after the reporting date expands portfolio to  18,600 units

- Jörn Stobbe FRICS replaces Jörg Schwagenscheidt as a board member

Berlin, 17 August 2016 - ADO Properties S.A., the only Prime Standard-listed residential real estate company that is focused solely on Berlin, concludes the first half of 2016 with significant earnings growth.

Key operating performance indicators show stable growth
ADO Properties' income from rental activities increased year on year by 46% to EUR 41.8 million (H1 2015: EUR 28.6 million). The rise was primarily due to additional acquisitions and like-for-like rental growth of 5.2% over the last twelve months. EBITDA from rental activities rose by 41%, from EUR 21.1 million in the first half of 2015 to EUR 29.7 million. The earnings in the second quarter of 2016 correspond to annualised total EBITDA of more than EUR 61 million.

FFO1 (excluding income from disposals) increased by 51% to EUR 19.9 million during the first six months of 2016, following EUR 13.1 million in the corresponding period of the previous year. Comparing Q2 2016 to Q1 2016 FFO1 increased by 11%.

By the end of the reporting period, the average in-place rent in the residential portfolio had increased to EUR 5.92 per sqm (31 December 2015: EUR 5.82). This corresponds to a like-for-like rental growth of 5.2% as of 30 June 2016. The company succeeded in further reducing the vacancy rate in the residential portfolio to 2.8% (31 December 2015: 4.0%) by the end of the second quarter.

Most recent portfolio acquisition expands portfolio to 18,600 units
The company's property portfolio has continued to grow substantially since the start of the year. The company took over 1,023 units in Berlin in the reporting period and another 1,900 units shortly thereafter. ADO Properties' portfolio value amounted to EUR 1.74 billion as of 30 June 2016. In total, the portfolio consisted of 16,700 units, including 15,700 residential units as of the reporting date. As of 30 June 2016, the net asset value of the company increased to EUR 1,060 million or EUR 27.55 per share. The company's financing structure remains conservative with a LTV of 40.3% as of 30 June 2016 and an average interest on loans of 1.97% p.a. Nearly all loans have a fixed interest rate or are hedged accordingly, with an average remaining maturity of c. 6 years.

Positive outlook for the 2016 financial year confirmed
"In June 2016, we had the privilege to get together with all our employees and many business partners to celebrate the tenth anniversary of our company's founding. The results of the first half of 2016 demonstrate that we continue our growth path in our anniversary year. However, growth is not a stand-alone goal; it must always go hand in hand with solid operating performance. Through our recent portfolio acquisitions, we were able to deploy a significant part of our liquidity and ensured further upside potential," said Rabin Savion, CEO of ADO Properties. "In light of the solid performance in the first six months of 2016, we are able to confirm our like-for-like rental growth target of at least 5% for the full financial year 2016 and continue to expect an FFO1 run rate of at least EUR 50 million at the end of the 2016."

Board of Directors: Jörn Stobbe appointed as new non-executive director
As of 1 September 2016 Jörn Stobbe FRICS (51) will be appointed as non-executive director in the board of directors of ADO Properties S.A. He replaces Jörg Schwagenscheidt who has resigned from his position by mutual consent. Jörn Stobbe, a qualified banker (Bankkaufmann) and solicitor, was previously a partner at the law firm Clifford Chance, one of Germany's leading law firms for real estate. He is also active as Chairman of the Board of the Royal Institution of Chartered Surveyors, first in Germany and now in Europe, and as a Board member of the Initiative Corporate Governance of the German Real Estate Industry.

Key Figures 30.06.16 30.06.15 Difference absolute Difference percentage
Income from rental activities, in thousands EUR 41,746 28,607 13,139 45.9%
EBITDA from rental activities, in thousands EUR 29,734 21,099 8,635 40.9%
EBITDA, in thousands EUR 31,271 21,822 9,449 43.3%
FFO 1 from rental activities
in thousands EUR
19,855 13,138 6,717 51.1%
FFO 1 per share, EUR 0.55 0.53 0.02 3%
FFO 2 (incl. disposal results),
in thousands EUR
21,392 13,861 7,531 54.3%
Key Figures 30.06.16 31.12.15 Difference absolute Difference percentage
EPRA NAV, in thousands EUR 1,060,680 843,621 217,059 25.7%
EPRA NAV per share, EUR 27.55 24.10 3.45 14.3%
LTV, in percent 40.3% 43.6%   -7.6%
Fair value of properties, MEUR 1,739 1,502    
Residential Units 15,749 14,856    
In-place-rent residential EUR/sqm/month 5.92 5.82    
Vacancy rate residential percent 2.8% 4.0%    
Rent for new letting, EUR/sqm/month 7.68 7.63    
Maintenance and CAPEX per sqm p.a. 26.7 20.8    

About ADO Properties

ADO Properties is a Berlin-based company active exclusively in the residential real estate sector and owning a property stock of 18,600 units. The company operates an entirely integrated, scalable in-house platform that includes a dedicated property administration. In addition to being accountable for the condition of its apartments and buildings, ADO Properties assumes responsibility for the people who live in them, its own employees and the surrounding environment. The portfolio of ADO Properties is concentrated in central locations inside Berlin's rapid-transit circle line and attractive districts on the city's periphery.

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