Rental income: €204.5m (up 7.5%
like-for-like) EPRA earnings: €108.0m (up 16.9%), or €2.52
per share (up 22.8%) Attributable net profit: €143.4m
Portfolio value (excluding transfer costs): €8,246m (up 2.3%
like-for-like) EPRA NTA: €107.4 per share (down 0.5%)
EPRA NDV: €108.3 per share (up 6.1%)
Regulatory News:
The consolidated financial statements for the year ended 31
December 2022 were approved by the Board of Directors of Société
Foncière Lyonnaise (Paris:FLY) on 14 February 2023, at its meeting
chaired by Pere Viňolas Serra. These financial statements show
significant increases in business indicators, appraisal values and
the Company’s NAV, with EPRA earnings per share up 22.8% and rental
income up 7.5% like-for-like. The auditors have completed their
audit of the annual financial statements and are in the process of
issuing their report.
Consolidated data (€ millions)
2022
2021
Change
Rental income
204.5
174.6
+17.1%
Adjusted operating profit*
171.8
134.2
+27.9%
Attributable net profit
143.4
292.0
-50.9%
EPRA earnings
108.0
92.4
+16.9%
per share
€2.52
€2.05
+22.8%
* Operating profit before disposal gains
and losses and fair value adjustments.
31/12/2022
31/12/2021
Change
Attributable equity
4,379
4,387
-0.2%
Consolidated portfolio value excluding
transfer costs
8,246
7,606
+8.4%
Consolidated portfolio value including
transfer costs
8,823
8,138
+8.4%
EPRA NTA
4,603
4,627
-0.5%
per share
€107.4
€107.9
-0.5%
EPRA NDV
4,644
4,375
+6.1%
+6.1%
per share
€108.3
€102.1
Sharp improvement in earnings
Rental income up 7.5%
like-for-like
Consolidated rental income for 2022 amounted to €204.5 million,
up by a sharp €29.9 million or 17.1% from the €174.6 million
reported the year before:
- On a like-for-like basis (excluding all
changes in the portfolio affecting period-on-period comparisons),
rental income was €11.9 million higher (up 7.5%). Application
of rent escalation clauses contributed €2.2 million to the
increase. However, the main growth driver was the improved
occupancy rate for revenue-generating units, following the
signature of new leases in 2021 and 2022 (with longstanding tenants
or new clients such as TP Icap, Simon Kuchers, Atalante and
Greystar), leading to significant increases in rental income from
the Edouard VII, 103 Grenelle and Washington Plaza buildings in
particular.
- Rental income from units being
redeveloped or renovated in the periods concerned was up by €6.9
million, reflecting the full-year contribution of the
redeveloped 83 Marceau building which was delivered in the second
half of 2021, the contribution over the latter part of the year of
the redeveloped Biome building, fully pre-let to La Banque Postale
and SFIL, which was delivered in July 2022, and the signature of
leases on several floors refurbished in 2021 and 2022, mainly in
the Cézanne Saint-Honoré (Wendel, LRT and Lincoln International)
and Washington Plaza buildings (Advancy, Puig, etc.). Conversely,
certain retail units in the Galerie des Champs-Elysées (H&M)
and all the office space in the Rives de Seine building (Natixis),
which is to be redeveloped, were vacated during the year, leading
to a loss of €7.4 million in rental income for the year.
- Lastly, the acquisition of the Pasteur
building in April 2022 generated a significant increase in rental
income which more than offset the income lost on disposal of
the 112 Wagram and 9 Percier buildings at the beginning of 2021.
All told, the net impact of these changes in the portfolio on
rental income for 2022 was a positive €11.2 million.
Operating profit before disposal gains and losses and fair value
adjustments to investment property came to €171.8 million in 2022,
versus €134.2 million the year before.
Portfolio appraisal value shows strong
resilience despite the uncertain environment
The portfolio’s appraisal value rose by 8.4% as reported and
2.3% like-for-like versus 31 December 2021. The increase led to the
recognition of positive fair value adjustments to investment
property of €38.6 million in 2022 compared with €255.2 million in
2021.
Net profit
Net finance costs stood at €31.6 million in 2022, versus €30.2
million in 2021, an increase of €1.4 million. Excluding
non-recurring items, the increase was €3.8 million, reflecting the
impact on recurring finance costs of the increase in average debt
following the acquisition of the Pasteur building.
After taking account of these key items, EPRA earnings totalled
€108.0 million in 2022, versus €92.4 million the year before. EPRA
earnings per share stood at €2.52 in 2022, up by a strong 22.8%
from €2.05 in 2021. Attributable net profit for 2022 came in at
€143.4 million, versus €292.0 million in 2021.
Occupancy rate at an all-time high
Letting activity remained brisk, with 100%
of the office space in the Biome building pre-let, and a record
physical occupancy rate of 99.5%
Despite the sharp deterioration in the geopolitical and economic
situation and contrary to the trends observed in other markets in
the Paris region, the Paris commercial property rental market was
very active in 2022, particularly for high quality properties in
prime locations. In this environment, the Group signed leases on
some 47,000 sq.m. of mainly office space during the year. Lease
deals mainly included:
- Biome, with the complex’s 24,000 sq.m. of
office space pre-let primarily to La Banque Postale and SFIL; this
was a benchmark transaction among the over-20,000 sq.m. lease deals
signed in the Paris region during the year; - 103 Grenelle, with
three new leases signed on a total of 3,400 sq.m. (Atalante,
Promontoria, Netgem); - new office leases in the #cloud.paris,
Washington Plaza, Edouard VII, 176 Charles de Gaulle, 83 Marceau
and Cézanne Saint-Honoré properties, for the remaining; - around
8,600 sq.m. of retail units.
The average nominal rent on these leases rose to €716 per sq.m.,
corresponding to an effective rent of €601 per sq.m., for an
average non-cancellable term of 7.5 years. These lease terms attest
to the attractiveness of the Group’s properties.
The physical occupancy rate for revenue-generating properties at
31 December 2022 was a record 99.5% (compared with 98.0% at 31
December 2021). The EPRA vacancy rate was 0.6% (versus 1.7% at 31
December 2021).
A pipeline concentrated around large-scale operations with
strong value drivers
Properties undergoing redevelopment at 31 December 2022
represented 14% of the total portfolio. Of the total surface area
undergoing redevelopment, around 75% concerned two major
projects:
- Retail space in the Louvre Saint-Honoré
building, which is scheduled for delivery in late 2023 under a
turnkey lease on over 20,000 sq.m signed with the Richement group
(Cartier). Work on the project was pursued during the year
according to schedule.
- The Rives de Seine office building on Quai
de la Râpée in Paris (approximately 23,000 sq.m.), which was
vacated by the tenant on 30 September 2022 and will be extensively
redeveloped. The building permit application has been filed and
site clearance and asbestos removal work has begun, with delivery
scheduled for first-half 2026.
The Biome office complex on Avenue Emile Zola (approximately
25,000 sq.m. in total) was delivered on 19 July 2022 following a
major redevelopment programme. The building is fully let.
Capitalised work carried out in 2022 amounted to €113.0 million,
including the above projects for a total of €74.8 million and
large-scale renovations of complete floors in the Washington Plaza
and Cézanne Saint-Honoré buildings.
Acquisitions/disposals: a strategy of rotating assets to
refocus on Paris and increase the average size of SFL's
assets
On 25 April 2022, SFL acquired the Pasteur building from
Primonial REIM France for €484 million (excluding transfer costs
paid by the vendor). The 40,000 sq.m. building is located at 91-93
boulevard Pasteur in the 15th arrondissement of Paris, next to
Montparnasse train station. It is currently let to Amundi under a
12-year non-cancellable lease.
On 30 May 2022, SFL sold the 6,300 sq.m. Le Vaisseau building in
Issy-les-Moulineaux to the Institut Catholique de Lille for €27
million excluding transfer costs.
Disciplined financing strategy with a strong environmental
focus
In an environment shaped by a steep rise in interest rates, the
Group carried out a number of operations during the year, including
mainly:
- Issuance of two €99 million taps on the
0.5% bonds due 2028 and the 1.5% bonds due 2027. - Signature with
Caixabank and Banco Sabadell of two new five-year revolving lines
of credit, in the amounts of €100 million and €50 million
respectively. - Rollover of the Cadif €175 million three-year
revolving credit line expiring in June 2023 and the BECM €150
million five-year revolving credit line expiring in July 2023 with
an increase in the amount of the facility to €200 million. -
Signature on 9 December of a five-year €300 million term loan with
a pool of five banks.
A vast majority of these new banking facilities (for €725
million) are loans linked to environmental performance criteria for
which the interest rate depends in part on the Group’s progress in
reducing its carbon footprint. In addition, in early 2022, SFL
converted all of its bond issues – representing an outstanding
amount of €1,698 million at 31 December 2022 – to green bonds.
SFL also set up new interest rate hedges on a total notional
amount of €600 million.
These transactions have strengthened SFL’s liquidity position
and extended the average maturity of the Group's debt as part of
its proactive balance sheet management strategy. The funds will be
used for general corporate purposes.
Net debt at 31 December 2022 amounted to €2,438 million
(compared with €1,792 million at 31 December 2021), representing a
loan-to-value ratio of 27.6%. This increase mainly reflects the
financing of the Pasteur building. At 31 December 2022, the average
cost of debt after hedging was 1.7% and the average maturity was
4.3 years. The interest coverage ratio at the same date stood at
5.5x.
Lastly, at 31 December 2022, SFL had access to €1,240 million in
undrawn lines of credit.
Net asset value: EPRA NDV per share up 6.1% at €108.3 after
payment of an exceptionally high dividend of €4.20 in April
2022
The consolidated appraisal value of the portfolio at 31 December
2022 was €8,246 million excluding transfer costs. The increase of
8.4% from €7,606 million at 31 December 2021 primarily reflected
the acquisition of the Pasteur building. On a comparable portfolio
basis, the increase was 2.3%, led primarily by the higher appraisal
values of properties undergoing redevelopment.
The average EPRA topped-up Net Initial Yield (NIY) was 3.1% at
31 December 2022, up slightly from 2.9% at the previous
year-end.
At 31 December 2022, EPRA Net Tangible Assets (NTA) stood at
€107.4 per share (€4,603 million, a decline of 0.5% over the year)
and EPRA Net Disposal Value (NDV) was €108.3 per share (€4,644
million, up 6.1% over the year), after payment of an exceptionally
high dividend of €4.20 during the year.
Dividend policy
At the Annual General Meeting to be held on 13 April 2023, the
Board of Directors will recommend paying a dividend of €4.20 per
share.
EPRA indicators
2022
2021
EPRA Earnings (€m)
108.0
92.4
/share
€2.52
€2.05
EPRA Cost Ratio (including vacancy
costs)
15.3%
16.2%
EPRA Cost Ratio (excluding vacancy
costs)
14.2%
14.4%
31/12/2022
31/12/2021
EPRA NRV (€m)
5,104
5,084
/share
€119.1
€118.6
EPRA NTA* (€m)
4,603
4,627
/share
€107.4
€107.9
EPRA NDV (€m)
4,644
4,375
/share
€108.3
€102.1
EPRA Net Initial Yield (NIY)
2.4%
2.5%
EPRA topped-up NIY
3.1%
2.9%
EPRA Vacancy Rate
0.6%
1.7%
* Transfer costs are included at their amount as determined in
accordance with IFRS (i.e., 0).
Alternative Performance Indicators (APIs)
EPRA Earnings API
€ millions
2022
2021
Attributable net profit
143.4
292.0
Less:
Fair value adjustments to investment
property
(38.6)
(255.2)
Profit (loss) on asset disposals
0.4
(0.1)
Non-recurring costs relating to
disposals
-
8.1
Fair value adjustments to financial
instruments, discounting adjustments to debt and related costs
0.2
2.6
Expenses related to asset
contributions
-
2.0
Tax on the above items
(9.0)
(9.0)
Non-controlling interests in the above
items
11.6
52.0
EPRA earnings
108.0
92.4
Average number of shares (thousands)
42,865
45,002
EPRA earnings per share
€2.52
€2.05
EPRA NRV/NTA/NDV APIs:
€ millions
31/12/2022
31/12/2021
Attributable equity
4,379
4,387
Treasury shares
2
2
Fair value adjustments to owner-occupied
property
35
34
Unrealised capital gains on intangible
assets
4
4
Elimination of financial instruments at
fair value
(15)
(4)
Elimination of deferred taxes
203
211
Transfer costs
496
451
EPRA NRV (Net Reinstatement
Value)
5,104
5,084
Elimination of intangible assets
(2)
(2)
Elimination of unrealised gains on
intangible assets
(4)
(4)
Elimination of transfer costs*
(496)
(451)
EPRA NTA (Net Tangible Assets)
4,603
4,627
Intangible assets
2
2
Financial instruments at fair value
15
4
Fixed-rate debt at fair value
228
(47)
Deferred taxes
(203)
(211)
EPRA NDV (Net Disposal Value)
4,644
4,375
* Transfer costs are included at their amount as determined in
accordance with IFRS (i.e., 0).
Net debt API
€ millions
31/12/2022
31/12/2021
Long-term borrowings and derivative
instruments
2,074
1,489
Short-term borrowings and other
interest-bearing debt
415
413
Debt in the consolidated statement of
financial position
2,488
1,902
Less:
Current account advances (liabilities)
0
0
Accrued interest, deferred recognition of
debt arranging fees, negative fair value adjustments to financial
instruments
19
5
Cash and cash equivalents
(69)
(115)
Net debt
2,438
1,792
More information is available at
www.fonciere-lyonnaise.com/en/publications/results
About SFL
Leader in the prime segment of the Parisian commercial real
estate market, Société Foncière Lyonnaise stands out for the
quality of its property portfolio, which is valued at €8.2 billion
and is focused 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. As France’s oldest property company, SFL
demonstrates year after year an unwavering commitment to its
strategy focused on creating a high value in use for users and,
ultimately, substantial appraisal values for its properties.
Stock market: Euronext Paris Compartment A – Euronext Paris ISIN
FR0000033409 – Bloomberg: FLY FP – Reuters: FLYP PA
S&P rating: BBB+ stable outlook
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230214005762/en/
SFL - Thomas Fareng - T +33 (0)1 42 97 27 00 -
t.fareng@fonciere-lyonnaise.com
www.fonciere-lyonnaise.com
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