FRANKFURT (dpa-AFX) - Higher interest charges, as well as increased costs and write-downs, put a heavy squeeze on profits at real estate group Dic Asset last year. The net income attributable to shareholders fell by almost half to 31 million euros, as the company announced on Wednesday. Already on Tuesday evening, the annual report was available on the website of the company, which specializes in commercial real estate. Net rental income, on the other hand, increased by around two-thirds to 152 million euros, driven in part by the acquisition of logistics real estate specialist VIB. Dic had already presented the key figures for the operating business in the past year and the forecast for 2023 at the end of January. The share price fell slightly in early share trading.

For 2023, management expects a decline in earnings due to the difficult market conditions. Given the changed interest rate environment and the still unclear impact of a weaker economy on real estate demand in Germany, delays in acquisitions and sales are to be expected, especially in the first half of the year, it said.

For the current year, the commercial real estate group is therefore targeting an operating profit, measured in terms of so-called funds from operation (FFO), which excludes, for example, depreciation and amortization, gains or losses on sales and other one-off effects, of 90 and 97 million euros.

In the current year, Dic plans to sell properties with a volume of around 400 to 700 million euros. Despite the planned sales, gross rental income is expected to rise from 176 million euros in the previous year to 185 to 195 million euros. At the same time, the company expects lower income from real estate management. These are expected to decline from around 88 million to 70 to 80 million euros.

Analyst Philipp Kaiser of Warburg Research expects a subdued start to the year on the transaction market. He says inflation remains high and interest rates should continue to rise for the time being. The focus in 2023 should be on deleveraging, Kaiser said. Asset sales, however, are likely to prove quite difficult during the year.Dic, however, is well positioned to come through these times relatively unscathed, he said.

Analyst Andre Remke of Baader Bank also believes that property sales will be crucial this year in terms of deleveraging in a weak transaction market. He added that Dic's final figures confirmed its preliminary results and cautious outlook for the full year 2023.

Last year, operating profit picked up seven percent to 114 million euros, as previously announced in 2022. This was at the lower end of the range of 114 million to 117 million euros, which had been revised downward in November. Assets under management reportedly rose to a high of 14.7 billion euros. Dic Assets plans to pay its shareholders a dividend for the past year at the previous year's level of 0.75 euros per share. Last year, Dic had secured a majority stake in VIB Vermögen./mne/zb/lew