Argan : Recurring net income for 2022 up +6% to €119m
Annual
Results – Thursday
19 January
2023 –
17h45
Annual results 2022
-
Recurring net income for 2022 up +6% to €119m
-
Dividend 2022* up +15% to €3.0
per share
-
Expected rental income in 2023 up +10% to
€182m
Key figures of 2022:
Consolidated income
statement |
2022 |
2021 |
Changes |
Rental income |
€166m |
€157m |
+6% |
Net Recurring Income – group share |
€119m |
€112m |
+6% |
Net Recurring Income per share –
group share |
€5.2** |
€5.0 |
+5% |
|
|
|
|
Valuation indicators |
Exercice
2022 |
Exercice
2021 |
Variation |
Value of the portfolio
(excl.
duties) |
€3.94 Bn |
€3.75
Bn |
+5% |
NAV EPRA NTA per share |
€93 *** |
€92 |
+1% |
NAV EPRA NRV per share |
€105 *** |
€103 |
+2% |
|
|
|
|
|
|
Debt indicators |
Exercice
2022 |
Exercice
2021 |
Variation |
LTV EPRA
(excl.
duties) |
45% |
43% |
+200 bps |
LTV (incl. duties) |
43% |
41% |
+200 bps |
Cost of debt |
1.5% |
1.5% |
Stable |
2023 objectives illustrating the group's
confidence: Given the return to a 100% occupancy
rate and a rental market that is under-supplied (3.8% vacancy rate
in France), Argan anticipates the following
objectives:
Indicators |
Target 2023 |
Exercice 2022 |
Variationvs
2022 |
Rental income |
€182m |
€166m |
+10% |
Recurring net income |
€124m |
€119m |
+4% |
Dividend per
share |
More or equal to
€3.0* |
€3.0* |
|
Argan expect an integration in the EPRA index in
2023.
* Subject to approval during the Shareholders Annual Meeting of
23 March 2023** Calculated on the weighted average number of shares
of 22 827 845
*** Calculated on the number of shares at the
end 2022 of 22 951 290On January 16, 2023, Argan's
Management Board approved the 2022 consolidated financial
statements. The audit procedures of our statutory auditors on these
consolidated financial statements have been carried out. The
certification report will be issued after the specific checks have
been carried out.
Rising indicators
Recurring net income up +6%
to €119 m
Recurring net income (group share) is up 6% to €118.9
million at December 31, 2022, representing 72% of rental
income. Net income attributable to the Group amounted to €95.1
million, including a negative change in the fair value of the
portfolio of €32 million over the year 2022.
Premium assets valued at €4 billion, up
+5% over 12 months
The delivered portfolio (excluding properties
under development) amounted to 3,500,000
sq.m at December 31, 2022. Its valuation
amounts to €3.94 billion excluding transfer duties (€4.17 billion
including transfer duties), up +5% compared to December 31,
2021.
The valuation of the assets delivered at €3.94 billion shows a
capitalization rate of 4.45% excluding transfer duties (4.2%
including transfer duties), up slightly from 4.3% excluding
transfer duties at December 31, 2021.
The average residual lease term remains stable at 5.5 years
compared to 5.9 years at December 31, 2021.The weighted average age
is 10 years.
A return to 100% occupancy by 2023
The average occupancy rate of the portfolio is 99%,
stable compared to the end of December 2021. However, the
marketing of the Ferrières site (77) to Disney will enable the
Group to return to a level of 100% by the beginning of
2023.
€135m investment in 2023Argan plans to
deliver 5 logistics sites in 2023 for a total amount of €135
million, representing
100,000
sq.m.
Net debt to equity ratio of 45% and a
cost of debt of 1.5%
Gross financial debt stood at €1.98 billion and
the net debt stood at €1.8 bn. After taking into account residual
cash, net LTV (net financial debt/appraised value excluding
duties) was slightly up at 45% at December 31, 2022.
The debt is composed of 32% fixed-rate bonds,
27% fixed-rate amortizing loans, 33% hedged variable-rate
amortizing loans and 8% variable-rate amortizing loans. The
average interest rate on the debt at December 31, 2022 is stable
over one year at 1.5% and its maturity is 6.0 years.
NAV EPRA of
continuation
(NTA)
slightly increasing to
€93 per
share
The NRV (reconstitution NAV) is €104.8 per share
at December 31, 2022 (+2% over one year). The NTA
(continuation NAV) is € 92.9 per share at December 31, 2022 (+1%
over one year). The NAV (liquidation NAV) was €94.2 per
share at December 31, 2022 (+3% over one year).
This €1.10 increase in EPRA NTA NAV per
share compared to December 31, 2021 comes from net
earnings per share (+€5.0), the change in the value of the assets
(-€1.5), and the payment of the dividend in cash (-€0.9) and in
shares (-€1.5)
A new strategic planin
the face of the changing economic cycle
Faced with the change in the economic cycle in
2022, which has led to a sharp increase in interest rates,
Argan is presenting a new strategic plan that will enable
the group to continue to create value. This plan is
characterized by 2 major elements:
Strong
deleveraging:
- No more debt
issuance. In an economic cycle where the debt
is very expensive, Argan has decided to focus on a policy of
self-financing, which will enable the group to operate without
debt. We are targeting a net debt to EBITDA ratio of 7x in
the medium term (2030-time frame).
- We will finance new
developments by selling older warehouses.
This virtuous policy will create value because it will allow us to
sell assets at a low rate of return. These assets will be replaced
by new assets, developed at higher rates of return. In
addition, this policy will significantly rejuvenate the portfolio
and reduce the portfolio's CO2 emissions and energy
consumption.
- We are repaying amortizable
loans, for an amount of €100 million per year. This policy
will allow Argan to reduce its debt organically. The
absence of new borrowings coupled with the repayments allow us to
forecast a medium-term (2030-time frame) LTV target of between 25%
and 35%, at a capitalization rate of 4.5% and 6%
respectively.
Moderate growth, following strong rental
growth of 10% in 2023:
- Rental income growth will
be strong in 2023, with an increase of
+10% to €182 million. This growth
is the result of indexation (+4% on average on our leases), the
full-year effect of investments made in 2022 and 2023, and the
return to a 100% occupancy rate.
- Rental income growth will
be moderate thereafter. This is due to the fact that the
developments will be financed with the disposal of mature assets.
However, we anticipate annual rental income growth of +2%,
due to indexation and the higher return on developments compared to
disposals.
Carbon neutrality in 2030, in
terms of lighting and heating:
- Our new developments are
made with Autonom the warehouse that produces its own
green energy. This warehouse is already carbon neutral in
terms of lighting and heating.
- The CSR quality of our portfolio will improve considerably
thanks to the sale of old assets which will be replaced by Autonom
assets built to the best environmental standards.
- Banning of gas and installation of electric heat pumps
in the entire fleet by 2030. These heat pumps will enable
Argan to become carbon neutral by 2030 for the use of the
building.
Controlled impact of rising interest
rates,thanks to a controlled level of
indebtedness
Debt protected against rising interest
rates
Interest rates have risen
sharply in 2022.
However, this will not have a significant impact because our debt
is made up of:
- 59% fixed-rate debt
- 33% of our debt is at a variable
rate, hedged by instruments that are activated as soon as the
Euribor reaches 1.5%.
- Only 8% variable rate debt
The cost of debt
at 2.2%
in 2023 if the Euribor reaches
3%.
Euribor |
2023 |
2024 |
2025 |
2026 |
2.0% |
2.0% |
2.0% |
1.9% |
2.6% |
3.0% |
2.2% |
2.2% |
2.2% |
3.1% |
4.0% |
2.5% |
2.5% |
2.4% |
3.6% |
5.0% |
2.8% |
2.7% |
2.7% |
4.1% |
No need to refinance by
2026
Our mortgage debt (68% of our debt at
the end of 2022) has the advantage of being amortized each year and
does not require refinancing on the markets.Only our
bonded debt issued in 2021 will have to be refinanced in 2026, it
being specified that the repayment in July 2023 of our €130
million bonded debt issued in 2017 is already provisioned without
refinancing.
Debt far from
our covenants
Caprate |
2023 |
2024 |
2025 |
2026 |
4.5% |
45% |
42% |
39% |
36% |
5.0% |
50% |
47% |
43% |
40% |
5.5% |
55% |
52% |
48% |
44% |
6.0% |
60% |
56% |
52% |
48% |
About Argan
ARGAN is the only French real estate company
specialising in the DEVELOPMENT & RENTAL OF PREMIUM WAREHOUSES
listed on EURONEXT.As at 30 June 2022, ARGAN’s portfolio amounted
to 3.3 million sq.m, comprising approximately 100 warehouses
located exclusively in France, valued at €4.0 billion. ARGAN is
listed on Compartment A of Euronext Paris (ISIN FR0010481960 - ARG)
and is included in the CAC All-Share and IEIF SIIC France indices.
The company opted for the listed real estate investment companies
(SIICs) tax regime on 01 July 2007.www.argan.fr
Francis
Albertinelli – CFOTél : 01 47 47 05 46 E-mail :
contact@argan.frwww.argan.fr |
Aude Vayre – Press relationsTél : 06 14 64 15 65E-mail :
argan@citigatedewerogerson.com |
|
|
Consolidated net income
(IFRS)
In millions of € |
2021 |
2022 |
2020 |
Rental income |
156.8 |
166,1 |
142.4 |
Rebilling of rental charges and taxes |
25.7 |
28,6 |
25.8 |
Rental charges and taxes |
-27.7 |
-30,4 |
-27.3 |
Other property income (IFRS 16) |
3.1 |
3,2 |
2.8 |
Other property expenses |
-0.3 |
-0,4 |
-0.3 |
Net property income |
157.7 |
167,1 |
143.4 |
EBITDA (excl. acquisition costs for the « Cargo »
portfolio) |
147.1 |
150,5 |
132.2 |
Of which IFRS 16 impact |
3,1 |
2,8 |
|
Change in fair value of the portfolio |
544.6 |
-31.8 |
174.6 |
Change in fair value IFRS 16Other operational expenses |
-2.1- |
-1,2-0.5 |
- |
Income from disposals |
18.5 |
-0.2 |
|
EBITDA, after value adjustments (FV) |
708.2 |
116.8 |
316.1 |
Income from cash and equivalents Interest on loans and overdrafts
Interest on IFRS 16 lease liabilities Borrowing costs Change in
fair value of the derivative instrumentsChange in fair value of
interest rate hedge |
0.2-29.5-1.6-2.8-1.7- |
0.6-28.4-1.7-4.1-0.9-6.5 |
0.1-26.4-1.6-2.3-3.0-1.7 |
Income before tax |
672.7 |
75.8 |
281.2 |
Other financial expenses |
3.6 |
19.2 |
-2.0 |
Tax |
- |
- |
- |
Share of profit of equity-accounted companies |
- |
- |
-0.3 |
Consolidated net incomeConsolidated net
income – group shareDiluted Consolidated
net income per share (€) |
676.3668.129.7 |
94.995.14.2 |
278.9 |
Recurring net
income
In millions of € |
2021 |
2022 |
Consolidated net income |
676.3 |
94.9 |
Change in fair value of hedging instruments |
1.7 |
0.9 |
Change in fair value of the portfolio |
- 544.6 |
31.8 |
Income from disposals |
- 18.5 |
0.2 |
Other financial expenses |
- 3.6 |
- 19.2 |
Tax |
- |
- |
Share of profit of equity-accounted companies |
- |
- |
Early repayment penalties |
- |
6.5 |
Allocation of free shares |
|
3.8 |
Other operating expenses non-recurring |
- |
0.5 |
Impact of IFRS 16 |
0.6 |
0.1 |
Recurring net
Income |
111.9 |
119.5 |
Recurring net Income - group
share |
111.7 |
119.2 |
Recurring net income per share (€) |
5.0 |
5.2 |
NAV EPRA
|
Dec 31, 2021 |
Dec 31,
2022 |
|
NRV |
NTA |
NDV |
NRV |
NTA |
NDV |
Shareholders’ equity (in €m)Shareholders’
equity (in €/share) |
2,125.694.1 |
2,125.694.1 |
2,125.694.1 |
2,217.596.6 |
2,217.596.6 |
2,217.596.6 |
|
|
|
|
|
|
|
+ Fair value of financial instruments (in €m) |
3.2 |
3.2 |
- |
-30.8 |
-30.8 |
- |
- Goodwill in the balance sheet (in €m) |
- |
- 55.6 |
- 55.6 |
- |
- 55.6 |
- 55.6 |
+ Transfer taxes (in €m) |
186.9 |
- |
- |
219.7 |
- |
- |
|
|
|
|
|
|
|
= NAV (in €m) = NAV (in
€/share) |
2,315.7102.5 |
2,073.191.8 |
2,070.091.6 |
2,406.4104.8 |
2,131.192.9 |
2,161.994.2 |
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