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EIFF - Societe De La Tour Eiffel SA News Story

€29.2 -0.1  -0.3%

Last Trade - 18/01/22

Mid Cap
Market Cap £406.2m
Enterprise Value £1.02bn
Revenue £104.7m
Position in Universe 346th / 849

Société de la Tour Eiffel: 2013 half-year results

Wed 24th July, 2013 4:36pm

2013 Half-year results

LTV reduction to 48.9% pro-forma at 30 June 2013

The 2013 half-year accounts were adopted by the Board of Directors at its meeting of 24 July 2013
under the chairmanship of Mark Inch.

Consolidated figures 
                           In EURm                                            H1 2013                                         H1 2012                            
 Rents (*)                                                                       32.8                                            35.0                            
 LFL Growth                                                                      5.2%                                             n/a                            
 EPRA recurring operating result                                                 25.5                                            27.2                            
 % rents                                                                        77.9%                                           77.8%                            
 EPRA earnings                                                                   14.7                                            16.6                            
 IFRS operating result                                                            0.5                                            27.2                            
 IFRS net result (Group share)                                                   -0.7                                            16.3                            
 Of which fair value adjustments and proceeds from disposals                    -13.8                                             0.6                            
 Cash flow                                                                       14.0                                            16.7                            
 In EUR / share (**)                                                              2.3                                             2.8                            
 Portfolio valuation                                                            808.6                                           955.3                            
                                                                           30/06/2013                                      31/12/2012                            
 Net LTV                                                                        52.1%                                           55.9%                            
 EPRA financial occupancy rate                                                  91.8%                                           91.6%                            
 EPRA NNNAV (In EUR / share (**))                                                59.5                                            62.2                            
 Portfolio valuation                                                            808.6                                           915.4                            
 Rents LFL growth                                                                5.2%                                            4.5%                            
 (*) disposals amounting to EUR 51.3m in 2012 and EUR 88.9m during first half 2013                                                                               
 (**) number of shares: 6 227 218 as at 30 June 2013 and 5 919 688 as at 30 June 2012, i.e. a 5.2% dilution                                                      
NB: LTV assuming the completion of disposals contracted as at 30 June 2013 amounts to 48.9%

1 - Strategic plan well in hand

Disposals completed at a steady pace and in excess of appraisal value

Disposals completed in line with the new strategy based on an improved debt ratio and refocusing
of the portfolio on Parisian offices (which will represent 60% of the total portfolio vs 49% as at
31.12.12) have enabled a rapid reduction in the Loan-to-Value ratio (LTV) from 55.9% to 52.2%. The
Company's portfolio now consists of 85% offices.

Selected disposals of non-core assets were achieved on satisfactory terms despite continuing
sluggish market conditions: EUR 88.9m of sales completed during the first half (net sales price)
compared to a standing valuation of EUR 86.9m as at 31 December 2012, i.e. 2.4% in excess of

Furthermore, initial sales contracts have been signed on additional such assets for EUR 57.6m
giving a total of pro forma disposals as at 30 June of EUR 146.5m. Final completion of these
transactions is expected during the second half 2013 after which the Group LTV as at 30 June would
represent 48.9%.

Sustained rental performance on a like-for-like basis 

The intentional reduction in the property portfolio mechanically triggers a corresponding
reduction in rents invoiced, -6.4% for H1 2013 vs H1 2012.  However, this reduction is less
pronounced than  the portfolio value, partly due to the timing of the transactions during the year
but also to the excellent overall rental stability on a like-for-like basis (+5.2%), which in turn
demonstrates the Company's occupancy rate performance.

Successful leasing of Eiffel O² Montrouge

The Company's latest 5,200 m² office development delivered in May was successfully prelet to La
Poste group on a 6-year closed lease for an annual rent of EUR 1.8m. 

Operating costs under control

Elsewhere, during a period of change, regular operating costs (EPRA basis) are under control.  The
EPRA net recurring operating result is lower by 6.3% at EUR 25.5m compared to EUR 27.2m for H1
2012, demonstrating, that despite the sales and the reduction in portfolio size, the margin has
slightly improved (77.9% against 77.8% for H1 2012). The cost control policy initiated during the
first half of the year continues to prove fruitful with the generalization of tender procedures
and implementation of day-to-day controls. The full impact is anticipated for the second half of
2014 when it is expected that a run rate of EUR 3m of annual savings will be achieved compared to
2012 cost base. 

2 - Impact on the half-year results

Profit and Loss account

According to EPRA standards, the reduction in operating costs (-6.3%) is in line with rents 
(-6.4%) implying a very slight improvement in the margin in terms of operating result amounting to
EUR 25.5m, for a net EPRA earnings of EUR 14.7m.

According to IFRS, non-recurring costs (EUR 1.3m) and asset depreciation (EUR 24.5m) are partly
compensated by an uplift in the value of hedging instruments (EUR 8.9m) and capital gains on
disposals (0,9 MEUR). The operating result therefore amounts to EUR 0.5m for a net result of -EUR

Balance sheet

The outcome resulting from disposals is a further improvement in debt ratios and in particular LTV
which reduces from 55.9% to 52.1% between 31 December 2012 and 30 June 2013. Assuming the
completion of disposals which are currently under contract, the ratio comes out at 48.9%. The
Group is therefore clearly ahead of its objectives. 

A reduction in the fixed assets is a direct consequence of both the sales completed and the
standing portfolio valuation, itself based on half-yearly appraisals. Downgrades on this front are
predominantly linked to non-core assets, which justifies the Company's new strategy concentrated
on office property in the Paris region. 

Agenda:                14 November 2013 : Q3 2013 turnover and operations

About Societe de la Tour Eiffel
A listed real estate investment company (SIIC) on NYSE Euronext Paris, the company pursues a
strategy focused on the ownership and the development of quality offices in Paris and its region
capable of attracting a wide range of tenants in both established and emerging locations. The
company's portfolio stands at 809 million Euros of assets spread between the Paris area and the
regions. Societe de la Tour Eiffel is listed on NYSE Euronext Paris (compartment B) - ISIN code:
0000036816 - Reuters: TEIF.PA - Bloomberg EIFF.F. Indexes: GIEIF Foncières, IEIF Immobilier
 Press contact                            Communication 
 Jean-Philippe MOCCI                                                                             Philippe de TREMIOLLES 
 Capmot                                                                                         Chief Financial Officer 
 Tel :+33 (0)1 71 16 19 13/+33 (0)6 71 91 18 83                                              Tel : +33 (0)1 53 43 07 06                                   
Société de la Tour Eiffel: 2013 half-year results 


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Source: Société de la Tour Eiffel via Thomson Reuters ONE

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