Deutsche EuroShop on track to meet 2015 full-year forecast

Listed German shopping centre investor Deutsche EuroShop said it is on track to meet its 2015 full-year earnings and revenue targets after reporting first-half results in line with forecasts.

The company boosted H1 net operating income (NOI) by 1.3% to €91.8 mln, on slightly higher revenues of €100.6 mln. Earnings before interest and tax (EBIT) remained virtually unchanged at €88.2 mln due to an exceptional charge. Without this effect, EBIT would have risen by €0.9 mln (1.1%).

Consolidated profit improved by 7.2% to €49.7 mln, taking earnings per share from €0.86 to €0.92, while funds from operations (FFO) improved by 4.6% from €1.09 to €1.14 per share.

‘These pleasing results are down to the continued strong performance in operating business and, in particular, the further year-on-year improvement in net finance costs,’ said CEO Wilhelm Wellner.

In a statement accompanying the results, Wellner said the transaction market for shopping centres remains ‘very active’ and is currently dominated by foreign investors. ‘In an environment of further price rises and growing investor risk appetite, we investigated a number of investment opportunities in the first half of the year. Ultimately our offer for one centre in Germany was unsuccessful. We are continuing to monitor the market closely but do not currently expect to be able to announce a new centre acquisition in the near future.’

Based on the first-half performance, Deutsche EuroShop said it is sticking to its full-year forecast of EBIT coming out at between €177 mln and €180 mln and revenue at between €201 mln and €204 mln. The company aims to pay a dividend of at least €1.35 per share.

Deutsche EuroShop has equity interests in 19 European shopping centres in Germany, Austria, Hungary and Poland with a combined market value of €3.9 bn. The portfolio includes the Main-Taunus-Zentrum near Frankfurt, the Altmarkt-Galerie in Dresden and the Galeria Baltycka in Gdansk.