Rental income: €98.6 million, up 2.9%
like-for-like
EPRA earnings: €49.7 million (down
1.8%)
Attributable net profit: €378.7
million
Property portfolio value: €6,144 million (up
7.1%)
EPRA NNNAV: €73.5 per share (up
11.0%)
Regulatory News:
The interim consolidated financial statements for the six months
ended 30 June 2017 were approved by the Board of Directors of
Société Foncière Lyonnaise (Paris:FLY) on 27 July 2017, at a
meeting chaired by Juan-Jose Brugera.
First-half business indicators were robust, thanks to the high
portfolio occupancy rate, while the period also saw gains in the
portfolio's appraisal value and the Company's net asset value.
The auditors have completed their review of the interim
financial statements.
Consolidated data (€ millions)
H1 2017 H1 2016
Change Rental income 98.6 102.0
-3.3% Adjusted operating profit* 82.5 86.4 -4.5% Attributable net
profit 378.7 309.8 +22.3% EPRA earnings 49.7 50.6
-1.8% * Operating profit before disposals and fair value
adjustments
30/06/2017 31/12/2016
Change Attributable equity 3,455 3,123 +10.6% Consolidated
portfolio value excluding transfer costs 6,144 5,736 +7.1%
Consolidated portfolio value including transfer costs 6,523
6,092 +7.1% EPRA NNNAV 3,421 3,082 +11.0% EPRA NNNAV
per share €73.5 €66.2
Results: robust business indicators
- Rental income for the period amounted to €98.6 million, down
by a modest €3.3 million from the €102.0 million reported in
first-half 2016.
- On a like-for-like basis (excluding all
changes in the portfolio affecting period-on-period comparisons),
rental income was €2.7 million higher, a 2.9% increase that was
mainly attributable to the new leases signed in 2016.
- Changes in assets under redevelopment
between the two periods had a €4.3 million negative impact on
rental income, with several floors of offices in the Cézanne
Saint-Honoré complex and other properties taken off the market for
extensive renovation after tenants moved out in 2016.
- The impact was partly offset by lease
termination penalties received from tenants, which added a net €0.5
million to rental income for first-half 2017 compared with €2.2
million in the year-earlier period.
- Operating profit before disposal gains and losses and fair
value adjustments to investment properties amounted to €82.5
million in first-half 2017 versus €86.4 million in the year-earlier
period.
- The portfolio’s appraisal value as of 30 June 2017 was 7.1%
higher on a comparable basis than as of 31 December 2016. The
increase led to the recognition of positive fair value adjustments
to investment properties of €382.6 million at 30 June 2017
versus positive adjustments of €285.8 million at 30 June
2016.
- Net finance costs amounted to €21.2 million in first-half 2017
compared with €25.0 million in the year-earlier period, a saving of
€3.9 million that primarily reflected the Group's lower average
cost of debt.
- After taking into account these key items, the Group reported
attributable net profit for the period of €378.7 million
versus €309.8 million in first-half 2016. EPRA earnings came to
€49.7 million in first-half 2017 compared with €50.6 million in the
year-earlier period.
First-half 2017 Business Review
Rental operations
In a resilient rental market shaped by stable volumes in the
Paris region compared with 2016 and a shortage of high quality
properties in the capital, during first-half 2017 SFL signed leases
on some 12,000 sq.m. on good terms.
The new leases were signed at an average nominal rent of €678
per square metre, corresponding to an effective rent of €585 per
square metre.
The occupancy rate for revenue-generating properties remained
high, standing at 95.5% as of 30 June 2017 compared with
97.0% as of 31 December 2016. The remaining vacant units are
located mainly in the Cézanne Saint-Honoré, Washington Plaza and
Issy-les-Moulineaux properties.
Development operations
Capital expenditure for first-half 2017 amounted to €12.5
million and mainly concerned the renovation of vacated floors in
existing buildings and preliminary work on the Louvre Saint-Honoré
and 112 Emile Zola (SMA) development projects.
Portfolio operations
On 13 January 2017, SFL entered into a €165-million deal to
acquire SMA's historical headquarters building on Avenue Emile Zola
in the 15th arrondissement of Paris. The 21,000-sq.m. property will
be redeveloped to create a major new business centre in the west of
the capital. Contracts will be exchanged when SMA moves to its new
headquarters in the fourth quarter of 2017 (for more details, see
the press release dated 16 January 2017).
No properties were divested in the first half of 2017. However,
as part of the Group's portfolio management strategy, the In/Out
property in Boulogne-Billancourt was put up for sale during the
period.
As of the period-end a buyer had been found and a sale agreement
was signed on 25 July. The sale of this asset to Primonial is due
to be finalised during the second half of the year.
Financing: historically low average borrowing costs
Net debt at 30 June 2017 amounted to €1,949 million, compared
with €1,931 million at 31 December 2016, representing a
loan-to-value ratio of 29.9%. At that date, the average cost of
debt after hedging was 1.9% and the average maturity was 4.1
years.
In June 2017, two new bilateral revolving credit facilities were
obtained for periods of six and seven years respectively,
representing a total borrowing capacity of €175 million.
As of 30 June 2017, SFL had €675 million in undrawn lines of
credit.
Net Asset Value
The consolidated market value of the portfolio at 30 June 2017
was €6,144 million excluding transfer costs, an increase of 7.1%
from €5,736 million at 31 December 2016 that was primarily due to
further tightening of Paris property yields.
The average EPRA topped-up net investment yield (NIY) stood at
3.3% as of 30 June 2017, compared with 3.6% as of 31 December
2016.
EPRA NNNAV stood at €3,421 million or €73.5 per share at 30 June
2017, an increase of 11.0% compared to €66.2 per share at 31
December 2016.
Alternative Performance Indicators (APIs)
API EPRA earnings
€ millions H1 2017 H1 2016
Attributable net profit 378.7
309.8 Less: Profit (loss) on asset disposals - - Fair value
adjustments to investment properties (382.6) (285.8) Fair value
adjustments to financial instruments, discounting adjustments to
debt and related costs 0.0 0.7 Tax on the above items 20.1 5.5
Non-controlling interests in the above items 33.5
20.4
EPRA earnings 49.7 50.6
API EPRA NNNAV
€ millions 30/06/2017 31/12/2016
Attributable equity 3,455 3,123
Treasury shares 12 14 Unrealised capital gains 17 16 Fair value
adjustments to fixed rate debt (63) (71)
EPRA
NNNAV 3,421 3,082
API Net debt
€ millions 30/06/2017 31/12/2016
Long-term borrowings and derivative instruments 1,679
1,620 Short-term borrowings and other interest-bearing debt
371 389
Debt in the consolidated balance sheet
2,050 2,009 Less: Current account advances
(liabilities) (63) (63) Accrued interest and deferred debt
arranging fees (11) 6 Cash and cash equivalents (27)
(20)
Net debt 1,949 1,931
More information is available at
www.fonciere-lyonnaise.com
About SFL
Leader on the prime segment of the Parisian tertiary real estate
market, Société Foncière Lyonnaise stands out for the quality of
its property portfolio, which is valued at €6.1 billion and is
concentrated on the Central Business District of Paris
(#cloud.paris, Edouard VII, Washington Plaza, etc.), and
for the quality of its client portfolio, which is composed of
prestigious companies in the consulting, media, digital, luxury,
finance and insurance sectors.
Stock market: Euronext Paris Compartment A – Euronext Paris ISIN
FR0000033409 – Bloomberg: FLY FP – Reuters: FLYP PA
S&P rating: BBB with a positive outlook
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170727006134/en/
SFLThomas Fareng, +33 (0)1 42 97 27
00t.fareng@fonciere-lyonnaise.comorGalivel &
AssociésCarol Galivel/Doriane Fougères, +33 (0)1 41 05 02
02galivel@galivel.com
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