- ISIN PAL0605071A3
Gazit-Globe
Gazit-Globe Reports Third Quarter 2014 Financial Results
DGAP-News: Gazit-Globe
25.11.2014 / 10:40
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FFO per share grew by 3%; Dividend increase of 2.2% for 2015
The Group Liquidity Totaled NIS 11.4 billion; Net debt to total assets (LTV)
declined to 51.5%, Compared to 55.3% as of September 30, 2013
TEL-AVIV, Israel, Nov. 25, 2014 (GLOBE NEWSWIRE) -- Gazit-Globe (NYSE:TSX)
(TASE:GZT), one of the world's leading multi-national real estate companies
focused on the acquisition, development and redevelopment of
supermarket-anchored shopping centers in major urban markets, announced today
its financial results for the three months and nine months ended September 30,
2014.
References to the 'Group' relate to Gazit-Globe's consolidated statements.
References to the 'Company' relate to Gazit-Globe's stand-alone financial
statements. Unless otherwise stated, financial information included in this
press release relates to the 'Group'.
Highlights:
-- NOI for the quarter decreased by 2% to NIS 840 million (US$ 227 million)
compared to NIS 854 million (US$ 231 million) in same quarter last year.
Excluding exchange rate fluctuations, NOI increased by 2% compared to same
quarter last year
-- FFO for the quarter increased by 2% to NIS 150 million (US$ 41 million), or
NIS 0.85 per share (US$ 0.23), compared to NIS 147 million (US$ 40
million), or NIS 0.83 per share (US$ 0.22), in same quarter last year
-- Investments during the quarter totaled NIS 1.1 billion (US$ 0.3 billion).
The group also recycled capital from the divestment of non-core assets in
the amount of NIS 1.3 billion (US$ 0.36 billion). (Assuming consolidation
of jointly controlled companies that are presented according to the equity
method, total investments equaled NIS 1.2 billion (US$ 0.32 billion), and
divestment of non-core assets totaled NIS 1.4 billion (US$ 0.38 billion))
-- Same Property NOI for the period, excluding the effect of changes in
exchange rates, grew by 1.7% compared to same period last year
-- Occupancy rate as of September 30, 2014 increased to 95.6%, compared to
occupancy rate of 95.0% as of December 31, 2013, and 95.0% as of September
30, 2013
-- Shareholders' equity as of September 30, 2014 totaled NIS 7,853 million
(US$ 2,125 million), or NIS 44.6 per share (US$ 12.07), compared to NIS
7,802 million (US$ 2,112 million), or NIS 44.4 per share (US$ 12.02), as of
December 31, 2013, and to NIS 7,984 million (US$ 2,161 million), or NIS
45.4 per share (US$ 12.29), as of September 30, 2013
-- EPRA NAV per share as of September 30, 2014 was NIS 58.3 (US$ 15.78)
compared to NIS 57.9 per share (US$ 15.67) as of December 31, 2013, and NIS
58.2 per share (US$ 15.75) as of September 30, 2013
-- As of September 30, 2014, the Group had liquid assets and unutilized
revolving credit facilities in the amount of NIS 11.4 billion (US$ 3.1
billion) of which NIS 3.3 billion (US$ 0.9 billion) is at the Company
level. A jointly controlled company (Atrium) has an additional NIS 1.2
billion (US$ 0.3 billion) in cash
-- As of June 30, 2014, net debt to total assets (LTV) was 51.5%, compared to
55.1% as of December 31, 2013, and 55.3% as of September 30, 2013
-- The Company's Board of Directors declared a dividend policy for 2015 of a
minimum quarterly dividend payment of NIS 0.46 per share, representing an
annualized dividend of NIS 1.84 per share, to be distributed as of the
first quarter of 2015, representing growth of 2.2% over the 2014 dividend
Roni Soffer, President of Gazit-Globe: 'We conclude a positive quarter
characterized by operational improvements. Year to date, we have continued to
execute our strategy focusing on improving the quality of our portfolio,
recycling capital, selling non-core assets, raising debt and equity, and
reducing our LTV at the Group level. These results have enabled us to increase
our dividend distribution for the 16th consecutive year.'
Financial highlights for third quarter 2014:
-- Rental income decreased by 4% to NIS 1,201 million compared to NIS 1,251
million in the third quarter 2013. Excluding the effect of changes in
exchange rates, rental income remained stable compared to the third quarter
2013
-- NOI for the quarter decreased by 2% to NIS 840 million compared to NIS 854
million in same quarter last year. Excluding the effect of changes in
exchange rates, NOI increased by 2% compared to same quarter last year
-- FFO for the quarter increased by 2% to NIS 150 million, or NIS 0.85 per
share, compared to NIS 147 million, or NIS 0.83 per share, in same quarter
last year
-- Net loss attributable to the Company's shareholders totaled NIS 13 million,
or NIS 0.08 per share, compared to Net Income of NIS 314 million, or NIS
1.78 per share, in the third quarter 2013. The loss resulted mainly from
marking-to-market financial derivatives (mostly currency swaps) compared to
the same quarter last year. In addition, in same quarter last year a
one-time profit was recorded from bargain purchase of Atrium's shares
-- Occupancy rate as of September 30, 2014 increased to 95.6%, compared to
occupancy rate of 95.0% as of December 31, 2013 and 95.0% as of September
30, 2013. Occupancy rate as of September 30, 2014 was 95.3% in North
America, 96.2% in Europe and 97.7% in Israel
-- The fair value gain from investment property and investment property under
development was NIS 88 million compared to NIS 119 million in the third
quarter 2013
-- Shareholders' equity as of September 30, 2014 totaled NIS 7,853 million, or
NIS 44.6 per share, compared to NIS 7,802 million, or NIS 44.4 per share,
as of December 31, 2013, and to NIS 7,984 million, or NIS 45.4 per share,
as of September 30, 2013
-- Cash flow from operating activities totaled NIS 265 million, compared to
NIS 407 million in the third quarter 2013
Financial highlights for the first nine-months of 2014:
-- Rental income decreased by 6% to NIS 3,654 million compared to NIS 3,877
million in the same period of 2013 Excluding the effect of changes in
exchange rates, rental income remained stable compared to the same period
of 2013
-- NOI decreased by 4% to NIS 2,489 million compared to NIS 2,602 million in
the same period of 2013. Excluding the effect of changes in exchange rates,
NOI increased by 1% compared to the same period of 2013
-- Same-property NOI for the first nine-months of 2014, excluding the effect
of changes in exchange rates, grew by 1.7%, resulting from an increase of
2.2% in the same-property NOI from North America, a 1.3% increase in
same-property NOI from Europe and a 1.0% increase in same-property NOI from
Israel
-- FFO increased by 6% to NIS 463 million, or NIS 2.63 per share, compared to
NIS 438 million, or NIS 2.58 per share, in the same period of 2013. The
number of outstanding shares grew by 4% between the periods
-- Net income attributable to the Company's shareholders totaled NIS 290
million, or NIS 1.63 per share, compared to NIS 703 million, or NIS 4.13
per share, in the same period of 2013. The loss resulted from the same
reason mentioned in the quarter highlights.
-- Cash flow from operating activities totaled NIS 722 million, compared to
NIS 550 million in the same period of 2013
Acquisition, Development, Redevelopment and Capital Recycling Activities:
-- During the first nine-months of 2014, the Group invested NIS 2.4 billion
including 5 income-producing properties totaling 78 thousand square meters
and adjacent land parcels for future development in a total amount of NIS
1.3 billion as well as NIS 1.1 billion in new development and redevelopment
projects
-- During the first nine-months of 2014, the group sold non-core properties
for a total amount of NIS 2.0 billion. (Assuming consolidation of jointly
controlled companies that are presented according to the equity method,
divestiture of non-core assets totaled NIS 2.4 billion)
-- As of September 30, 2014, the Group had 10 properties under development
with a gross leasable area of 204 thousand square meters and a total
investment of NIS 1.7 billion, and 24 properties under redevelopment with a
gross leasable area of 371 thousand square meters and a total investment of
NIS 4.2 billion. The additional cost to complete the properties under
development and redevelopment totals NIS 2.0 billion
-- During the first nine-months of 2014, ProMed Properties sold 12 medical
office building for $405 million pre-tax and transaction costs.
-- During the quarter, Gazit-Globe's wholly owned subsidiary, Gazit Brasil,
acquired the 'Top Center Shopping' property in Sao Paulo, Brazil for
approximately R$ 145 million (US$ 65 million)
-- During the first nine-months of 2014, Gazit-Globe's wholly owned
subsidiary, Gazit Germany, sold one property for 42 million euro, and
entered into an agreement to sell two additional properties for 51 million
euros, subject to the fulfillment of certain closing conditions
Financing Activities:
-- During the first nine-months of 2014, the Group raised NIS 2.2 billion in
equity. In addition, the Group raised approximately NIS 2.1 billion through
debenture offerings
-- The average cost of debt during the first nine-months of 2014was 4.7%,
compared to 5.0% in the same period of 2013
-- The Company's Board of Directors declared a quarterly cash dividend of NIS
0.45 per share payable on December 29, 2014 to shareholders of record as of
December 15, 2014, which represents an annualized projected dividend per
share of NIS 1.80
Exchange rate as of September 30, 2014 of 1 USD = 3.695 NIS
ACCOUNTING AND OTHER DISCLOSURES
The Company believes that publication of FFO, which is computed according to
EPRA guidance, more correctly reflects the operating results of the Company,
since the Company's financial statements are prepared in line with IFRS. In
addition, publication of FFO provides a better basis for the comparison of the
Company's operating results in a particular period with those of previous
periods and also provides a uniform financial measure for comparing the
Company's operating results with those published by other European property
companies.
In addition, pursuant to the investment property guideline issued by the Israel
Securities Authority in January 2011, FFO is to be presented in the
'Description of the Company's Business' section of the annual report of
investment property companies on the basis of the EPRA criteria.
As clarified in the EPRA and NAREIT position papers, the EPRA Earnings and the
FFO measures do not represent cash flows from operating activities according to
accepted accounting principles, nor do they reflect the cash held by a company
or its ability to distribute that cash, and they are not a substitute for the
reported net income. Furthermore, it is clarified that these measures are not
audited by the Company's independent auditors.
CONFERENCE CALL/WEB CAST INFORMATION
Gazit-Globe will host a conference call and webcast in English on Tuesday,
November 25, 2014 at 5:00 pm Israel Time / 4:00 pm Central European Time /
10:00 am Eastern Time, to review the third quarter 2014 financial results.
Shareholders, analysts and other interested parties can access the conference
call by dialing 1877 280 2342 (U.S./Canada) or 0800 279 4992 (U.K.) or +44 (0)
20 3427 1917 (International) or 1809 212 925(Israel), or on the Company's
website www.gazit-globe.com. (Conference ID 5382721)
For those unable to participate during the call, a replay will be available for
future review on Gazit-Globe's website under Investor Relations.
About Gazit-Globe
Gazit-Globe is one of the largest owners, developers and operators of
predominantly supermarket-anchored shopping centers in major urban markets
around the world. Gazit-Globe is listed on the New York Stock Exchange
(NYSE:GZT), the Toronto Stock Exchange (TSX:GZT) and the Tel Aviv Stock
Exchange (TASE:GZT) and is included in the TA-25 and Real-Estate 15 indices in
Israel. Gazit-Globe owns and operates 540 properties in more than 20 countries,
with a gross leasable area of approximately 6.4 million square meters and a
total value of approximately US$ 21 billion.
FOR ADDITIONAL INFORMATION
A comprehensive copy of the Company's annual report is available on Gazit-Globe
website at www.gazit-globe.com
Investors Contact: IR@gazitgroup.com, Media Contact: press@gazitgroup.com
Gazit-Globe Headquarters, Tel-Aviv, Israel, Tel: +972 3 6948000 / New York
Office, Tel: +1 212 897 9741
FORWARD LOOKING STATEMENTS
This release may contain forward-looking statements within the meaning of
applicable securities laws. In the United States, these statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such statements involve a number of known and unknown risks
and uncertainties, many of which are outside our control, that could cause our
future results, performance or achievements to differ significantly from the
results, performance or achievements expressed or implied by such
forward-looking statements. Important factors that could cause or contribute to
such differences include risks detailed in our public filings with the SEC and
the Canadian Securities Administrators. Except as required by applicable law,
we undertake no obligation to update any forward-looking or other statements
herein, whether as a result of new information, future events or otherwise.
Below please find excerpts from our third quarter 2014 financial Report. For
our third quarter 2014 financial Report in English, please go to
http://www.gazitglobe.com/financial-reports.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
--------------------------------------------------------------------------------
-
September 30, December
31,
----------------
2014 *)2013 2013
----------------------------
NIS in millions
----------------------------
ASSETS
----------------------------------------------------
CURRENT ASSETS
Cash and cash equivalents 1,993 748 1,018
Short-term deposits and loans 376 752 504
Marketable securities 112 161 100
Financial derivatives 23 92 39
Trade receivables 584 695 689
Other accounts receivable 315 258 302
Inventory of buildings and apartments for sale 657 688 692
Income taxes receivable 56 15 19
----------------------------
4,116 3,409 3,363
Assets classified as held for sale 1,404 573 611
----------------------------
5,520 3,982 3,974
----------------------------
NON-CURRENT ASSETS
Equity-accounted investees 6,130 5,909 5,907
Other investments, loans and receivables 512 828 659
Available-for-sale financial assets 647 349 435
Financial derivatives 745 1,191 769
Investment property 53,310 53,836 53,309
Investment property under development 2,468 2,470 2,479
Non-current inventory 4 23 23
Fixed assets, net 162 164 160
Intangible assets, net 103 113 106
Deferred taxes 98 183 106
----------------------------
64,179 65,066 63,953
----------------------------
69,699 69,048 67,927
============================
*) Restated and Retrospectively adjusted, see Notes
2f and 8.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
------------------------------------------------------------
September 30, December
31,
------------------
2014 *)2013 2013
-----------------------------
NIS in millions
-----------------------------
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Credit from banks and others 383 286 257
Current maturities of non-current liabilities 2,851 2,308 2,914
Financial derivatives 61 44 32
Trade payables 849 906 940
Other accounts payable 1,306 1,263 1,272
Advances from customers and buyers of apartments 281 284 267
Income taxes payable 118 30 32
-----------------------------
5,849 5,121 5,714
Liabilities attributed to assets held for sale 72 54 73
-----------------------------
5,921 5,175 5,787
-----------------------------
NON-CURRENT LIABILITIES
Debentures 23,287 22,218 22,231
Convertible debentures 1,238 1,283 1,221
Interest-bearing loans from financial 10,476 14,037 12,692
institutions and others
Financial derivatives 83 180 169
Other liabilities 179 207 198
Deferred taxes 3,471 3,333 3,276
-----------------------------
38,734 41,258 39,787
-----------------------------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
Share capital 229 229 229
Share premium 4,297 4,289 4,288
Retained earnings 5,213 5,012 5,160
Foreign currency translation reserve (1,974) (1,680) (2,000)
Other reserves 109 155 146
Loans to purchase shares **) -- -- --
Treasury shares (21) (21) (21)
-----------------------------
7,853 7,984 7,802
Non-controlling interests 17,191 14,631 14,551
-----------------------------
Total equity 25,044 22,615 22,353
-----------------------------
69,699 69,048 67,927
=============================
*) Restated and Retrospectively adjusted, see
Notes 2e, 2f and 8.
**) Represents an amount of less than NIS 1
million.
CONSOLIDATED STATEMENTS OF INCOME
--------------------------------------------------------------------------------
-
Nine months ended Three months Year
ended ended
September 30, September 30, Decembe
r 31,
-------------------------------------
2014 **)2013 2014 **)2013 2013
---------------------------------------------
NIS in millions (except for per share data)
---------------------------------------------
Rental income 3,654 3,877 1,201 1,251 5,146
Property operating expenses 1,165 1,275 361 397 1,689
---------------------------------------------
Net operating rental income 2,489 2,602 840 854 3,457
---------------------------------------------
Revenues from sale of buildings, 1,014 1,275 411 348 1,672
land and construction work
performed
Cost of buildings sold, land and 1,278 1,211 427 335 1,688
construction work performed
---------------------------------------------
Gross profit (loss) from sale of (264) 64 (16) 13 (16)
buildings, land and construction
work performed
---------------------------------------------
Total gross profit 2,225 2,666 824 867 3,441
Fair value gain from investment 354 *) 526 88 *) 119 962
property and investment property
under development, net
General and administrative (442) *) (450) (146) *) (142) (610)
expenses
Other income 8 187 3 180 218
Other expenses (49) (55) (28) (1) (74)
Company's share in earnings of 199 166 87 61 149
equity-accounted investees, net
---------------------------------------------
Operating income 2,295 3,040 828 1,084 4,086
Finance expenses (1,483) (1,732) (591) (579) (2,185)
Finance income 254 378 30 74 549
---------------------------------------------
Income before taxes on income 1,066 1,686 267 579 2,450
Taxes on income 252 162 66 19 265
---------------------------------------------
Net income 814 1,524 201 560 2,185
=============================================
Attributable to:
Equity holders of the Company 290 703 (13) 314 927
Non-controlling interests 524 821 214 246 1,258
---------------------------------------------
814 1,524 201 560 2,185
=============================================
Net earnings (loss) per share
attributable to equity holders of
the Company:
Basic net earnings (loss) 1.65 4.14 (0.08) 1.78 5.41
=============================================
Diluted net earnings (loss) 1.63 4.13 (0.08) 1.78 5.35
=============================================
*) Reclassified, refer to Note 2d.
**) Restated and Retrospectively
adjusted, see Notes 2e, 2f and 8.
FFO (EPRA Earnings)
--------------------------------------------------------------------------------
-
The table below presents the calculation of the Company's FFO, calculated
according to the recommendations of EPRA and the guidelines of the Israel
Securities Authority, and its FFO per share for the stated periods:
For the 9 months For the 3 months For the
ended ended September year
September 30, 30, ended
December
31
---------------------------------------
2014 2013 2014 2013 2013
------------------------------------------------
NIS in millions (other than per share data)
------------------------------------------------
Net income attributable to 290 *) 703 (13) *) 314 *) 927
equity holders of the Company
for the period
------------------------------------------------
Adjustments:
Fair value gain from investment (354) **)(526) (88) **)(119) **)(962)
property and investment
property under development, net
Capital loss on sale of 48 39 29 (1) 52
investment property
Changes in the fair value of (156) (292) 62 (46) (435)
financial instruments,
including derivatives,
measured at fair value through
profit or loss
Adjustments with respect to 62 6 (2) 2 60
equity-accounted investees
Loss from decrease in interest 1 10 -- -- 11
in investees
Deferred taxes and current 245 *) 153 47 *) 17 *) 262
taxes with respect to disposal
of properties
Gain from bargain purchase -- (173) -- (173) (173)
Acquisition costs recognized in 5 5 2 3 10
profit or loss
Loss from early redemption of 135 145 70 -- 142
interest-bearing liabilities
and financial derivatives
Non-controlling interests' (6) *) 116 (31) **) 22 *) 375
share in above adjustments
------------------------------------------------
Nominal FFO 270 186 76 19 269
================================================
Additional adjustments:
CPI and exchange rate linkage 13 163 28 107 152
differences
Depreciation and amortization 11 12 3 4 16
Adjustments with respect to (3) 14 13 (5) 27
equity-accounted investees
Other adjustments(1) 172 **) *) 63 30 **) 22 **) 121
------------------------------------------------
FFO according to the management 463 438 150 147 585
approach
================================================
FFO according to the management 2.63 2.58 0.85 0.83 3.42
approach per share (in NIS)
================================================
FFO according to the management 2.63 2.58 0.85 0.83 3.41
approach per share (diluted)
(in NIS)
================================================
Number of shares used in the 175,910 169,518 175,978 175,785 171,103
basic FFO per share
calculation (in thousands) (2)
================================================
Number of shares used in the 176,013 169,754 176,080 176,024 171,413
diluted FFO per share
calculation (in thousands) (2)
================================================
*) Restated, (refer to section 1.4 above) and retrospectively adjusted for
implementation of a clarification to IAS 12, refer to Notes 2e, 2f and 8 to the
financial statements.
**) Reclassified, refer to Note 2d to the financial statements.
1) Income and expenses adjusted against the net income for the purpose of
calculating FFO, which include the adjustment of expenses and income from
extraordinary legal proceedings not related to the Reporting Periods,
non-recurring expenses relating to termination of engagements with senior Group
officers, income and expenses from operations not related to income-producing
property (including the results of Dori Group), as well as internal leasing
costs (mainly salary) incurred in the leasing of properties.
2) Weighted average for the period.
News Source: NASDAQ OMX
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25.11.2014 Dissemination of a Corporate News, transmitted by DGAP - a
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Language: English
Company: Gazit-Globe
Panama
ISIN: PAL0605071A3
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