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, 30 August 2024
CPI PROPERTY GROUP publishes financial results for the first half of 2024
CPI PROPERTY GROUP (“CPIPG” or the “Group”), a leading European landlord, hereby publishes unaudited financial results for the six-month period ended 30 June 2024.
“CPIPG’s consistent growth in rental income demonstrates once again the benefits of our diversified, resilient and high-quality portfolio,” said David Greenbaum, CEO. “Further reducing leverage and complexity remain our key priorities.”
Highlights for the first half of 2024 include:
- Total assets were €21.2 billion, and EPRA NRV was €6.8 billion.
- CPIPG’s property portfolio was €18.6 billion (versus €19.5 billion at year-end 2023) reflecting disposals, a modest decline in valuations (-0.8%) and FX movements, partially offset by CapEx investments.
- The Group closed €980 million of disposals year-to-date. Nearly €400 million of signed disposals are expected to close in the next 2-3 months.
- Net rental income increased by 5.0% to €418 million despite disposals driven by like-for-like rental growth of 4.4%. Net business income rose to €443 million.
- Consolidated adjusted EBITDA was €395 million; FFO1 was €200 million.
- Occupancy remained solid at 91.3% with a stable WAULT of 3.4 years.
- The EPRA topped-up net initial yield increased by 0.3% versus year-end to 5.7%.
- In May 2024, CPIPG issued a €500 million 5-year green bond, with proceeds used to fully repay our remaining bridge facility.
- Net LTV decreased to 50%, down 2.3 p.p. from year-end 2023. Net Debt was reduced by more than €900 million compared to year-end.
- Net debt/EBITDA declined by 1.3x to 11.8x on an annualised basis versus year-end.
- Unencumbered assets stood at 49%, and net ICR increased slightly to 2.6x.
- In June 2024, the Group completed a minority equity investment in part of our portfolio in Poland from Sona Asset Management (UK) LPP for €250 million.
- Total available liquidity was €1.7 billion at the end of H1 2024, covering bond maturities over the next two years.
Completion of independent review of short seller allegations
Earlier today, CPIPG published an update for our stakeholders regarding the completion of an independent review by Global Law firm White & Case relating to the allegations raised by a short seller.
The investigation found no evidence to substantiate the short seller’s claims.
The separate press release and further information can be found here.
Other selected events occurring post-H1
On 12 July, S IMMO completed the sale of the HOTO Business Tower in Zagreb.
On 20 August, IMMOFINANZ sold the myhive Victorei office development in the old town of Bucharest for approximately €27 million.
Half-year results webcast
CPIPG will host a webcast in relation to its financial results for the six-month period ending 30 June 2024. The webcast will be held on Thursday, 5 September 2024, 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/5vj8vceb
FINANCIAL HIGHLIGHTS
| Performance |
|
H1 2024 |
H1 2023 |
Change |
| |
|
|
|
|
| Total revenues |
€ million |
811 |
831 |
(2.3%) |
| Gross rental income (GRI) |
€ million |
472 |
457 |
3.2% |
| Net rental income (NRI) |
€ million |
418 |
399 |
5.0% |
| Net hotel income[1] |
€ million |
18 |
29 |
— |
| Net business income (NBI) |
€ million |
443 |
437 |
1.4% |
| |
|
|
|
|
| Consolidated adjusted EBITDA |
€ million |
395 |
394 |
0.3% |
| Funds from operations (FFO) |
€ million |
200 |
209 |
(4.3%) |
| |
|
|
|
|
| Net profit for the period |
€ million |
(3) |
(50) |
94.5 |
| |
|
|
|
|
| |
|
|
| |
|
|
|
|
|
| Assets |
|
30-Jun-2024 |
31-Dec-2023 |
Change |
| |
|
|
|
|
| Total assets |
€ million |
21,231 |
21,930 |
(3.2%) |
| Property portfolio |
€ million |
18,623 |
19,531 |
(4.7%) |
| Gross leasable area |
sqm |
6,485,000 |
6,462,000 |
0.4% |
| Share of green certified buildings* |
% |
41.4 |
40.6 |
0.8 p.p. |
| Occupancy |
% |
91.3 |
92.1 |
(0.8 p.p.) |
| Like-for-like gross rental growth** |
% |
4.4 |
7.9 |
(3.5 p.p.) |
| |
|
|
|
|
| Total number of properties*** |
No. |
665 |
711 |
(6.5%) |
| Total number of residential units |
No. |
13,273 |
13,630 |
(2.6%) |
| Total number of hotel rooms**** |
No. |
6,845 |
8,690 |
(21.2%) |
| |
|
|
|
|
| *According to property portfolio value |
|
|
** Based on gross headline rent
*** Excluding residential properties in the Czech Republic
**** Including hotels operated, but not owned by the Group
|
|
|
| |
|
|
|
|
|
| Financing structure |
|
30-Jun-2024 |
31-Dec-2023 |
Change |
| |
|
|
|
|
| Total equity |
€ million |
8,432 |
8,257 |
2.1% |
| EPRA NRV (NAV) |
€ million |
6,791 |
7,033 |
(3.4%) |
| |
|
|
|
|
| Net debt |
€ million |
9,312 |
10,220 |
(8.9%) |
| Net Loan-to-value ratio (Net LTV) |
% |
50.0 |
52.3 |
(2.3 p.p.) |
| Net debt/EBITDA |
x |
11.8x |
13.1x |
(1.3x) |
| Secured consolidated leverage |
% |
23.3 |
24.0 |
(0.7 p.p.) |
| Secured debt to total debt |
% |
47.1 |
46.5 |
0.6 p.p. |
| Unencumbered assets to total assets |
% |
48.9 |
47.8 |
1.1 p.p. |
| Unencumbered assets to unsecured debt |
% |
187 |
174 |
13.0 p.p. |
| Net interest coverage (Net ICR) |
x |
2.6x |
2.5x |
0.1x |
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
[1] Due to the sale of a 50% stake in CPI Hotels, the hotel operating entity, income due from most hotel properties have been reclassified as rental income, as opposed to hotel income previously. Thus, the current hotel income figures are not comparable on a like-for-like basis to last year’s figures.
CONSOLIDATED INCOME STATEMENT
| |
Three-month period ended |
| (€ million) |
30 June 2024 |
30 June 2023 |
| Gross rental income |
472.0 |
457.5 |
| Service charge and other income |
216.0 |
219.0 |
| Cost of service and other charges |
(191.6) |
(200.2) |
| Property operating expenses |
(78.1) |
(77.7) |
Net rental income
|
418.3 |
398.6 |
| Development sales |
12.7 |
– |
| Development operating expenses |
(11.4) |
– |
| Net development income |
1.3 |
– |
| Hotel revenue |
68.8 |
103.5 |
| Hotel operating expenses |
(50.8) |
(74.0) |
Net hotel income
Revenues from other business operations |
18.0 |
29.5 |
| Other business revenue |
41.7 |
50.7 |
| Other business operating expenses |
(36.6) |
(42.0) |
| Net other business income |
5.1 |
8.7 |
| Total revenues |
811.2 |
830.7 |
| Total direct business operating expenses |
(368.5) |
(393.9) |
| Net business income |
442.7 |
436.8 |
| Net valuation loss |
(153.7) |
(217.2) |
| Net loss on disposal of investment property and subsidiaries |
(14.6) |
(1.2) |
| Amortization, depreciation and impairment |
(16.0) |
(34.9) |
| Administrative expenses |
(68.3) |
(64.5) |
| Other operating income |
12.7 |
7.9 |
| Other operating expenses |
(9.9) |
(15.2) |
| Operating result |
192.9 |
111.7 |
| Interest income |
20.9 |
15.4 |
| Interest expense |
(175.0) |
(165.5) |
| Other net financial result |
3.0 |
28.3 |
| Net finance costs |
(151.1) |
(121.8) |
| Share of gain of equity-accounted investees (net of tax) |
(20.7) |
(5.4) |
| Profit before income tax |
21.1 |
(15.5) |
| Income tax expense |
(23.9) |
(34.6) |
| Net profit from continuing operations |
(2.8) |
(50.1) |
Gross rental income
Gross rental income increased by €14.5 million (3.17%) to €472 million in Q2 2024 compared to Q2 2023. The change was driven by reclassification of hotels from PPE to Investment property (and related revenue from hotels revenue to gross rental income) of €5.1 million and inflation indexation of rental income by the Group.
Administrative expenses
Administrative expenses increased by €3.8 million in Q2 2024 compared to Q2 2023, primarily due to increase of overall advisory costs.
Net valuation loss
Net valuation loss of €153.7 million in Q2 2024 was represented primarily by revaluation loss generated by S IMMO (€84.2 million), Immofinanz (€28.4 million) and selected office portfolio in Prague.
Interest expense
Net interest expense increased by €4.0. million in Q2 2024 compared to Q2 2023, mainly due to an overall increase in the cost of financing. IMMOFINANZ and S IMMO net interest expense increased by €4.6 million and €6.5 million, respectively.
Net hotel income
Net hotel income decreased by €11.5 million due to disposal of part of the Group´s hotels portfolio in March 2024.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| (€ million) |
30 June 2024 |
31 December 2023 |
| NON-CURRENT ASSETS |
|
|
| Intangible assets and goodwill |
80.9 |
129.8 |
| Investment property |
16,886.8 |
17,262.7 |
| Property, plant and equipment |
379.6 |
866.5 |
| Deferred tax assets |
117.9 |
118.2 |
| Equity accounted investees |
784.7 |
717.2 |
| Other non-current assets |
600.2 |
452.1 |
| Total non-current assets |
18,850.1 |
19,546.5 |
| CURRENT ASSETS |
|
|
| Inventories |
81.8 |
73.5 |
| Trade receivables |
229.0 |
227.7 |
| Cash and cash equivalents |
1,162.5 |
1,022.6 |
| Assets linked to assets held for sale |
522.3 |
722.7 |
| Other current assets |
385.6 |
337.3 |
| Total current assets |
2,381.2 |
2,383.8 |
| TOTAL ASSETS |
21,231.3 |
21,930.3 |
| EQUITY |
|
|
| Equity attributable to owners of the Company |
5,372.2 |
5,567.6 |
| Perpetual notes |
1,623.4 |
1,585.2 |
| Non-controlling interests |
1,436.7 |
1,104.5 |
| Total equity |
8,432.3 |
8,257.3 |
| NON-CURRENT LIABILITIES |
|
|
| Bonds issued |
4,724.9 |
4,274.1 |
| Financial debts |
4,925.0 |
6,325.7 |
| Deferred tax liabilities |
1,489.8 |
1,547.7 |
| Other non-current liabilities |
211.2 |
223.7 |
| Total non-current liabilities |
11,350.9 |
12,371.2 |
| CURRENT LIABILITIES |
|
|
| Bonds issued |
71.7 |
209.2 |
| Financial debts |
709.7 |
412.2 |
| Trade payables |
140.7 |
218.3 |
| Other current liabilities |
526 |
462.1 |
| Total current liabilities |
1,448.1 |
1,301.8 |
| TOTAL EQUITY AND LIABILITIES |
21,231.3 |
21,930.3 |
Total assets
Total assets decreased by €699 million (3.2%) to €21,231.3 million as at 30 June 2024 compared to 31 December 2023. The decrease relates primarily to disposals of investment property (€692.7 million including €281.6 million of investment property classified as asset held for sale as at 31 December 2023).
Total liabilities
Total liabilities decreased by €874 million (6.4%) to €12,799 million as at 30 June 2024 compared to 31 December 2023, primarily due to a decrease in financial debts (€ 1,103.2 million).
Equity and EPRA NRV
Total equity increased by €175.0 million from €8,257.3 million as at 31 December 2023 to €8,432.3 million as at 30 June 2024. The movements of equity components were as follows:
- Decrease of translation reserve by €52.4 million, of revaluation reserve by €23.6 million, and of hedging reserve by € 14.3 million;
- Decrease of retained earnings by €111.8 million;
- Increase in perpetual notes by €38.2 million.
- Increase in non-controlling interests of €332.2 million.
EPRA NRV was €5,372 million as at 30 June 2024, representing a decrease of 3.5% compared to 31 December 2023. The decrease of EPRA NRV was driven by the above changes in the Group’s equity attributable to the owners, primarily a decrease of retained earnings and a decrease of translation, revaluation and hedging reserve.
| |
30 June 2024 |
31 December 2023 |
| |
|
|
| Equity attributable to the owners (NAV) |
5,372 |
5,568 |
| Diluted NAV |
5,372 |
5,568 |
| Fair value of financial instruments |
(115) |
(93) |
| Deferred tax on revaluations |
1,577 |
1,601 |
| Goodwill as a result of deferred tax |
(43) |
(43) |
| EPRA NRV (€ million) |
6,791 |
7,033 |
For disclosures regarding Alternative Performance Measures used in this press release please refer to our Half-year
Management Report 2024, chapters Glossary of terms, Key ratio reconciliations and EPRA performance; accessible at
http://cpipg.com/reports-presentations-en.
Unaudited documents will be available tonight at the following link:
http://www.cpipg.com/reports-presentations-en
Half-year 2024 unaudited financial statements
Half-year 2024 unaudited management report
For further information please contact:
Investor Relations
Moritz Mayer
Manager, Capital Markets
m.mayer@cpipg.com
For more on CPI Property Group, visit our website: www.cpipg.com
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