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Deutsche Konsum REIT-AG publishes preliminary figures for the past financial year 2022/2023
DEUTSCHE KONSUM REIT-AG
(Incorporated in the Federal Republic of Germany)
(Registration number: HRB 13072)
FSE Share Code: A14KRD
JSE Share Code: DKR
ISIN: DE000A14KRD3
LEI: 529900QXC6TDASMCSU89
("DKR" or "the Company")
DEUTSCHE KONSUM REIT-AG PUBLISHES PRELIMINARY FIGURES FOR THE PAST
FINANCIAL YEAR 2022/2023
Potsdam, 24 November 2023 - DKR publishes preliminary (unaudited) figures for the past
financial year 2022/2023:
FY 2022/2023 FY 2021/2022 Change %
Earnings figures (unaudited)
(TEUR)
Rental income 79,206 74,390 4,816 6.5
Net rental income 47,733 47,444 289 0.6
Valuation result -124,718 28,438 -153,156 <-100.0
Administrative expenses -43,034 -12,400 -30,634 <-100.0
EBIT -119,423 68,010 -187,434 <-100.0
Financial result -10,674 -7,624 -3,050 40.0
Taxes -72,519 0 -72,519 <-100.0
Net income -202,616 60,387 -263,003 <-100.0
FFO 36,367 41,115 -4,748 -11.5
FFO per share (in EUR), 0.72 0.82 -0.10 -11.8
diluted
aFFO 14,382 22,546 -8,164 -36.2
aFFO per share (in EUR), 0.29 0.45 -0.16 -36.4
diluted
Earnings per share, diluted -4.01 1.22 -5.23 <-100.0
(in EUR)
30 September 30 September change %
2023 2022
Balance sheet key (unaudited)
figures
(TEUR)
Investment properties 989,014 1,030,959 -41,945 -4.1
Total assets 1,043,531 1,181,814 -138,283 -11.7
Equity 306,601 514,300 -207,699 -40.4
Total debt 638,067 636,667 1,400 0.2
EPRA NTA per share (in 7.99 10.98 -2.99 -27.2
EUR)
(net) Loan-to-Value (LTV) 60.3 49.7 10.6 21.2
(in %)
Solid operating result / FFO in line with guidance
The Company's rental income increased by 6.5% from EUR 74.4 million in the previous year
to EUR 79.2 million in the 2022/2023 financial year. This was mainly due to the expansion of
the property portfolio and CPI-linked rent increases. The result from property management
was negatively impacted by higher management costs and expenses relating to other
periods and therefore rose only marginally.
Funds from operations ("FFO"), on the other hand, declined and fell by around 11.5% to
EUR 36.2 million (previous year: EUR 41.1 million) or EUR 0.72 per share (fully diluted)
(previous year: EUR 0.82 per share) and were in line with the guidance. This decrease was
mainly due to higher net interest expenses, which were around EUR 3.1 million higher than
in the previous year.
Similarly, aFFO (FFO after deduction of capitalised modernisation measures) declined and
amounted to around EUR 14.4 million (previous year: EUR 22.5 million) due to several major
revitalisation measures (capex) at various properties.
Property portfolio grows / property valuation leads to valuation loss of EUR 125
million
As a result of the transfer of benefits and encumbrances of twelve properties acquired in the
previous year less three properties sold in the financial year, the property portfolio has grown
by a total of nine properties with an area of around 35,000 square metres and generates an
annual rent of around EUR 79.2 million.
The annual revaluation of the property portfolio as at 30 September 2023, on the other hand,
results in a devaluation of around 9% (like-for-like) and a negative valuation result of around
EUR 125 million, which is mainly caused by the significantly changed interest rate
environment with much higher interest rates. After many years of revaluation uplifts fuelled
by the low interest rate policy, the ECB's interest rate turnaround with ten interest rate hikes
in a row has now resulted in a decline in valuation for the first time. Accordingly, DKR's real
estate portfolio (including properties for sale) is valued at around EUR 997 million as at 30
September 2023 and thus at a valuation multiple of around 12.6x the annual rent (30
September 2022: EUR 1,051 million or 14,3x the annual rent).
The gross acquisition yield of the overall portfolio averaged more than 10% as at 30
September 2023.
Status of negotiations with Obotritia Capital KGaA regarding outstanding loan
The Management Board is still in constructive negotiations with Obotritia Capital KGaA on
the repayment of the outstanding loan receivable with the support of a specialised lawyer
and has reached an agreement in principle. In addition to legal issues that still need to be
clarified, further collateral is currently being identified and its recoverability validated, and the
collateralisation methods are being determined. The collateral volume is intended to largely
cover the outstanding loan receivable of currently EUR 65.7 million. In addition, a repayment
agreement is to be concluded that defines the timing of the repayments. The notarisation of
the agreement and the provision of collateral in rem are to take place in the course of
December 2023.
Despite the planned collateralisation of the outstanding receivable, the Management Board
has decided to adjust the value of the outstanding loan receivable by around EUR 36 million
or 55% as a precautionary measure (the amount of the value adjustment is currently the
subject of the audit of the financial statements and may therefore still change). The value
adjustment will lead to a significant increase in administrative expenses, which will initially
have a strong negative impact on earnings in the past financial year. If the receivables that
have now been written down are repaid in full at a later date, this will result in valuation
income again.
Initial accounting for taxes
Furthermore, the Management Board has decided that, due to the unclear time perspective
and the unclear outcome of the legal dispute with the tax authorities with regard to
maintaining REIT status, all possible tax risks will be recognised for reasons of prudence.
Accordingly, the previously recognised tax receivables are derecognised and deferred taxes
are recognised for the first time. This leads to tax expenses totalling around EUR 72.5 million
in the IFRS annual financial statements, of which around EUR 62.2 million comprises the
first-time recognition of (non-cash) deferred tax liabilities.
Overall result for the period of around EUR -203 million expected / No dividend for FY
2022/2023
For the full financial year 2022/2023, the overall result for the period is expected to be
negative at around EUR -203 million, which is significantly influenced by non-cash expenses
such as the property devaluation (EUR -125 million), the value adjustment of the loan
receivable from Obotritia Capital KGaA (EUR -36 million) and the first-time recognition of
deferred tax liabilities (EUR -62.2 million).
Due to the negative annual result according to IFRS as well as under German GAAP, no
dividend can be proposed for the past financial year 2022/2023.
EPRA NTA (fully diluted) at around EUR 7.99 per share / Net LTV increases to around
60.3%
Based on the preliminary figures and after accounting for all of the aforementioned risks, the
EPRA NTA (fully diluted) as at 30 September 2023 is around EUR 7.99 per share (30
September 2022: EUR 10.98 per share). The intrinsic value of the share is therefore
significantly higher than the current share price.
Due to the negative annual result, the net LTV increased to around 60.3% at the end of the
financial year.
Negotiations with loan and bond creditors
With regard to the corporate bonds maturing in spring 2024, DKR is in negotiations with the
bondholder in order to find a mutually beneficial solution as quickly as possible.
Audited annual financial statements will be published on 19 December 2023
Deutsche Konsum REIT-AG will publish the final and audited results for the 2022/2023
financial year on 19 December 2023 in its annual report, which it will present during the
webcast/teleconference.
About the Company
Deutsche Konsum REIT-AG, Broderstorf, is a listed real estate company focusing on
German retail properties for everyday goods in established micro-locations. The focus of the
Company's activities is on the acquisition, management and development of local retail
properties with the aim of achieving a steady increase in value and the lifting of hidden
reserves.
The shares of the Company are listed on the Prime Standard of Deutsche Börse (ISIN:
DE000A14KRD3) and on the JSE (JSE Limited) (South Africa) by way of a secondary listing.
Contact:
Deutsche Konsum REIT-AG
Ms Mareike Kuliberda
Investor Relations
Marlene-Dietrich-Allee 12 b
14482 Potsdam
Tel: 0331 / 74 00 76 - 533
Fax: 0331 / 74 00 76 - 599
E-Mail: mk@deutsche-konsum.de
Potsdam, 24 November 2023
JSE Sponsor
PSG Capital
Date: 24-11-2023 05:30:00
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