Press Release
Regulated Information        

Half year results 2017: VGP performs at record levels

22 August 2017 - 7.00 a.m. CET, Diegem (Belgium): VGP NV ('VGP' or 'the Group', Euronext Brussels ISIN BE0003878957) today announced results for the six months ending 30 June 2017.

  • Profit for the period of € 62.5 million (+ € 19.7 million compared to 30 June 2016)
  • Net valuation gain on the investment portfolio reaches € 59.9 million (compared to € 65.1 million at the end of June 2016)
  • At the end of May, a third closing occurred with the VGP European Logistics joint venture (50/50 JV with Allianz Real Estate) with a transaction value in excess of € 173 million
  • Capital distribution in cash of € 20.1 million (€ 1.08 per share) paid to the shareholders on 4 August 2017

VGP, the developer, manager and owner of high quality logistics real estate in Europe, has today published its half-year 2017 results. The Group experienced strong growth in all its active markets, with profits for the period up to € 62.5 million, an increase of 46.1% on the same period last year, and net valuation gain on the portfolio amounting to €59.9 million.

Jan Van Geet, CEO of VGP Group, said: "We are delighted with a positive set of half yearly results which demonstrate the strength of our business model. Our future project pipeline is robust, supported by a successful bond issuance program that has exceeded expectations, and we are completing current projects at record pace, driving profits higher from this period last year. We believe in rewarding the loyalty of our investors and so we are delighted to share our success with them."

The Group's portfolio has continued to make strong progress during the first half, growing both in value and physical size. The value of annualised committed leases is now € 78.2 million[1], demonstrating a
€ 13.8 million increase in the first half of 2017 alone, while the signed annualised committed leases at the end of June 2017 represent a total of 1,564,320 m² of lettable area, a 22.4% increase since 31 December 2016. Of this total space 573,433 m² belong to the own portfolio (545,715 m² as at 31 December 2016) and 990,888 m² to the VGP European Logistics joint venture (732,523 m² at 31 December 2016).

At the end of May, a third successful closing occurred with the VGP European Logistics joint venture (50/50 JV with Allianz Real Estate). It is our shared intention to grow this property portfolio considerably in the coming years (> € 1.5 billion in asset value). The transaction value of the third closing was in excess of € 173 million. In the first half of 2017, VGP delivered a total of 9 projects representing 169,566 m² of lettable area, with an additional 21 projects under construction representing 527,876 m² of future lettable area.

Gearing level of the Group decreased to 34.9% as at 30 June 2017 (39.4% at 31 December 2016) despite raising of new debt during the first half of 2017.

The portfolio's strong performance during the first half has allowed the Group to distribute capital of € 20.1 million (€ 1.08 per share) paid to the shareholders on 4 August 2017. In view of the successful and sustainable evolution of the Group's results, VGP has decided to adopt a formal dividend policy. From 2018 onwards and subject to availability of sufficient distributable reserves and shareholder approval, the Company intends to gradually increase the distribution of dividends over the next 3 years to target an annual distribution between 40% and 60% of its net profit for the year based on its consolidated IFRS financial statements.

Summary

During the first half of 2017 VGP continued its strong growth in all the markets where the Group is active. E-commerce continued to be a strong driver of demand for new lettable space. Development and letting activities continue to perform at record levels.

During the first half of 2017, a third closing was made with VGP European Logistics (the 50/50 joint venture with Allianz Real Estate) in which the Joint Venture acquired 6 new parks from VGP, comprising 7 logistic buildings, and another 4 newly completed logistic buildings which were developed in parks previously transferred to the Joint Venture. The 6 parks are located in Germany (3) and in the Czech Republic (3). The additional 4 buildings which were acquired by the Joint Venture are also located in Germany (3 buildings) and in the Czech Republic (1 building).

During the first half of 2017, VGP continued to improve its financial debt profile with the successful private placement of an 8 year, € 80 million bond at the end of March 2017, and the issue at the beginning of July of a new € 75 million, 7 year retail bond to refinance the Jul-17 Bond maturing on 12 July 2017.

VGP's activities during the first half of 2017 can be further summarised as follows:

·                The operating activities resulted in a profit of € 62.5 million (€ 3.36 per share) for the period ended 30 June 2017 compared to a profit of € 42.7 million (€ 2.30 per share) for the period ended 30 June 2016.
·                The increase in demand of lettable area resulted in the signing of new lease contracts in excess of € 16.0 million in total of which € 14.8 million related to new or replacement leases (€ 6.9 million on behalf of VGP European Logistics) and € 1.2 million (€ 0.6 million on behalf of VGP European Logistics) were related to renewals of existing lease contracts.
·                The weighted average term of the annualised committed leases of the combined own and Joint Venture portfolio stood at 10.2 years at the end of June 2017 (10.3 years as at 31 December 2016). The own portfolio reached 14.0 years, while the Joint Venture portfolio reached 8.1 years.
·                The Group's property portfolio, including the own and Joint Venture property portfolio, reached an occupancy rate of 100.0% at the end of June 2017 compared to 98.8% at the end of December 2016.
·                The own investment property portfolio consists of 13 completed buildings representing
353,089 m² of lettable area whereas the Joint Venture property portfolio consists of 44 completed buildings representing 809,022 m² of lettable area.
·                At the end of June 2017, 21 buildings representing 527,876 m² of lettable area were under construction.
·                The net valuation of the property portfolio as at 30 June 2017 showed a net valuation gain of
€ 59.9 million (against a net valuation gain of € 65.1 million per 30 June 2016).
·                185,000 m² of new development land plots have been acquired and 1,159,000 m² new land plots have been identified or are under option to support the development pipeline and which are expected to be acquired partly during the current year 2017 and partly in the course of 2018, subject to obtaining permits.
·                As at 30 June 2017 the financial income benefited from the interest income on loans made available to the Joint Venture (€ 2.1 million) and the unrealised gain on financial instruments (€2.1 million) but was adversely impacted by the interest on the issued bonds (€ 8.9 million) at the end of June. This resulted in a net financial cost of € 5.0 million[2] as at 30 June 2017 compared to € 14.6 million as at 30 June 2016.
·                Successful private placement of a new 8 year € 80 million bond at the end of March 2017 and successful placement of a 7 year € 75 million retail bond at the beginning of July 2017 to refinance the maturing Jul-17 Bond.
·                On 4 August 2017, the Company performed a capital reduction of € 20,069,694.00 capital reduction paid out in cash, corresponding to € 1.08 per share.
 

For more information

 

Mr Jan Van Geet		  

Mr Dirk Stoop 
CEO CFO
Tel. + 420 602 404 790 Tel.+32 52 45 43 86
E-mail: jan.van.geet@vgpparks.eu E-mail: dirk.stoop@vgpparks.eu

Profile

VGP (www.vgpparks.eu) constructs and develops high-end logistic real estate and ancillary offices for its own account and for the account of its VGP European Logistics joint venture (50:50 joint venture between Allianz Real Estate and VGP), which are subsequently rented out to reputable clients on long term lease contracts. VGP has an in-house team which manages all activities of the fully integrated business model: from identification and acquisition of land, to the conceptualisation and design of the project, the supervision of the construction works, contracts with potential tenants and the facility management.

VGP is quoted on Euronext Brussels and the Main Market of the Prague Stock Exchange.

VGP_Press_Release_EN_22.08.17


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Source: VGP NV via Globenewswire