Regulatory News:
Société Foncière Lyonnaise (Paris:FLY):
Rental income: €151.5 million (+4.3% on
a comparable portfolio basis)
Attributable net profit: €197.7
million
EPRA NNNAV: €49.4/share (+5.7%)
The financial statements for the year ended 31 December, 2014,
were approved by the Board of Directors of the Société Foncière
Lyonnaise on 11 February, 2015 at a meeting chaired by Juan-José
Brugera. These statements include a new increase in rental income
on a comparable portfolio basis (+4.3%) and a significant rise in
the portfolio’s appraisal value (+9.5% on a comparable portfolio
basis).
The financial statements have been audited and the auditors’
report is being prepared.
Consolidated data (€ millions)
31/12/2014 31/12/2013 Rental income
151.5 149.3 Operating profit before disposals and
fair value adjustments 121.5 119.8 Attributable net profit 197.7
147.3 Underlying attributable profit (EPRA earnings) 52.5
58.7
31/12/2014 31/12/2013 Attributable equity 2,325 2,215
Consolidated portfolio value excluding transfer costs 4,466 3,874
Consolidated portfolio value including transfer costs 4,703
4,071 EPRA NNNAV 2,297 2,172 EPRA NNNAV per share
€49.4 €46.7
Results
- Rental income stood at
€151.5 million on 31 December, 2014, versus
€149.3 million on 31 December, 2013:
- On a comparable portfolio basis, rents
increased by €5.8 million (+4.3%) as a result of leasing
activities in 2013 and 2014.
- Revenues from assets undergoing
renovation during the period in question fell by
€4.5 million.
- Variations in the perimeter saw rental
income fall by €0.5 million, due on the one hand to the sale
of the Mandarin Oriental in February 2013
(-€1.2 million), and on the other to the entry into the
portfolio of the Condorcet building, acquired on 4 December,
2014 (+€0.7 million).
- In addition, SFL received a
compensation payment of €1.5 million following the early
termination of a lease.
- Operating profit before disposal gains
and losses and fair value adjustments to investment properties
stood at €121.5 million on 31 December, 2014, versus
€119.8 million on 31 December, 2013.
- The portfolio’s appraisal value on 31
December, 2014, showed an increase of 9.5% over the year on a
comparable basis, resulting in positive fair value adjustments to
investment properties worth €227.5 million in 2014 (versus €145.3
million in 2013).
- The contribution from associated
companies arising from the stake owned in SIIC de Paris prior to
its sale in July 2014 stood at -€2.2 million on 31 December,
2014, including a €4.3 million profit that contributed to the EPRA
earnings. The respective figures on 31 December, 2013, were
€21.0 million and €11.5 million. The disposal of this
stake, for a sum of €304.9 million, generated a capital gain
of €8.5 million.
- Net financial charges stood at
€87.0 million on 31 December, 2014, versus €70.6 million
on 31 December, 2013. Derivative instrument fair value adjustments
and recycling during the reporting period, as well as the
repurchase in December 2014 of bonds for a nominal amount of
€300 million, had a cost impact of €32.0 million in 2014
(compared to €18.2 million in 2013). Recurring financial costs
were up by €1.5 million on 31 December, 2014.
- After taking account of these key
items, attributable net profit on 31 December, 2014 stood at €197.7
million, compared to €147.3 million on 31 December, 2013. Excluding
the impact of disposals, changes in the fair value of investment
properties and financial instruments and the related tax effect,
underlying attributable net profit (EPRA earnings) amounted to
€52.5 million on 31 December, 2014, versus €58.7 million on 31
December, 2013.
Business review
Rental operations:
In a rental market that remained difficult and selective, albeit
with volumes that increased by 13% relative to 2013, SFL
successfully leased more than 31,000 sq.m. of surfaces in
2014. Highlights included:
- Louvre Saint-Honoré, with
7,500 sq.m. of offices leased to Fast Retailling,
- Edouard VII, with
7,000 sq.m. of offices leased, including the renewal of the
Ashurst lease (4,300 sq.m.),
- 90 Champs-Elysées, with the
pre-leasing of 5,700 sq.m. to a major international consulting
firm,
- Cézanne Saint-Honoré, with
3,800 sq.m. leased to Apax Partners Midmarket
(1,900 sq.m.) and a global financial institution
(1,900 sq.m.).
Nominal office rents for lease agreements in 2014 averaged
€649/sq.m. with effective rents of €558/sq.m.
The occupancy rate (excluding properties undergoing renovation)
on 31 December, 2014, stood at 87.1% compared to 82.0% on 31
December, 2013. The In/Out building at Boulogne, the leasing
process for which is still in progress, accounts for 10.6% of
portfolio vacancy.
Development operations:
During 2014, buildings undergoing redevelopment accounted for
approximately 50,000 sq.m.. Notable projects include:
- the #Cloud.paris project
(33,000 sq.m. of offices) on the rue de Richelieu, where work
has continued and which is due to be delivered in the fourth
quarter of 2015,
- the complete refurbishment of the
shared reception areas at Washington Plaza, which began in
2013 and were delivered at the end of 2014,
- the complete refurbishment of the
57-room Hotel Indigo in the Edouard VII complex, which was
inaugurated in October 2014,
- the redevelopment of 90
Champs-Elysées, which will be delivered in April 2015.
In total, the investments made in 2014 amounted to
€118 million.
Portfolio operations:
On 23 July, 2014, SFL sold the whole of its 29.63% stake in the
capital of SIIC de Paris to Eurosic for a total of
€304.9 million, generating a capital gain of €8.5 million
in the consolidated accounts.
On 4 December, 2014, SFL acquired an office building of
approximately 25,000 sq.m. located on the rue Condorcet in the
9th arrondissement of Paris. This property, which represents an
investment of €230 million, is fully leased by GrDF, the
long-standing occupant of the building, for a fixed term expiring
in 2024.
Financing
On 26 November, 2014, SFL issued a new €500 million bond with a
term of 7 years and a coupon of 1.875%. In parallel, SFL undertook
a tender offer for two public bonds maturing in May 2016 and
November 2017 for a nominal amount of €300 million.
In 2014, SFL also signed two 5-year, €150 million revolving
credit facilities, which replaced facilities that had matured or
were about to do so.
Net debt at 31 December, 2014, amounted to €1,572 million
compared to €1,457 million on 31 December 2013, which represents a
loan-to-value ratio of 33.4%. At that time SFL also had €600
million in undrawn lines of credit. On 31 December, 2014, the
average cost of debt after hedging had fallen to 2.9% (versus 3.3%
the previous year) and the average maturity had risen to 4.0 years
(versus 3.4).
Net Asset Value
On 31 December, 2014, the market value of SFL's portfolio was
evaluated at €4,466 million, excluding transfer costs, an
increase of 15.3% in one year (€3,874 million on 31 December,
2013) that is due in particular to the acquisition of the Condorcet
building. On a comparable basis, the value of the portfolio
increased by 9.5% in 2014, with yields for prime assets
experiencing yet more compression during this period.
The portfolio comprises 19 prestigious properties, most of which
are office buildings located in the heart of Paris (93%) and the
most attractive parts of the Western Crescent (7%).
The average rental yield stood at 4.8% on 31 December, 2014,
compared with 5.1% on 31 December 2013.
EPRA NNNAV came to €2,297 million or €49.4 per share on 31
December, 2014, compared with €46.7 per share on 31 December, 2013,
an increase of 5.7%.
Dividend
At the Annual General Meeting to be held on 22 April 2015, the
Board of Directors will recommend paying a dividend of €1.40 per
share.
More information is available at
www.fonciere-lyonnaise.com
ABOUT SFL:
Leader on the prime segment of the Parisian tertiary real
estate market, the Société Foncière Lyonnaise stands out for the
quality of its property portfolio, which is valued at 4.5 billion
euros and is concentrated on the Central Business District of Paris
(Louvre Saint-Honoré, Edouard VII, Washington Plaza, etc.), and for
the quality of its client portfolio, which is composed of
prestigious companies in the consulting, media, digital, luxury,
finance and insurance sectors.
STOCK MARKET:
Euronext Paris Compartment A – Euronext Paris ISIN
FR0000033409 – Bloomberg: FLY FP – Reuters: FLYP PA
S&P RATING: BBB- Stable outlook
www.fonciere-lyonnaise.com
Company:SFLThomas Fareng, + 33 (0)1 42 97 01
51t.fareng@fonciere-lyonnaise.com
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