Deutsche Annington doubles H1 profit, confirms forecast

Germany’s largest listed homeowner Deutsche Annington said it more than doubled its earnings in the first six months of 2015 following the integration of peer Gagfah earlier this year.

Consolidated funds from operations (FFO) jumped to €264.3 mln from €130.3 mln a year earlier, with FFO per share up at €0.74 compared with €0.54 in H1 2014.

Acquisitions of businesses including Gagfah, Dewag and Vitus have enabled Deutsche Annington to double its property portfolio in the past three years. The company, which owns 350,000 housing units valued at over €21 bn, said on Wednesday that it will integrate Gagfah more quickly than expected, pushing up its rental income to about €1.4 bn this year, up from €789.3 mln in 2014.

The earnings contribution made by the recent acquisition of the Südewo Group will not be reflected in Deutsche Annington's financial statements until the third quarter of 2015.

Based on its first-half performance, Deutsche Annington said full-year earnings would be in line with its recently increased forecast of between €560 mln and €580 mln.

‘Our solid key figures for the first six months confirm that we are on the right track,’ said Rolf Buch, CEO of Deutsche Annington. ‘We have established processes to integrate even large real estate portfolios. Consequently we are growing in Germany's attractive regions. At the same time, we are continually enhancing our operational business and investing vast sums in the modernisation of our properties. This allows us to secure stable returns for our investors and to improve the services we offer our customers at the same time.’

Deutsche Annington posted a bigger profit increase than its main German rivals, Deutsche Wohnen and LEG Immobilien, which both reported first-half FFO gains of around 25%.

The loan-to-value (LTV) ratio stood at 56.4% at end-June, on a par with the previous quarter (56.3 %), but dropped to 50.0 % in pro forma terms after the reporting date. Deutsche Annington said this means it has almost achieved its medium-term LTV target value of below 50%.