Business Wire

SFL – First-Half 2019 Results

Share

Regulatory News:

The interim consolidated financial statements for the six months ended 30 June 2019 were approved by the Board of Directors of Société Foncière Lyonnaise (Paris:FLY) on 26 July 2019, at its meeting chaired by Juan José Brugera.

These financial statements show further significant increases in business indicators, the portfolio value and the Company’s NAV, driven by sustained business activity.

The auditors have completed their review of the financial statements and issued their report on the interim financial information, which does not contain any qualifications or emphasis of matter.

Consolidated data (€ millions)

 

 

H1 2019

H1 2018

Change

Rental income

97.9

96.1

+1.9%

Adjusted operating profit*

83.3

78.7

+5.8%

EPRA earnings

57.2

51.7

+10.6%

Attributable net profit

253.5

200.2

-

* Operating profit before disposal gains and losses and fair value adjustments

 

 

 

30/06/2019

31/12/2018

Change

Attributable equity

4,142

4,010

+3.3%

Consolidated portfolio value excluding transfer costs

6,823

6,570

+3.9%

Consolidated portfolio value including transfer costs

7,276

7,005

+3.9%

EPRA NNNAV

4,104

4,017

+2.2%

EPRA NNNAV per share

€88.2

€86.3

Results: significant increases in business indicators

Rental income:

First-half 2019 consolidated rental income amounted to €97.9 million, up €1.8 million or 1.9% from the €96.1 million reported for the same period of 2018.

  • On a like-for-like basis (excluding all changes in the portfolio affecting period-on-period comparisons), rental income was €3.3 million (3.6%) higher, attributable to new leases signed in 2018, mainly in the Washington Plaza and Cézanne Saint-Honoré properties, and to index increases.
  • Rental income from spaces being redeveloped declined by €1.8 million over the period, mainly reflecting the departure in 2018 of the last tenants from the 83 Marceau building, which is currently being renovated, and the refurbishment of several floors in the 176 Charles de Gaulle building in Neuilly that were vacated at the end of last year.
  • Lastly, income from various penalties was up by a slight €0.3 million in first-half 2019.

Operating profit before disposal gains and losses and fair value adjustments to investment property rose 5.8% to €83.3 million in first‑half 2019 from €78.7 million in the year‑earlier period.

Portfolio appraisal value:

The portfolio’s appraisal value at 30 June 2019 was 3.9% higher on a like-for-like basis than at 31 December 2018. The increase led to the recognition of positive fair value adjustments to investment property of €234.5 million in first-half 2019 versus positive adjustments of €159.2 million in the same period of 2018.

Net profit for the period:

Net finance costs amounted to €15.2 million in first‑half 2019 compared with €16.5 million in the year-earlier period, representing a net decrease of €1.3 million. The Group's significantly lower average cost of debt led to a €1.8 million reduction in recurring financial expense.

After taking into account these core items, the Group reported EPRA earnings of €57.2 million in first‑half 2019, up 10.6% from €51.7 million in first‑half 2018, while attributable net profit for the period came in at €253.5 million compared with €200.2 million in first‑half 2018.

Sustained business activity: full occupancy of assets, dynamic letting activity and progress on redevelopment projects

Rental operations:

Despite a first-half decline in rental volumes, which were nonetheless in line with the average for the past ten years, the segment of the Paris region office rental market occupied by SFL remained very buoyant, with the shortage of available properties in the Central Business District driving up rental values, especially for prime properties. During the period, the SFL Group signed leases on around 24,000 sq.m. of mainly office space, on excellent terms.

They include a long-term lease with WeWork on the whole of the 106 Haussmann building (12,000 sq.m.) that will come into effect at the beginning of 2020 after the current tenant moves out at the end of this year.

The new leases were signed at an average nominal rent of €778 per sq.m, corresponding to an effective rent of €672 per sq.m. These prices attest to the very healthy state of the Paris rental market.

The physical occupancy rate for revenue-generating properties stood at 97.5% at 30 June 2019 compared with 97.3% at 31 December 2018. The remaining vacant units are located mainly in the Le Vaisseau building in Issy-les-Moulineaux. The EPRA vacancy rate was 1.7% versus 1.6% at 31 December 2018.

Development operations:

Properties undergoing development at 30 June 2019 represented roughly 16% of the total portfolio. They consist mainly of the three flagship projects concerning:

  • The retail space in the Louvre Saint-Honoré complex (approximately 18,000 sq.m.) for which a new building permit was obtained in March. This project is scheduled for delivery in 2023 under a turnkey lease signed with the Richemont group for the entire space. The lease is subject to conditions precedent.
  • The Biome office complex on avenue Emile Zola (approximately 24,000 sq.m.), which will be comprehensively remodelled. The property has undergone extensive preparation work and renovation is scheduled to begin in the final quarter of 2019, with delivery by late 2021.
  • The office building at 83 avenue Marceau (approximately 9,000 sq.m.). The redevelopment work began on schedule and the building is due to be delivered in 2021.

Capitalized work carried out in first-half 2019 totalled €15.0 million and concerned the above three redevelopment projects, as well as the full renovation of several floors in the Washington Plaza, 9 Percier and 176 Charles de Gaulle (Neuilly) buildings.

Portfolio operations:

No properties were purchased or sold during first-half 2019.

Financing: further reduction in average borrowing costs, a very robust financial position

In June, a €390 million, five-year syndicated revolving line of credit was set up with SFL’s banking pool. This new facility cancels and replaces a previous €400 million syndicated revolving line of credit that was reduced to €250 million in 2018 and was due to expire in July 2020.

The Negotiable European commercial paper (NEU-CP) programme set up in 2018 was increased during first-half 2019 from €300 million to €500 million. Issuance under the programme amounted to €354 million at 30 June 2019.

These transactions have enabled the Group to extend the average maturity of its debt while continuing to benefit from historically low average borrowing costs.

Net debt at 30 June 2019 amounted to €1,761 million, compared with €1,688 million at 31 December 2018, representing a loan-to-value ratio of 24.2%. At 30 June 2019, the average cost of debt after hedging was 1.4% and the average maturity was 4.2 years. At the same date, the interest coverage ratio stood at 6.3x.

At 30 June 2019, SFL had €990 million in undrawn lines of credit.

EPRA NNNAV up 2.2%

The consolidated market value of the portfolio rose by 3.9% to €6,823 million excluding transfer costs at 30 June 2019, from €6,570 million at 31 December 2018. The increase reflected higher rental values, resilient prime property yields in Paris and the value added by the Group to properties undergoing redevelopment.

The average EPRA topped-up net initial yield (NIY) was 3.1% at 30 June 2019, down slightly from 3.2% at 31 December 2018.

EPRA NNNAV stood at €4,104 million or €88.2 per share at 30 June 2019 versus €86.3 per share at 31 December 2018, reflecting increases of 2.2% over the past six months (after payment of a dividend of €2.65 per share in April) and 7.1% over twelve months.

EPRA indicators

H1 2019

H1 2018

EPRA Earnings (€m)

57.2

51.7

/share

€1.23

€1.11

EPRA Cost Ratio (including vacancy costs)

13.2%

14.7%

EPRA Cost Ratio (excluding vacancy costs)

12.5%

13.8%

30/06/2019

31/12/2018

EPRA NAV (€m)

4,282

4,142

/share

€92.0

€89.0

EPRA NNNAV (€m)

4,104

4,017

/share

€88.2

€86.3

EPRA Net Initial Yield (NIY)

2.9%

2.8%

EPRA topped-up NIY

3.1%

3.2%

EPRA Vacancy Rate

1.7%

1.6%

Alternative Performance Indicators (APIs)

API EPRA earnings

€ millions

H1 2019

H1 2018

Attributable net profit

253.5

200.2

Less:

 

 

Profit (loss) on asset disposals

-

-

Fair value adjustments to investment property

(234.5)

(159.2)

Fair value adjustments to financial instruments, discounting adjustments to debt and related costs

2.1

1.5

Tax on the above items

12.5

2.0

Non-controlling interests in the above items

23.6

7.2

EPRA earnings

57.2

51.7

API EPRA NNNAV

€ millions

30/06/2019

31/12/2018

Attributable equity

4,142

4,010

Treasury shares

8

10

Unrealised capital gains

20

19

Fair value adjustments to fixed rate debt

(66)

(22)

EPRA NNNAV

4,104

4,017

API net debt

€ millions

30/06/2019

31/12/2018

Long-term borrowings and derivative instruments

1,494

1,494

Short-term borrowings and other interest-bearing debt

364

269

Debt in the consolidated statement of financial position

1,858

1,763

Less:

 

 

Current account advances (liabilities)

(52)

(52)

Accrued interest, deferred recognition of debt arranging fees, negative fair value adjustments to financial instruments

(2)

2

Cash and cash equivalents

(43)

(25)

Net debt

1,761

1,688

More information is available at www.fonciere-lyonnaise.com

About SFL

Leader in the prime segment of the Parisian commercial real estate market, Société Foncière Lyonnaise stands out for the quality of its property portfolio, which is valued at €6.8 billion and is focused on the Central Business District of Paris (#cloud.paris, 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. As France’s oldest property company, SFL demonstrates year after year an unwavering commitment to its strategy focused on creating a high value in use for users and, ultimately, substantial appraisal values for its properties.

Stock market: Euronext Paris Compartment A – Euronext Paris ISIN FR0000033409 – Bloomberg: FLY FP –
Reuters: FLYP PA

S&P rating: BBB+ stable outlook

Contact information

SFL - Thomas Fareng - Phone +33 (0)1 42 97 27 00 - t.fareng@fonciere-lyonnaise.com
Evidence - Grégoire Silly - Phone +33 (0)6 99 10 78 99 - gregoire.silly@evidenceparis.fr

About Business Wire

For more than 50 years, Business Wire has been the global leader in press release distribution and regulatory disclosure.

Subscribe to releases from Business Wire

Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from Business Wire

CES Unveiled in Paris to Shine Spotlight on Artificial Intelligence26.8.2019 10:00:00 EESTPress release

Consumer Technology Association (CTA)®: WHAT: The Consumer Technology Association (CTA)® today announced that CES Unveiled in Paris will focus on emerging technology and trends around artificial intelligence (AI). More than 1,000 expected attendees will be able to view the latest AI innovations, learn about the latest tech trends and network with industry leaders. An official CES 2020 preview, CES Unveiled returns to Paris for a seventh year on Tuesday, Oct. 22 at Palais Brongniart. Attendees will experience a full day of tech that will feature more than 80 companies of all sizes, influential media, senior level executives, and prominent industry influencers from France and across Europe. Attendees will discover how AI is shaping our world, from changing enterprises to affecting ethics and policy. Industry experts and thought leaders from all over Europe will share insights on AI, enterprise solutions, mobility, Internet of Things (IoT) infrastructure, autonomous vehicles, diversity an

Study Investigates the Utility of Masimo ORi™, Oxygen Reserve Index, to Reduce Hyperoxia in Critically Ill Patients26.8.2019 09:00:00 EESTPress release

Masimo (NASDAQ: MASI) announced today that in a randomized controlled study involving 150 ICU patients recently published as a letter in Intensive Care Medicine, researchers investigated whether monitoring with Masimo ORi™ (Oxygen Reserve Index) could reduce the time critically ill patients spend with moderate hyperoxia, compared to monitoring with oxygen saturation (SpO2) alone.1 ORi is an index of oxygenation in the moderate hyperoxic region, defined as arterial partial pressure of oxygen, PaO2 , in the range of 100 to 200 mmHg). As an “index” with a scale between 0.0 and 1.0, ORi can be trended to notify clinicians of changes in a patient’s oxygen reserve. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190825005030/en/ Masimo Root® and Radical-7® with ORi™ (Photo: Business Wire) Dr. Sigismond Lasocki and colleagues at the Centre Hospitalier Universitaire of Angers, France (CHU Angers), sought to evaluate whether controlli

S BLOCK 1000 Pax Interstellar Quantitative Summit Convenes in Bangkok26.8.2019 08:24:00 EESTPress release

On August 21st, "S BLOCK Interstellar Quantitative Summit" officially convened in Bangkok, Thailand! This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190825005035/en/ (PHOTO: S BLOCK) Interstellar Quantification Assists S BLOCK to be Further Technologized S BLOCK is a brand-new multi-currency, cross-chain technology wallet from Switzerland, which jointly issued by S BLOCK foundation, Cloud Capital, Top Line, DAF, Stanford Blockchain Research center, MIT Media Lab and Cambridge Financial Alternative Center. Since its launch on June 15, it has bring an generous revenue of 6-15% per month for its millions of users. Interstellar quantification is S BLOCK's biggest source of revenue. Interstellar quantification is to realize timely capital exchanges with the quantification team under the agreement of Interstellar loan contract, so as to enlarge the capital scale at the fastest speed and lock up trading opportunities addition, S Blo

Building The Data Economy Within The G726.8.2019 08:00:00 EESTPress release

Under the French Presidency, the G7 summit in Biarritz brings together the heads of state and government of the largest economies. This summit comes three months after the digital technology ministers meeting of G7 countries in Paris where the need to strengthen international digital cooperation was a key focal point of the debates. Discussions are still ongoing to resolve the challenges of the data economy, and the free flow of data in a trusted environment. Several international initiatives in favor of data circulation took place in recent months. As part of the Digital Single Market, the European Commission announced a new regulation on the free flow of non-personal data. The United States initiated a federal plan for data strategy. At the G20, Japan proposed the Osaka Track initiative to standardize the international rules for data flow. According to Dawex, the leading data exchange technology company and operator of the largest data marketplace, the flow of data in the G7 countrie

Gilead and Galapagos Complete Closing of Their Transformative Research and Development Collaboration23.8.2019 23:01:00 EESTPress release

Gilead Sciences, Inc. (NASDAQ: GILD) and Galapagos NV (Euronext & NASDAQ: GLPG) today announced the closing of the global research and development collaboration agreement signed on July 14, 2019. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190823005335/en/ This agreement has received clearance from the U.S. Federal Trade Commission under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and merger control approval from the Austrian Federal Competition Authority. Under the terms of the agreement, the closing of this transaction triggers an upfront license fee payment of $3.95 billion by Gilead to Galapagos. In addition, Gilead has made an equity investment in Galapagos of approximately $1.1 billion (or approximately €960 million) by subscribing for new shares at a price of €140.59 per share, including issuance premium. As a result, Gilead now owns 13,589,686 ordinary shares of Galapagos, representing approximately 2

32 Leading Global Fashion and Textile Companies Make Commitments on Climate, Biodiversity and Oceans23.8.2019 10:47:00 EESTPress release

Ahead of the G7 meeting at Biarritz from August 24-26, French President Emmanuel Macron, accompanied by Economy and Finance Minister Bruno Le Maire, Minister of Labour Muriel Pénicaud, and Deputy Minister of Ecological and Solidary Transition Brune Poirson, has invited to the Elysée Palace representatives of the 32 fashion and textile companies who have launched the Fashion Pact by his side. In April 2019, ahead of the G7 meeting, Emmanuel Macron had given François-Henri Pinault, Chairman and Chief Executive Officer of Kering (Paris:KER), a mission to bring together the leading players in fashion and textile, with the aim of setting practical objectives for reducing the environmental impact of their industry. In a historic move, given the scale and importance of the coalition that has been created, 32 leading companies from the fashion and textile industry have given themselves a set of shared objectives in the form of a Fashion Pact. The coalition includes groups and brands in Luxury,

In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.

Visit our pressroom