EANS-News: Atrium European Real Estate Limited / Nine months 2020 trading update

DJ EANS-News: Atrium European Real Estate Limited / Nine months 2020 trading update

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Company Information 
 
St Helier Jersey / Channel Islands - Nine months 2020 trading update 
 
Jersey, 6 November 2020, Atrium European Real Estate Limited (VSE/Euronext: 
ATRS), (the "Company" and together with its subsidiaries, the "Atrium Group" or 
the "Group"), a leading owner, operator and redeveloper of shopping centres and 
retail real estate in Central Europe, provides an update on both trading for the 
nine months ended 30 September 2020 and the impact of Covid-19 on the Group's 
operations. 
 
Update on COVID-19 situation 
 
Encouraging Q3 recovery losing momentum with second wave restrictions 
 
 
* Our centres saw a solid recovery over the summer trending towards pre Covid-19 
  levels as restrictions began to be lifted from May. 
* Footfall and tenant sales showed an encouraging recovery in August, reaching 
  77% and 93% respectively of 2019 levels. In September, as infections begun to 
  rise in Poland, the Czech Republic and Slovakia, footfall and sales slightly 
  weakened to 76% and 86%, and have continued to slowdown as governments 
  reinstate restrictions in response to the increasing number of Covid-19 cases. 
* Collections for the first nine months of 2020 improved significantly to 94% 
  with tenant negotiations nearly completed. 
* 90% of the Group's GLA is currently open, down from 98% at the beginning of 
  October, following new lockdowns in the Czech Republic and Slovakia. 
* Poland has announced on 4 November a second set of restrictions with non- 
  essential shops to be closed from the 7th to the 29th of November. 
 
 
Solid financial position to meet our liquidity needs 
 
 
* Adequate liquidity and financial flexibility to manage the headwinds of Covid- 
  19 with EUR264 million of uncommitted resources, comprising EUR50 million of 
  cash and a EUR214 million unutilised credit facility as of today and a net LTV 
  ratio of 37.5%. 
* Key steps taken for cash conservation and to improve liquidity include: 
* Extended the Group's average debt maturity to 4.8 years (2.9% average cost of 
  debt) by 
  successfully completing a EUR218 million bond buy back and EUR200 million tap 
  of the 2025 notes in June. An additional EUR8 million bond buy back of the 
  2022 notes was executed in October. 
* Voluntary scrip dividend alternative introduced for Q2, Q3 and Q4 2020 
  dividends, the take up resulted in EUR21 million of cash being conserved to 
  date following an approximately 40% shareholder participation in relation to 
  Q2 and Q3 2020. 
* Establishment of an Inaugural Euro Medium Term Note programme together with a 
  green financing framework, with a potential ECB's corporate sector purchase 
  programme (CSSP) eligibility. 
 
 
Key financial and operational figures for the period 
 
 
In EURm                        9M 2020 9M 2019           CHANGE 
                                                         %/ppt 
Net rental income ("NRI")      106.5   133.4             (20.1) 
NRI excl. impact of disposals  117.9   133.4             (11.6) 
EPRA Like-for-Like NRI         75.9    87.4              (13.1) 
Occupancy rate (%)             92.9%   97.0%[1] [#_ftn1] (4.1) 
Operating margin (%)           90.0%   94.6%             (4.6) 
EBITDA                         91.9    116.8             (21.3) 
Company adjusted EPRA earnings 56.3    80.5              (30.0) 
 
 
 
* Group NRI was EUR107 million for the 9M 2020, down -20% or EUR26 million from 
  2019 due to: 
 
  o EUR35 million Covid-19 impact offset by EUR18 million straight line of 
    tenant support [2] [#_ftn2] 
  o EUR11 million disposals impact as part of the portfolio rotation strategy 
  o Offset by EUR2 million rental growth mainly arising from indexation 
 
* On a like-for-like basis, NRI decreased by 13%. 
* Focus on proactive tenant engagement has ensured solid occupancy rate of c.93% 
  as at the end of September. 
* Operating margin decreased by 4.6ppt to 90%, of which 4.4ppt was due to the 
  service charge relief for the lockdown period imposed by the government in 
  Poland. 
* EBITDA and Company adjusted EPRA earnings decreased by 21% and 30% 
  respectively. The decrease in rental income due to Covid-19 (EUR17 million 
  net) and disposals (EUR11 million) was partially offset by EUR1.5 million 
  reduction in administrative costs and EUR0.9 million decrease in finance cost. 
 
 
Disposals 
 
 
* The Group continued its portfolio rotation and repositioning strategy 
  throughout 2020 with EUR75 million of transactions, including the sales of the 
  Atrium Duben shopping centre in Slovakia in January, five assets in Poland in 
  July and a land plot in Lublin in August. 
 
 
Dividend 
 
 
* The Q4 2020 dividend will be paid (as a capital repayment) on 30 December 2020 
  to shareholders on the register as at 8 December 2020, with an ex-dividend 
  date of 7 December 2020. The election date for a scrip dividend will start on 
  9 December 2020 and end on 21 December 2020. 
* A circular setting out further details on the election being offered to 
  shareholders pursuant to the scrip dividend alternative, including the 
  election instructions and information on the exchange ratio, will be posted to 
  shareholders before the start of the election period, and will be available on 
  the Company's website. 
* 2021 dividend policy: Atrium has increased its focus on strengthening its 
  balance sheet and improving liquidity through the implementation of a cash 
  conservation programme since the onset of the pandemic. Recent government 
  trading restrictions and lockdowns have added further uncertainty to the near- 
  term trading conditions. As a result, the Board has decided to delay a 
  decision on the 2021 dividend policy to the 2020 results announcement in 
  February 2021. 
 
 
Liad Barzilai, Chief Executive Officer of Atrium Group, commented: 
"Following the lifting of Covid-19 related health restrictions, which commenced 
in early May, we began to build positive momentum in footfall and retail sales 
thru the summer with the third quarter trending back towards 2019 historical 
levels. However, the recent rising number of Covid-19 cases has led to further 
government restrictions and we are beginning to see a slowdown of the Q3 
momentum. While the future impacts of Covid-19 remain uncertain, I am encouraged 
by the Company's strong performance and pace of recovery over the summer, as 
well as our high levels of rent collection. Furthermore, our solid financial and 
liquidity positions allow us to deal with the short-term headwinds that we may 
face." 
 
 
 
Further information can be found on the Company's website www.aere.com or for 
Analysts: 
Molly Katz: [e-mail] 
 
Press & Shareholders: 
FTI Consulting Inc.: [phone] 
Richard Sunderland / Claire Turvey / Andrew Davis: [e-mail] 
[[e-mail]] 
 
About Atrium European Real Estate 
Atrium is a leading owner, operator and redeveloper of shopping centres and 
retail real estate in Central Europe. Atrium specializes in locally dominant 
food, fashion and entertainment shopping centres in the best urban locations. 
Atrium owns 26 properties with a total gross leasable area of over 808,100 sqm 
and with a total market value of approximately EUR2.5 billion. These properties 
are located in Poland, the Czech Republic, Slovakia and Russia, and with the 
exception of one, are all managed by Atrium's internal team of retail real 
estate professionals. 
 
In January 2020 Atrium announced a strategy to diversify its portfolio by 
investing in and managing residential for rent real estate, with a primary focus 
on Warsaw. 
 
 
The Company is established as a closed-end investment company incorporated and 
domiciled in Jersey and regulated by the Jersey Financial Services Commission as 
a certified Jersey listed fund, and is listed on both the Vienna Stock Exchange 
and the Euronext Amsterdam Stock Exchange. Appropriate professional advice 
should be sought in the case of any uncertainty as to the scope of the 
regulatory requirements that apply by reason of the above regulation and 
listings. All investments are subject to risk. Past performance is no guarantee 
of future returns. The value of investments may fluctuate. Results achieved in 
the past are no guarantee of future results. 
 
For details on the EMTN programme see: https://aere.com/emtn.aspx [https:// 
aere.com/emtn.aspx] 
 
For this press release see: https://www.aere.com/Files/PressRelease/ 
20201106_3Q20_trading_update_ENG.pdf [https://www.aere.com/Files/PressRelease/ 
20201106_3Q20_trading_update_ENG.pdf] 
 
For the presentation see: https://www.aere.com/Files/Presentation/ 
20201106_3Q20_trading_update_presentation.pdf [https://www.aere.com/Files/ 
Presentation/20201106_3Q20_trading_update_presentation.pdf] 
 
[1] [#_ftnref1] As of 31 December 2019 
[2] [#_ftnref2] The EUR18 million will be accounted for over a c.3 year period 
representing the remaining term of the relevant leases 
 

Further inquiry note: 
For further information: 
FTI Consulting Inc.: 
[phone] 
Richard Sunderland 
Claire Turvey 
[e-mail] 
 
end of announcement                         euro adhoc 
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(END) Dow Jones Newswires

November 06, 2020 00:50 ET (05:50 GMT)