Grand City Properties S.A. announces Q1 2020 Results

Grand City Properties S.A. (IRSH) 
Grand City Properties S.A. announces Q1 2020 Results 
 
18-May-2020 / 06:46 CET/CEST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
*THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY 
OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH 
AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION 
OF APPLICABLE LAWS OR REGULATIONS* 
 
*GRAND CITY PROPERTIES S.A. ANNOUNCES SOLID START INTO 2020 WITH ROBUST 
OPERATIONAL RESULTS* 
 
*- Solid operational results in the first quarter for 2020 * 
 
*- No material negative impact from COVID-19.* 
 
*- Net rental income in Q1 2020 remained stable EUR 95 million as compared to 
Q1 2019, although net disposals.* 
 
*- Adjusted EBITDA amounted to EUR 74 million for Q1 2020, up 2% YOY.* 
 
*- Core profitability growth sustained with FFO I for Q1 2020 growing by 5% to 
EUR 55 million in comparison to the first quarter of 2019.* 
 
*- FFO I per share for Q1 2020 was EUR 0.33 growing 3% as compared to 
EUR 0.32 in Q1 2019 FFO I per share after perpetual notes attribution 
increased 4% YOY to EUR 0.28.* 
 
*- Profit for the period amounted to EUR 56 million with a basic EPS of 
EUR 0.24 and diluted EPS of EUR 0.23.* 
 
*- Disposals of over EUR 270 million during Q1 2020, generating a disposal 
gain of approx. EUR 89 million over total costs, resulting in an FFO II of 
EUR 144 million for the first quarter of 2020.* 
 
*- EPRA NAV at the end of the Q1 2020 was EUR 4.1 billion and EUR 24.5 per 
share, stable as compared to year-end 2019.* 
 
*- EPRA NAV including perpetual notes as of March 2020 was EUR 5.1 billion 
and EUR 30.6 on a per share basis.* 
 
*- Total Equity was EUR 5.0 billion, resulting in a strong equity ratio of 
50%.* 
 
*- Solid financial platform characterized by low average cost of debt at 1.3%, 
long average debt maturity of 7.8 years and a low LTV of 36%. * 
 
*- Large liquidity position amounting to EUR 0.95 billion as of March 2020 
and over EUR 1.5 billion including EUR 600 million April 2020 debt issuance. 
Liquidity supported by large pool of unencumbered assets at EUR 6.2 billion 
(77% of value) providing valuable financial flexibility.* 
 
*- Stable operational cash flows demonstrated by strong ICR of 6.7x.* 
 
*- Steady top-line growth with like-for-like rental growth of 3.4%; 2.8% from 
in-place rent increases and 0.6% from occupancy increases.* 
 
*- Dividend proposal for FY 2019 remains unchanged. Guidance slightly updated 
to include impact of bond issuance, Q1 finalized disposals and postponed 
acquisitions.* 
 
*Luxembourg, May 18, 2020 *- Grand City Properties S.A. ('GCP' or the 
'Company') begins the year 2020 with steady and robust operational results 
displaying the resilient nature of its business. On a like-for-like basis net 
rental income increased by 3.4%, with effective vacancy reduction measures 
contributing to an increase of 0.6% YOY. Sustained operational efficiency has 
led to the adjusted EBITDA and FFO I, increasing by 2% and 5% respectively in 
comparison with the same period in 2019. 
 
The coronavirus pandemic has had a rather limited impact on business 
operations in general with new lettings remaining at around average levels 
while fluctuation has been below average levels. Due to the Company's high 
level of digitalization and adaptiveness the effects of the crisis have been 
minimized while also paving the way for new and efficient processes which are 
sure to benefit GCP in the long-term. 
 
During the first quarter of 2020, GCP disposed assets amounting to over 
EUR 270 million, primarily located in North Rhine-Westphalia. The disposals 
were executed at a solid profit margin of 47% over total costs including capex 
and at a slight premium to book values. GCP continues to demonstrate its 
ability to create and crystalize value on investments. Additionally, the 
Company acquired assets of approx. EUR 100 million, located primarily in 
London at an average multiple of 21x. As of the end of March 2020, GCP's 
portfolio was valued at EUR 1,612/sqm, reflecting a rental yield of 4.8% 
 
GCP's conservative financing structure has proven to be prudent in the 
background of the current pandemic and the related economic stress. As of 
March 2020, the Company reported a balance of EUR 950 million under cash and 
liquid assets, which corresponds to approx. 1.7 times the value of debt 
expected to mature in the upcoming 3 years. Furthermore, after the reporting 
period, GCP issued an additional EUR 600 million in bonds providing the 
Company with valuable financial flexibility to navigate through this period 
and benefit from opportunities that may arise. As of March 2020, GCP's average 
cost of debt was 1.3% with a long average debt maturity period of 7.8 years. 
Owing to the Company's robust operational profit generation, GCP's ICR was 
maintained at a very high level of 6.7x. 
 
The guidance was slightly updated due to EUR 600 million bond issued in April 
2020, Q1 finalized disposals and postponed pipeline acquisitions. In the 
current market situation, GCP has put its acquisition on hold and is 
reassessing the market. Therefore, the FFO I for 2020 is now guided at 
EUR 213-220 million, from previously EUR 220-226 million. 
 
Christian Windfuhr, CEO of Grand City Properties: 'While the year 2020 gave us 
unforeseen circumstances and corresponding reactions, the commitment and 
determination with which our employees respond to situations has remained 
unchanged. As a result of the commitment of our people, the robustness of our 
operations remains.' 
 
Financial statements for Q1 2020 are available on the Company's website: 
https://www.grandcityproperties.com/investor-relations/publications/financial- 
reports/ [1] 
 
For definitions of the alternative performance measures please see the 
relevant section in the pages 34 - 37 of the financial statements for Q1 2020, 
which you can find on the website under investor relations > publications > 
financial reports or follow this link: 
https://www.grandcityproperties.com/fileadmin/user_upload/03_investor_relation 
s/Downloads/2020/GCP_Q1_2020.pdf [2] 
 
*About the Company* 
 
The Company is a specialist in residential real estate, value-add 
opportunities in densely populated areas primarily in Germany. The Company's 
strategy is to improve its properties by repositioning and intensive tenant 
management, and then create value by subsequently raising occupancy and rental 
levels. Further information: www.grandcityproperties.com 
 
Grand City Properties S.A. (ISIN: LU0775917882) is a public limited liability 
company (société anonyme) incorporated under the laws of the Grand Duchy of 
Luxembourg, having its registered office at 1, Avenue du Bois, L-1251 
Luxembourg, Grand Duchy of Luxembourg and being registered with the Luxembourg 
trade and companies register (Registre de Commerce et des Sociétés Luxembourg) 
under number B 165 560. The shares of the Company are listed on the Prime 
Standard segment of Frankfurt Stock Exchange. 
 
*Contact: * 
Grand City Properties S.A. 
1, Avenue du Bois 
L-1251 Luxemburg 
T: [phone] 
E: [e-mail] 
www.grandcityproperties.com 
 
*Press Contact: * 
Katrin Petersen 
Grand City Properties S.A. 
T: [phone] 
E: [e-mail] 
 
*DISCLAIMER * 
 
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF 
AN OFFER TO BUY ANY SECURITIES. 
 
THE SECURITIES MENTIONED IN THIS ANNOUNCEMENT HAVE NOT BEEN, AND WILL NOT BE, 
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE 
*SECURITIES ACT*), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT 
REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT. THERE 
WILL BE NO PUBLIC OFFERING OF THE SECURITIES IN THE UNITED STATES. 
 
THIS ANNOUNCEMENT IS DIRECTED AT AND IS ONLY BEING DISTRIBUTED IN THE UNITED 
KINGDOM TO (I) PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO 
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ENTITIES, AND OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED 
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RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR 
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IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (*EEA*), THIS ANNOUNCEMENT AND 
ANY OFFER IF MADE SUBSEQUENTLY IS DIRECTED ONLY AT PERSONS WHO ARE 'QUALIFIED 
INVESTORS' WITHIN THE MEANING OF ARTICLE 2(1)(E) OF DIRECTIVE 2003/71/EC, AS 
AMENDED (THE *PROSPECTUS DIRECTIVE*) (*QUALIFIED INVESTORS*). ANY PERSON IN 
THE EEA WHO ACQUIRES THE SECURITIES IN ANY OFFER (AN *INVESTOR*) OR TO WHOM 
ANY OFFER OF THE SECURITIES IS MADE WILL BE DEEMED TO HAVE REPRESENTED AND 
AGREED THAT IT IS A QUALIFIED INVESTOR. ANY INVESTOR WILL ALSO BE DEEMED TO 
HAVE REPRESENTED AND AGREED THAT ANY SECURITIES ACQUIRED BY IT IN THE OFFER 
HAVE NOT BEEN ACQUIRED ON BEHALF OF PERSONS IN THE EEA OTHER THAN QUALIFIED 
INVESTORS, NOR HAVE THE SECURITIES BEEN ACQUIRED WITH A VIEW TO THEIR OFFER OR 
RESALE IN THE EEA TO PERSONS WHERE THIS WOULD RESULT IN A REQUIREMENT FOR 
PUBLICATION BY THE COMPANY OR ANY OF THE MANAGERS OF A PROSPECTUS PURSUANT TO 
ARTICLE 3 OF THE PROSPECTUS DIRECTIVE. 
 
THIS ANNOUNCEMENT MAY CONTAIN PROJECTIONS OR ESTIMATES RELATING TO PLANS AND 
OBJECTIVES RELATING TO OUR FUTURE OPERATIONS, PRODUCTS, OR SERVICES, FUTURE 
FINANCIAL RESULTS, OR ASSUMPTIONS UNDERLYING OR RELATING TO ANY SUCH 
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May 18, 2020 00:46 ET (04:46 GMT)