DIC Asset sees profit surge 36% in 2013

German listed property group DIC Asset reported consolidated profit soared 36% to €16 mln in 2013, up from €11.8 mln a year before.

In a presentation of its full-year results, the company said it met its Funds From Operation forecast with FFO reaching €45.9 mln in 2013, up €1 mln on the same period the prior year. This was largely a result of stable rental income, higher fees from real estate management and lower interest expenses.

'As the outlook for 2014 is positive, shareholders will participate in the company's performance with a high, consistent year-on-year dividend of €0.35 per share,' the company added.

Gross rental income remained roughly stable at €125.2 mln, versus €126.5 mln in 2012. Portfolio acquisitions in November 2013 offset the expected reduction in rental income that followed various property sales during the year.

At the end of 2013, net asset value (NAV) amounted to €862.4 mln, up €177 mln or 26% from the previous year. Over the past 12 months, DIC said it strengthened its financal structure as it restructured €960 mln in long-term bank loans. As a result, the maturity structure of the financing portfolio improved to 4.5 years as per 31 December 2013 (31 Dec 2012: 3.2 years), with an average interest rate of 4.1%.

The loan-to-value ratio based on the portfolio's market value improved to 66.9% from over 68% the previous year. In absolute terms, financial debt increased year-on-year to €1.72 bn (31 Dec 2012: €1.46 bn), mainly due to acquisitions and the expansion of the corporate bond issue.

DIC Asset said it expects further earnings growth in 2014 on the back of continuing portfolio optimisations and sustained growth in the funds business. A higher volume of disposals, to the tune of €150 mln, is set to significantly reduce the company's debt ratio, but lease expiries and a more challenging letting environment mean the company does not expect to improve the vacancy rate in 2014.

Frankfurt-based DIC is forecasting rental income of between €145 mln and €147 mln in 2014, with FFO between €47 mln and €49 mln.