CPI Property Group
(société anonyme)
40, rue de la Vallée
L-2661 Luxembourg
R.C.S. Luxembourg: B 102 254
Press Release - Corporate News
Luxembourg, 31 August 2023
CPI PROPERTY GROUP publishes half-year financial results for 2023
CPI PROPERTY GROUP (hereinafter CPIPG, the Company or together with its subsidiaries the Group), a leading European landlord, hereby publishes unaudited financial results for the six-month period ended 30 June 2023.
CPIPGs rental income continues to rise, even as the Group makes excellent progress on our disposal and deleveraging plans, said Martin Nmeek, CEO. I have every confidence that the second half of 2023 will show similar trends.
Highlights for the first half of 2023 include:
- Total assets were 23.1 billion, and EPRA NRV (NAV) grew to 8.1 billion.
- CPIPGs property portfolio was 20.3 billion (versus 20.9 billion at year-end 2022).
- The Group completed 657 million of disposals during H1 2023. In total, more than 900 million of disposals have been executed since CPIPGs 2 billion disposal plan was announced in August 2022.
- Contracted gross rent was 907 million.
- Net rental income increased to 399 million and net business income rose to 437 million.
- Hotels reported net income of 29 million, reflecting the recovery of travel across Europe.
- Consolidated adjusted EBITDA was 394 million, while FFO1 was 209 million.
- Rental income grew 8.3% on a like-for-like basis. A high proportion of the Groups rents are indexed, and CPIPG has faced no difficulty to date passing Inflation on to our tenants.
- Net Loan-to-Value (LTV) decreased to 49.9%, down 1 p.p. from year-end 2022. CPIPG remains confident in our target LTV range of 45-49% by year-end 2023.
- Net Debt was reduced by more than 500 million.
- The Group signed multiple secured bank loans and continued to raise senior unsecured debt, contributing to a total of more than 850 million in fresh external financing year to date.
- Total available liquidity was 2 billion as of 30 June.
- In April, the Group repurchased 335 million of bonds due in 2026, 2027, and 2028. CPIPG expects to continue utilising our liquidity resources to repurchase bonds and optimise financing costs over time.
- Unencumbered assets decreased to 51%, reflecting the completion of new secured loans during H1 2023.
- Net ICR was 2.6x, reflecting the relatively higher cost of the Groups temporary bridge financing arrangements.
Update on Bridge Financing
In connection with the acquisitions of IMMOFINANZ and S IMMO in 2022, CPIPG borrowed 2.7 billion through bridge loans from our relationship banks. As of 31 August 2023, about 1.7 billion of the bridge loans have been repaid through disposals, fresh external financing, and existing liquidity resources, for a current balance of about 1 billion.
CPIPG expects to make additional bridge repayments during September and October, further reducing the balance.
On 30 August 2023, CPIPG signed a new 635 million 3-year bridge loan provided by Santander, Société Générale, Komerní banka, Raiffeisen, SMBC, Barclays, and Erste Bank. The new bridge loan, which includes an accordion feature of up to 1 billion to accommodate potential additional lending interest from our relationship bank group, is expected to be drawn by the end of October and will replace the existing bridge arrangements.
Half-year results webcast
CPIPG will host a webcast in relation to its financial results for the six-month period ended 30 June 2023. The webcast will be held on Thursday, 7 September 2023, at 11:00 am CET / 10:00 am UK.
Please register for the webcast in advance via the link below:
https://edge.media-server.com/mmc/p/wjzps3y3
FINANCIAL HIGHLIGHTS
| Performance |
|
H1 2023 |
H1 2022 |
Change |
| |
|
|
|
|
| Total revenues |
million |
831 |
511 |
62.7% |
| Gross rental income (GRI) |
million |
457 |
306 |
49.7% |
| Net rental income (NRI) |
million |
399 |
263 |
51.4% |
| Net hotel income |
million |
29 |
8 |
289.5% |
| Net business income (NBI) |
million |
437 |
276 |
58.2% |
| |
|
|
|
|
| Consolidated adjusted EBITDA |
million |
394 |
261 |
50.8% |
| Funds from operations (FFO) |
million |
209 |
171 |
22.5% |
| |
|
|
|
|
| Net profit for the period |
million |
(50) |
751 |
(106.7%) |
| |
|
|
|
|
| |
|
|
| |
|
|
|
|
|
| Assets |
|
30-Jun-2023 |
31-Dec-2022 |
Change |
| |
|
|
|
|
| Total assets |
million |
23,066 |
23,521 |
(1.9%) |
| Property portfolio |
million |
20,256 |
20,855 |
(2.9%) |
| Gross leasable area |
sqm |
6,530,000 |
6,784,000 |
(3.7%) |
| Share of green certified buildings* |
% |
33.2 |
32.1 |
1.1 p.p. |
| Occupancy |
% |
92.3 |
92.8 |
(0.5 p.p.) |
| Like-for-like gross rental growth** |
% |
8.3 |
7.6 |
0.7 p.p. |
| |
|
|
|
|
| Total number of properties*** |
No. |
748 |
855 |
(12.5%) |
| Total number of residential units |
No. |
14,101 |
16,767 |
(15.9%) |
| Total number of hotel rooms**** |
No. |
8,061 |
7,810 |
3.2% |
| |
|
|
|
|
* According to GLA
** Based on gross rent, CPIPG standalone
*** Excluding residential properties in the Czech Republic, Germany and Austria
**** Including hotels operated, but not owned by the Group
|
|
|
| |
|
|
|
|
|
| Financing structure |
|
30-Jun-2023 |
31-Dec-2022 |
Change |
| |
|
|
|
|
| Total equity |
million |
9,308 |
9,263 |
0.5% |
| EPRA NRV (NAV) |
million |
8,051 |
8,005 |
0.6% |
| |
|
|
|
|
| Net debt |
million |
10,117 |
10,625 |
(4.8%) |
| Net Loan-to-value ratio (Net LTV) |
% |
49.9 |
50.9 |
(1.0 p.p.) |
| Net debt/EBITDA |
x |
12.9x |
17.5x |
(4.6x) |
| Secured consolidated leverage ratio |
% |
21.2 |
19.5 |
1.7 p.p. |
| Secured debt to total debt |
% |
43.0 |
38.9 |
4.1 p.p. |
| Unencumbered assets to total assets |
% |
50.9 |
54.4 |
(3.5 p.p.) |
| Unencumbered assets to unsecured debt |
% |
183% |
179% |
4.0 p.p. |
| Net ICR |
x |
2.6× |
3.2x |
(0.6×) |
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
CONSOLIDATED INCOME STATEMENT
| |
Six-month period ended |
| ( million) |
30 June 2023 |
30 June 2022 |
| Gross rental income |
457.5 |
305.7 |
| Service charge and other income |
219.0 |
122.1 |
| Cost of service and other charges |
(200.2) |
(107.7) |
| Property operating expenses |
(77.7) |
(56.8) |
Net rental income
|
398.6 |
263.3 |
| Development sales |
- |
0.4 |
| Development operating expenses |
- |
(0.4) |
| Net development income |
- |
- |
| Hotel revenue |
103.5 |
49.0 |
| Hotel operating expenses |
(74.0) |
(41.4) |
Net hotel income
Revenues from other business operations |
29.5 |
7.6 |
| Other business revenue |
50.7 |
33.4 |
| Other business operating expenses |
(42.0) |
(28.2) |
| Net other business income |
8.7 |
5.2 |
| Total revenues |
830.7 |
510.6 |
| Total direct business operating expenses |
(393.9) |
(234.5) |
| Net business income |
436.8 |
276.1 |
| Net valuation gain/ (loss) |
(217.2) |
287.2 |
| Net gain on disposal of investment property and subsidiaries |
(1.2) |
32.3 |
| Amortization, depreciation and impairment |
(34.9) |
(45.5) |
| Administrative expenses |
(64.5) |
(55.1) |
| Other operating income |
7.9 |
290.9 |
| Other operating expenses |
(15.2) |
(5.5) |
| Operating result |
111.7 |
780.4 |
| Interest income |
15.4 |
6.6 |
| Interest expense |
(165.5) |
(81.3) |
| Other net financial result |
28.3 |
76.1 |
| Net finance costs |
(121.8) |
1.4 |
| Share of gain of equity-accounted investees (net of tax) |
(5.4) |
33.7 |
| Profit before income tax |
(15.5) |
815.5 |
| Income tax expense |
(34.6) |
(64.7) |
| Net profit from continuing operations |
(50.1) |
750.8 |
Net rental income
Net rental income increased by 135.3 million (51%) to 398.6 million in H1 2023 primarily due to the acquisitions of IMMOFINANZ and S IMMO and strong like-for-like rental growth.
Net hotel income
Net hotel income increased from 7.6 million in H1 2022 to 29.5 million in H1 2023 as travel demand improved significantly across Europe and due to the acquisition of S IMMO.
Net valuation loss
Net valuation loss of 217.2 million in H1 2023 primarily relates to IMMOFINANZ (119 million) and S IMMO (80 million), mainly lower-yielding office and residential portfolios in Germany and offices in Austria.
Other operating income
Other operating income decreased in H1 2023 as there was a one-off bargain purchase from the acquisition of IMMOFINANZ and S IMMO of 285.9 million recognised in H1 2022.
Interest expense
Interest expense increased by 84.2 million in H1 2023 compared to H1 2022 primarily due to the acquisition of IMMOFINANZ (9.2 million) and S IMMO (18.2 million), the overall increase of cost of new financing and the relatively higher cost of the Groups temporary bridge financing.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| ( million) |
30 June 2023 |
31 December 2022 |
| NON-CURRENT ASSETS |
|
|
| Intangible assets and goodwill |
129.1 |
126.7 |
| Investment property |
18,201.0 |
18,486.2 |
| Property, plant and equipment |
1,105.4 |
1,100.0 |
| Deferred tax assets |
160.4 |
176.8 |
| Equity accounted investees |
729.5 |
732.3 |
| Other non-current assets |
714.2 |
668.5 |
| Total non-current assets |
21,039.6 |
21,290.5 |
| CURRENT ASSETS |
|
|
| Inventories |
40.5 |
23.5 |
| Trade receivables |
197.1 |
197.8 |
| Cash and cash equivalents |
1,167.4 |
1,033.2 |
| Assets linked to assets held for sale |
192.7 |
596.5 |
| Other current assets |
429,1 |
379.7 |
| Total current assets |
2,026.8 |
2,230.7 |
| TOTAL ASSETS |
23,066.4 |
23,521.2 |
| EQUITY |
|
|
| Equity attributable to owners of the Company |
6,611.2 |
6,579.8 |
| Perpetual notes |
1,619.2 |
1,584.4 |
| Non-controlling interests |
1,077.1 |
1,098.8 |
| Total equity |
9,307.5 |
9,263.0 |
| NON-CURRENT LIABILITIES |
|
|
| Bonds issued |
4,262.4 |
4,680.4 |
| Financial debts |
6,573.5 |
6,165.6 |
| Deferred tax liabilities |
1,700.0 |
1,727.9 |
| Other non-current liabilities |
222.6 |
208.2 |
| Total non-current liabilities |
12,758.5 |
12,782.1 |
| CURRENT LIABILITIES |
|
|
| Bonds issued |
277.9 |
405.8 |
| Financial debts |
170.6 |
360.4 |
| Trade payables |
167.5 |
232.2 |
| Other current liabilities |
384.4 |
477.7 |
| Total current liabilities |
1,000.4 |
1,476.1 |
| TOTAL EQUITY AND LIABILITIES |
23,066.4 |
23,521.2 |
Total assets
Total assets decreased by 454.8 million (1.9%) to 23,066.4 million as of 30 June. The decrease was driven primarily by revaluation of investment property of negative 217.2 million and property disposals of 657 million, offset by value-enhancing CapEx investments of 155 million.
Total liabilities
Total liabilities decreased by 548.3 million (3.8%) to 13,709.9 million as at 30 June 2023 compared to
31 December 2022, largely due to the repurchase of bonds issued by CPIPG of 345.2 million and the repayment of IMMOFINANZ bonds of 197.5 million. Further, there was a decrease of liabilities due to disposals of 121.4 million. On the other hand, financial debts increased by 218.1 million due to new loans.
EQUITY AND EPRA NRV
Total equity increased by 44.6 million to 9,307.5 million as at 30 June 2023. The movements of equity components were primarily as follows:
- Decrease due to the loss for the period of 50.1 million (loss to the owners of 69.2 million);
- Decrease in revaluation and hedging reserve in total of 8.5 million;
- Increase in translation reserve of 109.2 million;
EPRA NRV was 8,051 million as at 30 June 2023, representing increase of 0.6% compared to 31 December 2022. The increase of EPRA NRV was driven by the above changes in the Groups equity attributable to the owners (translation reserve).
| |
30 June 2023 |
31 December 2022 |
| |
|
|
| Equity attributable to the owners (NAV) |
6,611 |
6,580 |
| Effect of exercise of options, convertibles and other equity interests |
- |
- |
| Diluted NAV |
6,611 |
6,580 |
| Fair value of financial instruments |
(211) |
(243) |
| Deferred tax on revaluations |
1,694 |
1,711 |
| Goodwill as a result of deferred tax |
(43) |
(43) |
| EPRA NRV ( million) |
8,051 |
8,005 |
For disclosures regarding Alternative Performance Measures used in this press release please refer to our Half-year Management Report 2023, chapters Glossary of terms, Key ratio reconciliations and EPRA performance; accessible at https://cpipg.com/reports-presentations-en.
Unaudited documents will be available tonight at the following link:
https://www.cpipg.com/reports-presentations-en
Half-year 2023 unaudited financial statements
Half-year 2023 unaudited management report
For further information please contact:
Investor Relations
David Greenbaum
Chief Financial Officer
d.greenbaum@cpipg.com
Moritz Mayer
Manager, Capital Markets
m.mayer@cpipg.com
For more on CPI Property Group, visit our website: www.cpipg.com
Follow us on Twitter (CPIPG_SA) and LinkedIn
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