TEL-AVIV, Israel, May 28, 2013 (GLOBE NEWSWIRE) -- Gazit-Globe (TASE:GZT) (NYSE:GZT), one of the world's leading multi-national real estate companies focused on acquisition, development and redevelopment of supermarket-anchored shopping centers announced today its financial results for the first quarter ended March 31, 2013.
References to the "Group" relate to Gazit-Globe's consolidated statements. References to the "Company" relate to Gazit-Globe's stand-alone financial statements. Unless otherwise stated, financial information included in this press release relates to the "Group".
Highlights:
- NOI for the quarter increased by 5% to NIS 883 million (U.S.$ 242 million), compared to NIS 840 million (U.S.$ 230 million) in the same quarter last year
- FFO for the quarter increased by 19% to NIS 150 million (U.S.$ 41 million), or NIS 0.90 per share (U.S.$ 0.25), compared to NIS 126 million (U.S.$ 35 million), or NIS 0.76 per share (U.S.$ 0.21), in the same quarter last year
- Investments during the quarter totaled NIS 629 million (U.S.$ 172 million). The group recycled capital from the divestitures of non-core properties in the amount of NIS 611 million (U.S.$ 167 million)
- Same Property NOI for the first quarter of 2013 grew by 3.1%, compared to same quarter last year
- Occupancy rate as of March 31, 2013 reached 94.7%, compared to 95.0% as of December 31, 2012 and 94.3% as of March 31, 2012
- Shareholders' equity as of March 31, 2013 totaled NIS 7,618 million (U.S.$ 2,088 million), or NIS 46.1 per share (U.S.$ 12.64), compared to NIS 7,849 million (U.S.$ 2,152 million), or NIS 47.5 per share (U.S.$ 13.02), as of December 31, 2012, and to NIS 7,395 million (U.S.$ 2,027 million), or NIS 44.9 per share (U.S.$ 12.31), as of March 31, 2012. The decrease in shareholders' equity compared to the year-end 2012 is a result of the NIS appreciation against foreign currencies
- EPRA NAV per share as of March 31, 2013 was NIS 54.1 (U.S.$ 14.83) compared to NIS 56.9per share (U.S.$ 15.60) as of December 31, 2012, and to NIS 51.6 (U.S.$ 14.15) as of March 31, 2012
- As of March 31, 2013, the Group had cash on hand and unutilized revolving credit facilities in the amount of NIS 8.1 billion (U.S.$ 2.2 billion) of which NIS 2.0 billion (U.S.$ 0.55 billion) is at the Company level
- As of March 31, 2013, net debt to total assets (LTV) was 55.6%, compared to 56.1% as of December 31, 2012, and to 57.8% as of March 31, 2012
- The credit agency S&P Maalot upgraded Gazit-Globe's domestic credit rating from ilA+ to ilAA- with a stable outlook
- The Company's Board of Directors declared a quarterly cash dividend of NIS 0.43 per share (U.S.$ 0.12) payable on July 2, 2013 to shareholders of record as of June 17, 2013, which represents an annualized projected dividend per share of NIS 1.72 (U.S.$ 0.47)
Roni Soffer, President of Gazit-Globe: "We continued to show steady growth across our key operational metrics during the first quarter of 2013, including strong growth in our FFO and FFO per share, while we deleveraged and strengthened our balance sheet. We are pleased that credit rating agencies have recognized these improvements as demonstrated by our most recent domestic credit rating upgrade by S&P Maalot from ilA+ to ilAA-."
"We are continuously looking to enhance the quality of our portfolio through proactive management in all the countries in which we operate as well as through the acquisition and development of selective urban assets that fit our portfolio," concluded Mr. Soffer.
Financial Highlights for the first quarter 2013:
- Rental income increased by 6% to NIS 1,340 million, compared to NIS 1,259 million in the first quarter of 2012
- NOI increased by 5% to NIS 883 million, compared to NIS 840 million in the first quarter of 2012
- FFO increased by 19% to NIS 150 million, or NIS 0.90 per share, compared to NIS 126 million, or NIS 0.76 per share, in the first quarter of 2012
- Net income attributable to the Company's shareholders totaled NIS 345 million, or NIS 2.08 per share, compared to NIS 258 million, or NIS 1.51 per share, in the first quarter of 2012
- Cash flow from operating activities totaled NIS 72 million, compared to NIS 112 million in the first quarter of 2012
- Same-property NOI grew by 3.1%, resulting from an increase of 3.7% in the same-property NOI from North America, a 2.7% increase in same-property NOI from Europe and a 1.2% increase in same-property NOI from Israel
- Occupancy rate as of March 31, 2013 reached 94.7%, compared to 95.0% as of December 31, 2012 and 94.3% as March 31, 2012. Occupancy rate as of March 31, 2013 was 93.7% in North America, 96.1% in Europe and 98.6% in Israel
- The fair value gain from investment property and investment property under development was NIS 177 million compared to NIS 313 million in the first quarter of 2012
Acquisition, Development and Redevelopment Activities:
- During the quarter, the Group acquired 2 income-producing properties totaling 14 thousand square meters and adjacent land parcels for future development totaling NIS 264 million. The Group also invested NIS 365 million in development, redevelopment and expansion projects
- As of March 31, 2013, the Group had 10 properties under development with a gross leasable area of 225 thousand square meters and 25 properties under redevelopment with a gross leasable area of 288 thousand square meters with a total investment of NIS 4,486 million. The additional cost to complete the properties under development and redevelopment totals NIS 1,351 million
- During the first quarter of 2013, Citycon completed the acquisition of the Kista Galleria shopping center in Stockholm, Sweden, together with Canada Pension Plan Investment Board (CPPIB) (50%) for approximately EUR 530 million
Financing Activities:
- During the quarter, the Group raised NIS 470 million in equity and approximately NIS 1 billion in debentures and convertible debentures
- The average cost of debt during the first quarter of 2013 was 4.7% compared to 4.9% during the first quarter of 2012
- Subsequent to the quarter-end, the credit agency S&P Maalot upgraded Gazit-Globe's domestic credit rating from ilA+ to ilAA- with a stable outlook
- Subsequent to the quarter-end, Citycon received an investment grade credit rating from S&P (BBB-) and Moody's (Baa3) with a stable outlook
ACCOUNTING AND OTHER DISCLOSURES
The Company believes that publication of FFO, which is computed according to EPRA guidance, more correctly reflects the operating results of the Company, since the Company's financial statements are prepared in line with IFRS. In addition, publication of FFO provides a better basis for the comparison of the Company's operating results in a particular period with those of previous periods and also provides a uniform financial measure for comparing the Company's operating results with those published by other European property companies.
In addition, pursuant to the investment property guideline issued by the Israel Securities Authority in January 2011, FFO is to be presented in the "Description of the Company's Business" section of the annual report of investment property companies on the basis of the EPRA criteria.
As clarified in the EPRA and NAREIT position papers, the EPRA Earnings and the FFO measures do not represent cash flows from operating activities according to accepted accounting principles, nor do they reflect the cash held by a company or its ability to distribute that cash, and they are not a substitute for the reported net income. Furthermore, it is clarified that these measures are not audited by the Company's independent auditors.
CONFERENCE CALL/WEB CAST INFORMATION
Gazit-Globe will host a conference call and webcast in English on Tuesday, May 28, 2013 at 5:00 pm Israel Time/ 3:00 pm UK Time/ 10:00 am Eastern Time, to review the first quarter 2013 financial results. Shareholders, analysts and other interested parties can access the conference call by dialing 1 866 966 9439 (U.S./Canada) or 0800 694 0257 (U.K.) or +44 (0) 1452 555 566 (International) or 1 809 216 057(Israel) or on the Company's website www.gazit-globe.com.
For those unable to participate during the call, a replay will be available for future review on Gazit-Globe's website under Investor Relations.
About Gazit-Globe
Gazit-Globe is one of the largest owners and operators of supermarket-anchored shopping centers in the world. In addition, the Company is active in North America in the healthcare real estate sector. Gazit-Globe is listed on the New York Stock Exchange (NYSE:GZT) and the Tel Aviv Stock Exchange (TASE:GZT) and is included in the TA-25 and Real-Estate 15 indices in Israel. Gazit Globe owns and operates over 600 properties in more than 20 countries, with a gross leasable area of approximately 6.8 million square meters and a total value of more than $20 billion.
FOR ADDITIONAL INFORMATION
A comprehensive copy of the Company's annual report is available on Gazit-Globe website at www.gazit-globe.com
Investors Contact: IR@gazitgroup.com, Media Contact: press@gazitgroup.com
Gazit-Globe Headquarters, Tel-Aviv, Israel, Tel: +972 3 6948000 / New York Office, Tel: +1.212.897.9741
FORWARD LOOKING STATEMENTS
This release may contain forward-looking statements within the meaning of the U.S. federal securities laws. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of known and unknown risks and uncertainties, many of which are outside our control, that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks detailed in our public filings with the SEC. Except as required by law, we undertake no obligation to update any forward-looking or other statements herein, whether as a result of new information, future events or otherwise.
Below please find excerpts from our quarterly Report. For our full first quarter 2013 Financial Report in English, please go to http://www.gazitglobe.com/financial-reports.
| CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | |||
| March 31, | December 31, | ||
| 2013 | *) 2012 | 2012 | |
| NIS in millions | |||
| ASSETS | |||
| CURRENT ASSETS: | |||
| Cash and cash equivalents | 1,914 | 924 | 1,683 |
| Short-term investments and loans | 422 | 462 | 538 |
| Marketable securities at fair value through profit or loss | 65 | 202 | 87 |
| Available-for-sale financial assets | 11 | 36 | 14 |
| Financial derivatives | 96 | 90 | 81 |
| Trade receivables | 736 | 685 | 744 |
| Other accounts receivable | 275 | 286 | 216 |
| Inventory of buildings and apartments for sale | 699 | 641 | 712 |
| Income taxes receivable | 23 | 13 | 15 |
| 4,241 | 3,339 | 4,090 | |
| Assets classified as held for sale | 1,267 | 1,040 | 1,482 |
| 5,508 | 4,379 | 5,572 | |
| NON-CURRENT ASSETS | |||
| Equity-accounted investees | 5,181 | 4,633 | 4,713 |
| Other investments, loans and receivables | 739 | 340 | 713 |
| Available-for-sale financial assets | 330 | 305 | 339 |
| Financial derivatives | 1,073 | 890 | 929 |
| Investment property | 54,193 | 50,635 | 55,465 |
| Investment property under development | 2,318 | 2,782 | 2,806 |
| Non-current inventory | 23 | 23 | 23 |
| Fixed assets, net | 183 | 162 | 187 |
| Goodwill | 97 | 100 | 100 |
| Other intangible assets, net | 15 | 55 | 17 |
| Deferred taxes | 186 | 188 | 198 |
| 64,338 | 60,113 | 65,490 | |
| 69,846 | 64,492 | 71,062 | |
| *) Retrospectively adjusted due to adoption of new IFRS standards. | |||
| CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | |||
| March 31, | December 31, | ||
| 2013 | *) 2012 | 2012 | |
| NIS in millions | |||
| LIABILITIES AND EQUITY | |||
| CURRENT LIABILITIES | |||
| Credit from banks and others | 479 | 314 | 351 |
| Current maturities of non-current liabilities | 2,591 | 2,927 | 2,382 |
| Financial derivatives | 28 | 5 | 12 |
| Trade payables | 754 | 740 | 914 |
| Other accounts payable | 1,340 | 1,329 | 1,256 |
| Advances from customers and buyers of apartments | 260 | 217 | 257 |
| Income taxes payable | 35 | 54 | 52 |
| 5,487 | 5,586 | 5,224 | |
| Liabilities attributed to assets held for sale | 142 | 167 | 168 |
| 5,629 | 5,753 | 5,392 | |
| NON-CURRENT LIABILITIES | |||
| Debentures | 18,750 | 15,749 | 18,500 |
| Convertible debentures | 1,341 | 1,381 | 1,197 |
| Interest-bearing loans from financial institutions and others | 17,928 | 18,674 | 19,433 |
| Financial derivatives | 391 | 314 | 472 |
| Other financial liabilities | 355 | 281 | 346 |
| Employee benefit liability, net | 8 | 7 | 7 |
| Deferred taxes | 3,045 | 2,536 | 3,066 |
| 41,818 | 38,942 | 43,021 | |
| EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY | |||
| Share capital | 219 | 218 | 219 |
| Share premium | 3,810 | 3,787 | 3,805 |
| Retained earnings | 4,973 | 4,096 | 4,699 |
| Foreign currency translation reserve | (1,417) | (820) | (913) |
| Other reserves | 54 | 135 | 60 |
| Loans granted to purchase shares of the Company **) | -- | -- | -- |
| Treasury shares | (21) | (21) | (21) |
| 7,618 | 7,395 | 7,849 | |
| Non-controlling interests | 14,781 | 12,402 | 14,800 |
| Total equity | 22,399 | 19,797 | 22,649 |
| 69,846 | 64,492 | 71,062 | |
| *) Retrospectively adjusted due to adoption of new IFRS standards. | |||
| **) Represents an amount of less than NIS 1 million. | |||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||
|
Three months ended March 31, |
Year ended December 31, |
||
| 2013 | *) 2012 | 2012 | |
| NIS in millions (except for per share data) | |||
| Rental income | 1,340 | 1,259 | 5,249 |
| Property operating expenses | 457 | 419 | 1,705 |
| Net operating rental income | 883 | 840 | 3,544 |
| Revenues from sale of buildings, land and construction works performed | 427 | 476 | 1,749 |
| Cost of buildings sold, land and construction works performed | 396 | 455 | 1,665 |
| Gross profit from sale of buildings, land and construction works performed | 31 | 21 | 84 |
| Gross profit | 914 | 861 | 3,628 |
| Fair value gain from investment property and investment property under development, net | 177 | 313 | 1,913 |
| General and administrative expenses | (147) | (162) | (648) |
| Other income | 5 | 90 | 164 |
| Other expenses | (17) | (5) | (47) |
| Company's share in earnings of equity- accounted investees, net | 58 | 80 | 299 |
| Operating income | 990 | 1,177 | 5,309 |
| Finance expenses | (477) | (506) | (2,214) |
| Finance income | 213 | 26 | 120 |
| Profit before taxes on income | 726 | 697 | 3,215 |
| Taxes on income | 74 | 132 | 681 |
| Net income | 652 | 565 | 2,534 |
| Attributable to: | |||
| Equity holders of the Company | 345 | 258 | 957 |
| Non-controlling interests | 307 | 307 | 1,577 |
| 652 | 565 | 2,534 | |
| Net earnings per share attributable to equity holders of the Company (NIS): | |||
| Basic net earnings | 2.09 | 1.57 | 5.80 |
| Diluted net earnings | 2.08 | 1.51 | 5.59 |
| *) Retrospectively adjusted due to adoption of new IFRS standards. | |||
| FFO (EPRA Earnings) | |||
| The table below presents the calculation of the Company's FFO, computed according to the directives of EPRA and the guidelines of the Israel Securities Authority, and its FFO per share for the stated periods: | |||
|
For the 3 months ended March 31 |
For the year ended December 31 |
||
| 2013 | *) 2012 | 2012 | |
| NIS in millions (other than per share data) | |||
| Net income attributable to equity holders of the Company for the period | 345 | 258 | 957 |
| Adjustments: | |||
| Fair value gain from investment property and investment property under development, net | (177) | (313) | (1,913) |
| Capital loss on sale of investment property and investment property under development | 13 | 2 | 5 |
| Changes in the fair value of financial instruments including derivatives, measured at fair value through profit or loss | (189) | 20 | (36) |
| Adjustments with respect to equity-accounted investees | (6) | 1 | (43) |
| Loss from decrease in interest in investees | -- | -- | 4 |
| Deferred taxes and current taxes with respect to disposal of properties | 65 | 127 | 668 |
| Gain from bargain purchase | -- | (82) | (134) |
| Acquisition costs recognized in profit or loss | 4 | 3 | 26 |
| Loss from early redemption of interest-bearing liabilities | 3 | 4 | 147 |
| Non-controlling interests' share in above adjustments | 62 | 109 | 685 |
| Nominal FFO | 120 | 129 | 366 |
| Additional adjustments: | |||
| CPI and exchange rates linkage differences | 3 | 2 | 94 |
| Depreciation and amortization | 4 | 3 | 16 |
| Adjustments with respect to equity-accounted investees | 15 | (20) | 2 |
| Other adjustments1 | 8 | 12 | 55 |
| FFO according to the management approach | 150 | 126 | 533 |
| Basic FFO according to the management approach per share (in NIS) | 0.90 | 0.77 | 3.23 |
| Diluted FFO according to the management approach per share (in NIS) | 0.90 | 0.76 | 3.23 |
| Number of shares used in the basic FFO calculation2 (in thousands) | 165,313 | 164,821 | 164,912 |
| Number of shares used in the diluted FFO calculation (in thousands) | 165,530 | 165,065 | 165,016 |
| *) Retrospectively adjusted due to the adoption of new IFRS standards. | |||
| 1 Income and expenses adjusted against the net income for the purpose of calculating FFO, which include expenses from extra-ordinary legal proceedings not related to the reporting periods, expenses arising from one-time payments relating to the termination of engagements with senior Group officers and also income and expenses from operations not related to income-producing property. | |||
| 2 Number of issued shares (weighted average for the period) | |||