BFW LIEGENSCHAFTEN AG Press Release 16 March 2015
bfw liegenschaften ag achieved good operating results in fiscal year 2014 Frauenfeld, 16 March 2015 - bfw liegenschaften ag (SIX Swiss Exchange: BLIN) achieved good operating results in fiscal year 2014. Due to the sale of properties during the second half of 2013, net rental income for fiscal year 2014 amounted to CHF 16.3 million (previous year CHF 19.5 million) and was therefore in line with company expectations. This lower basis and no earnings from the sale of properties (2013: earnings of CHF 6.5 million) are reflected in the 2014 results. The Company achieved a solid EBIT of CHF 14.1 million (2013: CHF 22.2 milion). Excluding the fair value reflection of the interest rate swaps and receiver swaptions, which led to a significant negative effect (before taxes) of CHF -7.6 million in 2014 (2013: a positive effect of CHF +6.3 million), net earnings including changes in fair value of investment properties and deferred taxes amounted to a level of CHF 9.1 million (2013: CHF 15.1 million). As at 31 December 2014, balance sheet structure is very solid with an equity ratio of 48.9%. Net Asset Value per share was CHF 35.92 at balance sheet date. The Board of Directors proposes to the General Meeting of Shareholders on 22 April 2015 a payment in cash out of the capital contribution reserves of CHF 1.30 per registered share category "A" and CHF 0.13 per registered share category "B". Based on the closing price at 31 December 2014, this corresponds to an attractive yield of 4.13%. Details of results 2014
bfw liegenschaften ag achieved good operating results for financial year 2014. Considering the lower total real estate portfolio compared to the previous year period, the achieved operating results are in line with company expectations. The Company sold four properties during the second half of 2013 for a total consideration of CHF 59.6 million and with target rental income of approximately CHF 3.5 million. The lower basis of target rental income of CHF 17.4 million and no earnings from the sales of properties (2013: earnings of CHF 6.5 million) are reflected in the 2014 results.
As at 31 December 2014, the real estate portfolio amounted to CHF 346.6 million (2013: CHF 303.7 million). The change is mainly due to investments in new building projects (CHF 25.9 million) and in investment properties (CHF 2.4 million), the acquisition of a residential/commercial real estate in Zurich (CHF 11.0 million), as well as positive effects from changes in fair value of real estate investments (CHF 3.6 million).
Net rental income was CHF 16.3 million in 2014 (2013: CHF 19.5 million). The change is mainly a result of the lower target rental income due to the divestment of four properties during the second half of 2013. The residential/commercial property at Witikonerstrasse 311/311b in Zurich, which was acquired in September
2014, contributed to the rental income for four months with an amount of about TCHF 190. In 2014, net yield of investment properties was 3.7% and 4.3% without new building projects, respectively. The vacancy rate excluding new buildings was 4.7%.
In 2014, bfw liegenschaften ag did not sell any properties in contrast to the previous years. Therefore, no earnings from sales of properties were generated (2013: earnings of CHF 6.5 million), and operating income (rental income and earnings from sales of properties) stood at CHF 16.3 million (2013: CHF 26.1 million).
In 2014, direct operating expenses for investment properties decreased by TCHF 412 to CHF 3.4 million. This decline is mainly due to the sale of properties in 2013. As a percentage of net rental income, direct operating expenses were at 20.7% in 2014, compared to 19.5% in 2013.
In 2014, consulting expenses decreased by TCHF 70 to CHF 0.7 million. The costs for legal advice and communication increased slightly due to the full implementation of the "Minder-Initiative"(increase in total by TCHF 10), while expenses in conjunction with the payment from the capital contribution bfw liegenschaften ag ∙ Bahnhofstrasse 92 ∙ CH-8500 Frauenfeld
reserves decreased by TCHF 57 (in 2013, the payout was divided into a cash component and a share payment through treasury shares). Other consulting expenses remained unchanged or were reduced due to further cost saving measures. Administrative expenses increased by TCHF 276 to CHF 1.8 million, mainly due to an increase in the management fee as a result of the higher portfolio value as at year end 2014 and higher capital taxes. In 2014, the management fee for the service agreement with bfw vermögensverwaltung ag was CHF 1.5 million (2013: CHF 1.3 million).
The valuation of the investment portfolio by KPMG, the independent real estate evaluator, resulted in positive changes in the fair value of the real estate investments in an amount of CHF 3.6 million (2013: CHF
2.1 million). The increase in market values was mainly due to the positive development of the new building projects and a reduction in the discount rate for residential and residential/commercial properties applied by KPMG AG.
In 2014, EBIT was 14.1 million (2013: CHF 22.2 million). The change compared to the previous year is a result of the lower rental income and the difference of the proceeds from the sale of properties.
Net financial expenses were CHF 2.9 million in 2014 (2013: CHF 3.6 Mio.). The decline is a result of a lower average amount of mortgage liabilities and slightly lower average mortgage interest rates. The level of interest rates once again drastically declined by year-end 2014; therefore, the fair value reflection of the interest rate swaps and receiver swaptions led to a significant negative effect (before taxes) of CHF 7.6 million. In 2013, a positive effect of CHF 6.3 million (due to a higher interest rate level) was shown. In accordance with IAS 39, the interest rate swaps and receiver swaptions must be valued at the current fair value at each balance sheet date and changes in the fair value have to be reflected in the income statement. However, these fair value adjustments do not impact cash flow and do not affect the Company's operating effectiveness or its dividend policy at all.
Taking into account the fair value changes of the interest rate swaps and receiver swaptions, the earnings including effects from changes in fair value of the real estate investments and deferred taxes amounted to CHF 2.8 million in 2014 (2013: CHF 20.3 million). Excluding the fair value changes of the interest rate swaps and receiver swaptions, net earnings for 2014 were at a good level of CHF 9.1 million (2013: CHF
15.1 million). Net earnings per share excluding the changes in fair value were CHF 1.75 (2013: CHF 2.93).
As at 31 December 2014, the balance sheet total increased by about 6% to CHF 381.5 million compared to last year (31 December 2013: CHF 359.4 million), which was mainly a result of higher investments and a value increase of the real estate portfolio.
During the reporting period, new mortgage liabilities of CHF 21.5 million were taken on, thereof CHF 15.0 million were re-financed with fix mortgages of 7 years maturity. In addition, LIBOR-mortgages were re- financed into fix mortgages of 5 to 8 years maturity. In total, CHF 55.5 million were re-financed long-term compared to the previous year. Out of total mortgages of CHF 168.5 million, CHF 62.0 million are secured long-term through interest rate swaps and CHF 10.3 million with fix mortgages of 5 years and CHF 45.2 million with fix mortgages of 7 to 8 years, respectively. The average remaining life to maturity of mortgages as at 31 December 2014 was 4.3 years (31.12. 2013: 3.2 years).
Shareholders' equity was at CHF 186.5 million as at 31 December 2014, representing a solid equity ratio of
48.9%. Excluding the fair value changes in the interest rate swaps and receiver swaptions, the equity ratio was 51.4% as of balance sheet date.
The Net Asset Value was at CHF 35.92 as at 31 December 2014 (31.12.2013: CHF 36.57). The change compared to the previous year is attributable to the pay-out of capital contribution of CHF 6.2 million as of April 2014 and to an earnings contribution of CHF 2.8 million. Excluding the fair value changes in the interest rate swaps, the Net Asset Value was at CHF 37.80 (31.12.2013: CHF 37.25).
Reporting year 2014 was characterized by vital building activities. In total, bfw liegenschaften ag is working on four new building projects and two conversion projects. All projects are mainly focused on residential use and will help increase the portion of target rental income related to residential use from the current level of
74% to a significant higher level over the next three years.
The new building projects are running according to schedule. The project "Bellevue Park" in Kreuzlingen
with 52 city-apartments and 5 smaller commercial areas was finalised between late autumn 2014 and February
2015. Completion of the project "Seeleben" in Romanshorn with 36 apartments is planned for spring 2015. The
bfw liegenschaften ag ∙ Bahnhofstrasse 92 ∙ CH-8500 Frauenfeld Phone +41 848 820 410 ∙ Telefax +41 848 820 411 ∙ www.bfwliegenschaften.ch ∙ info@bfwliegenschaften.ch Seite 2 von 4other two projects in Glattfelden ("Zweidlen") with 24 apartments and in Grenchen ("Viaduktstrasse 9+11") with 28
apartments will be ready for use by summer and winter 2015, respectively.
The two conversion projects (Schaffhauserstrasse 210, Zurich and Freiestrasse 4, Weinfelden) are existing real estates, which were mainly used as commercial properties, so far. Start of construction of these two projects is planned during the first half of 2015, and completion of the projects is expected in summer (Schaffhauserstrasse) and by the end of 2016 (Freiestrasse). In both conversion projects together, 95 apartments are being built with an investment volume of about CHF 22 million in 2015/2016.
Outlook
The Swiss National Bank's decision to cancel the minimum exchange rate of CHF 1.20 to the Euro in January 2015, resulting in a severe appreciation of the Swiss Franc, is a big challenge for the Swiss economy. Nevertheless, bfw liegenschaften ag is confident that the real estate market, especially for residential properties, will remain attractive in the long-term with good rental income opportunities. Due to the Company's conversion and new building projects the target rental income will increase again in the period of 2015/2016
With its solid equity ratio and sufficient liquidity, bfw liegenschaften ag has the capability to further expand its portfolio with additional real estate investments. As before, the focus remains on high quality projects and attractive yields. Such a property was already acquired at the end of 2014, with transfer of ownerships as well as use and transfer of risk in January 2015. At Hönggerstrasse/Röschibachstrasse in Zurich, an attractive residential/commercial property was acquired for the purchase price of CHF 29.5 million.
The 2014 operating results are very solid and the outlook for bfw liegenschaften ag remains positive. Therefore, the Board of Directors maintains its long-term pay-out policy and proposes to the General Meeting of Shareholders on 22 April 2015 a payment in cash out of the capital contribution reserves of CHF
1.30 per registered share category "A" and CHF 0.13 per registered share category "B". Based on the
closing price at 31 December 2014, this corresponds to an attractive yield of 4.13%.
Contacts:
Beat Frischknecht Reto Borner
Chief Executive Officer Chief Financial Officer
+41 52 728 01 02 +41 52 728 01 06 beat.frischknecht@bfwliegenschaften.chreto.borner@bfwliegenschaften.ch
Agenda:
22 April 2015 Ordinary General Meeting of Shareholders
10 September 2015 Publication Results Half-Year 2014 and Half-Year Report 2014
Information on bfw liegenschaften ag
www.bfwliegenschaften.ch
bfw liegenschaften ag is a real-estate company with headquarters in Frauenfeld in the canton of Thurgau, Switzerland. It focuses on attractive residential properties in commuting areas close to business centres in the German-speaking part of
Switzerland. The registered A shares of bfw liegenschaften ag are listed on the SIX Swiss Exchange (Symbol BLIN,
Securities Number 1820611, ISIN Number CH 001 820 6117).
bfw liegenschaften ag ∙ Bahnhofstrasse 92 ∙ CH-8500 Frauenfeld Phone +41 848 820 410 ∙ Telefax +41 848 820 411 ∙ www.bfwliegenschaften.ch ∙ info@bfwliegenschaften.ch Seite 3 von 4 Key Figures Income Statement 2014 2013in TCHF
Rental income 16 349 19 514
Total earnings from sale of properties 0 6 545
Total operating income 16 349 26 059Direct operating expenses for investment properties - 3 391 - 3 803
Consulting expenses - 662 - 732
Administrative expenses - 1 759 - 1 483
Total operating expenses - 5 812 - 6 018 Changes in fair value of real estate investments 3 607 2 142 EBIT 14 143 22 183Financial income 56 49
Financial expenses - 2 967 - 3 684
Amortisation interest rate swaps - 227 - 227
Valuation of the fair value of interest rate swaps -7 552 6 274
Taxes - 621 - 4 307
Earnings incl. effects from changes in fair value of real estate investments / deferred taxes 2 833 20 288 Earnings excl. effects from changes in fair value of real estate investments / deferred taxes 573 18 481 Earnings excl. fair value adjustments of interest rate swaps / deferred taxes 9 100 15 081 Balance sheet as at 31 December 31.12.2014 31.12.2013in TCHF
Total assets 381 482 359 434
Total liabilities 195 011 169 565
Equity 186 471 189 869
Equity ratio 48.9% 52.8%
Equity excl. fair value adjustments of interest rate swaps / deferred taxes 196 247 193 376
Equity ratio excl. fair value adjustments of interest rate swaps / deferred taxes 51.4% 53.8%
Net Asset Value (NAV) in CHF 35.92 36.57
Net Asset Value excl. fair value adjustments of interest rate swaps / deferred taxes in CHF
37.80 37.25
Total investment portfolio 31.12.2014 31.12.2013Total value of real estate portfolio in TCHF 346 602 303 733
Total number of investment properties 41 40
Total number of new building projects 4 4
Yield net 3.7% 5.2% Yield net excl. new building projects 4.3% 5.5%
Vacancy rate 5.0% 3.6% Vacancy rate excl. new building projects 4.7% n/a Ø interest rate excl. amortisation of interest rate swaps 1.9% 2.2%
Ø interest rate incl. amortisation of interest rate swaps 2.0% 2.4% Ø remaining life to maturity of mortgages 4.3 years 3.2 years
The Annual Report 2014 of bfw liegenschaften ag (German version) is available at www.bfwliegenschaften.ch-
Investor Relations - Financial Reports. Direct link http://www.bfwliegenschaften.ch/index.php?id=2136
bfw liegenschaften ag ∙ Bahnhofstrasse 92 ∙ CH-8500 Frauenfeld Phone +41 848 820 410 ∙ Telefax +41 848 820 411 ∙ www.bfwliegenschaften.ch ∙ info@bfwliegenschaften.ch Seite 4 von 4|
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