Summit Germany has announced its interim results for the six months ended 30 June 2016. During the period, the company’s EPRA increased by 1.2% to €432.6m (31 December 2015: €427.5m). In terms of the company’s financial performance, net rental income increased by 31% to €28.9m (first half of 2015: €22.1m, full year 2015: €49.6m), whilst gross profit increased 28% year-on-year to €26.7m (first half of 2015: €20.9m, full year 2015: €45.8m). Funds from operations increased by 48% to €18.2m (first half of 2015: €12.3m, full year 2015: €28.8m), whilst profit before tax was €9.6m (first half of 2015: €2.3m loss, full year 2015: €70.9m). Net profit for the period was €8.2m (first half of 2015: €2.9m net loss, full year 2015: €63.5m) and earnings per share was 1.6 cents (first half of 2015: 0.8 cents loss, full year 2015: 13.3 cents)
The first six months of 2016, has seen the company complete acquisitions exceeding €40m of fully-let assets. The company says that these are well located and that they have made an immediate contribution to both net rent, and funds from operations, and have added interesting opportunities to enhance returns and unlock value through intensive asset management in the near future. The managers say that the refinancing of existing facilities, through new ten-year credit facilities totalling €73m, have allowed them to secure a fixed low interest rate over the long term underpinning the long term stable cash flow of the portfolio. The company says that it has cash on hand to finance further portfolio growth and the managers will continue to appraise prospective additions. The company made disposals of properties, during the period, that totaled €3.6m at book value. It says that a further €1.3m disposal has been made post the period end. The company has also entered into a new joint venture project to deliver 60 residential units in Berlin.
In terms of portfolio composition, the company says that the investment portfolio has a net market value of €772m (31 December 2015: €735m). It consists of 102 properties, with 887,000 square metres of lettable area, that has c 87% occupancy.
The company agreed €29m of new ten-year debt secured on the recent acquisitions from German banks at a fixed blended interest rate of 2.09% per annum. It also agreed a €40m debt facility to refinance a €24m loan of a property complex in Stuttgart, provided by two German lenders, for a ten-year term at a fixed interest of 2.25% per annum. In addition to this, the company says that a further €3.85m debt was secured, post the period end, to refinance an additional property within the Stuttgart complex. This was provided for a ten-year term at a fixed interest of 2.1% per annum.
In terms of outlook, the management says that it is particularly excited by the potential to extract significant value from their most recent acquisitions. They say that they remain very comfortable with the outlook for German commercial property and the potential to further expand the company’s portfolio.
Summit Germany sees improvement in profitability : SMTG