EQS-Adhoc: Peach Property Group AG: Extraordinary factors due to nearly completed project developments depress annual earnings for 2014
EQS Group-Ad-hoc: Peach Property Group AG / Key word(s): Preliminary
Results/Profit Warning
Peach Property Group AG: Extraordinary factors due to nearly completed
project developments depress annual earnings for 2014
30.01.2015 / 18:46
Release of an ad hoc announcement pursuant to Art. 53 KR.
The issuer is solely responsible for the content of this announcement.
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Press release
Peach Property Group AG: Extraordinary factors due to nearly completed
project developments depress annual earnings for 2014
- Net loss of around CHF 13 million based on preliminary figures
- Rental income from investment properties increases by more than 30
percent
- Market value of investment properties up 30 percent
- Equity ratio target remains at 40 percent
Zurich, 30 January 2015 - Peach Property Group AG, a leading investor in
residential and commercial real estate, today announced that it expanded
its investment property portfolio in accordance with its strategy in 2014.
Compared with the previous year, the market value of the investment
property portfolio increased by some 30 percent to around CHF 182 million.
As a result of property handovers to buyers, the market value of the
portfolio of development properties decreased by around 30 percent to just
under CHF 300 million. However, this line of business, which is becoming
less important for the company, had a significant negative impact on 2014
earnings due to additional write-downs.
The additional negative impact concerns three development projects in
Berlin and Hamburg, which will be completed shortly. The Group incurred
significant additional costs due to inadequate services provided by some of
the contractors who were responsible for the technical equipment of
buildings in Berlin and the technical equipment and interior work in
Hamburg. These companies have been commissioned after the general
contractor had filed for bankruptcy in 2013. Collaboration with all three
companies was terminated early in the second half of 2014 in order to
complete the buildings by way of substitute performance.
In the second half of 2014 additional costs incurred and expected in this
connection had a one-time negative impact of around CHF 18 million on the
income statement of Peach Property Group. This represents six percent of
the total capital expenditure of around CHF 310 million. The additional
costs caused directly by termination and substitute performance amounted to
around CHF 6.5 million. However, these also resulted in costs of CHF 9
million due to the longer construction period and interest. The decrease in
expected profits also resulted in write-downs of recognized loss
carryforwards amounting to a further CHF 2.5 million. Peach will try to
offload these cost increases to the companies responsible and has initiated
legal action to this effect.
The necessary commissioning of new contractors for the respective projects
has been completed in the meantime so that no additional negative impact is
to be expected. By 25 January 2015, 79 of the 98 units at the "yoo berlin"
project and 24 of the 44 apartments at the "H36" project in Hamburg were
handed over to the buyers.
These extraordinary factors are expected to result in a consolidated loss
after taxes of around CHF 13 million for the 2014 reporting year. This
figure includes all extraordinary items mentioned above.
In contrast, the investment portfolio of Peach Property Group performed
very well. According to preliminary figures, rental income from the
investment properties rose by more than 30 percent, from CHF 5.8 million in
2013 to around CHF 7.7 million in 2014. Reflecting the Group's strategy,
the portfolio was expanded further in 2014. After the acquisition of 336
apartments in Northern Hesse, which was announced in November 2014, Peach
Property Group had a portfolio of 884 apartments at year's end. This
compares to 548 units in the previous year. The total floor space of the
investment portfolio amounted to 117,603 square metres, compared with
87,986 square metres in the previous year. For detailed information about
the portfolio, please also refer to the Asset Reporting published today.
The Group's equity shown for 2014 will decrease in line with the expected
loss. Since the handover of apartments also reduces the Group's total
assets, Peach Property Group expects its equity ratio to remain at roughly
the same level as in the previous year. For 2015, Peach Property Group
expects an additional reduction in equity of CHF 6-7 million - with a
simultaneous decrease in total assets - as a result of the quasi 1:1 parity
of the Swiss franc to the Euro following the discontinuation of the minimum
exchange rate by the Swiss National Bank. The Euro's weakness will
therefore only have a minor impact on the equity ratio. Despite these
extraordinary challenges in the 2014 financial year and in the current
year, Peach Property Group reiterates its previously announced goal of
increasing its equity ratio to 40 percent and is confident that it will be
able to report a profit again in 2015. The Group is currently in the
process of reviewing whether additional action needs to be taken to achieve
the targets mentioned above.
Thomas Wolfensberger, CEO of Peach Property Group: "Our preliminary annual
result shows that our strategic decision to focus on investment properties,
which provides a steady and continuous stream of income, was right. The net
loss for 2014 is a disappointment. It results solely from one-time facts in
connection with the major luxury property projects that were affected by
general contractor bankruptcies. These projects are now almost completed,
and going forward the focus of Peach Property Group will be on its
portfolio of investment properties."
Link to the "Asset Reporting for the 4th quarter of 2014":
http://investoren.peachproperty.com/websites/peachproperty/English/5300/as
set-reporting.html
Contacts:
Media, investors and analysts
Dr. Thomas Wolfensberger, Chief Executive Officer and Dr. Marcel Kucher,
Chief Financial Officer
+41 44 485 50 00 | investors@peachproperty.com
Media Germany
edicto GmbH, Axel Mühlhaus, Peggy Kropmanns
+49 (0) 69 90 55 05 52 | amuehlhaus@edicto.de
About Peach Property Group AG
Peach Property Group AG is a property investor and developer focused on
investments in Switzerland and Germany. The portfolio includes an
increasing number of investment properties that are designed to generate
sustained income as well as attractive residential development properties.
The Group's activities cover the entire value chain, from site evaluation
to project planning, implementation and marketing. In the investment
segment, the Group is focused on properties with a potential for achieving
attractive yields based on active asset management - typically secondary
locations in the catchment area of urban agglomerations. In the development
segment, the Group concentrates on exceptional locations and properties
with high-end specifications and amenities that meet the requirements of a
demanding clientele.
Peach Property Group AG is headquartered in Zurich and has its German Group
headquarters in Cologne. Peach Property Group AG is listed on the SIX Swiss
Exchange (PEAN, ISIN CH0118530366).
For more information, see www.peachproperty.com
End of ad hoc announcement
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Additional features:
Document: http://n.equitystory.com/c/fncls.ssp?u=QMJLNEAYBQ
Document title: Press release
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30.01.2015 News transmitted by EQS Schweiz AG. www.eqs.com - news
archive: http://switzerland.eqs.com/de/News
The issuer is responsible for the contents of the release.
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Language: English
Company: Peach Property Group AG
Seestrasse 346
8038 Zürich
Switzerland
Phone: +41 44 485 50 00
Fax: +41 44 485 50 11
E-mail: investors@peachproperty.com
Internet: www.peachproperty.com
ISIN: CH0118530366
Valor: A1C8PJ
Listed: Freiverkehr in Berlin, Stuttgart; Frankfurt in Open Market
; SIX
End of News EQS Group News-Service
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