ZUG ESTATES HOLDING AG
EQS Group-Ad-hoc: Zug Estates Holding AG / Key word(s): Half Year Results/Real Estate Ad hoc press release pursuant to article 53 Listing Rules
Zug Estates generated extremely solid overall results in the first half of 2021. The impact of the COVID-19 pandemic is still clearly evident in the hotel & catering segment. The first half of 2021 continued to be influenced by the impact of the COVID-19 pandemic. The next government-imposed lockdown forced a great many of our catering and retail tenants to temporarily close their businesses. In the hotel & catering segment, the mandated closures of catering services as well as the substantial decline in international business travel caused sales to plummet. Fortunately, this lockdown was less restrictive than it had been in the previous year. Our tenants additionally benefited from ongoing government support measures. Property income rose further, especially as a result of rent increases from rental agreements that had been concluded in previous years. The first half of the year also featured the successful sale of the property at Hofstrasse 1a/b in Zug. Net income was up CHF 24.4 million to CHF 32.7 million in the first half of 2021, mainly as a result of sales and revaluation effects. After adjustment for revaluation and special effects, net profit rose 29.6%, from CHF 11.9 million to CHF 15.4 million. Increase in net income as a result of higher property income Restrictions in international business travel as well as the catering industry's second lockdown caused income generated by the hotel & catering segment to decline by CHF 1.0 million, from CHF 3.6 million to CHF 2.6 million. Robust demand for our serviced city apartments as well as strict cost management caused gross operating profit (GOP) to increase slightly to 8.1% (previous year: 7.8%). In addition, the economic losses were mitigated somewhat by the one-off payment of a non-returnable COVID-19 grant in the amount of CHF 2.1 million. The sale of the last property outside our two sites resulted in a gain on sale before tax of CHF 7.3 million. No investment properties had been sold in the previous year. The sale of the last condominium apartments in the Aglaya project in Rotkreuz, however, resulted in a promotional profit before tax of CHF 9.5 million in the first half of 2020. As expected, operating revenue declined from CHF 105.4 million to CHF 36.1 million due to the absence of revenue generated through the sale of promotional properties. A lower level of borrowing costs eligible for capitalisation led to a slightly higher negative financial result of CHF 3.7 million (previous year: CHF 3.5 million) with the average interest rate on interest-bearing debt unchanged at 1.3%.
Portfolio value up slightly at a somewhat lower vacancy rate Last year's completion of building S6 on the Suurstoffi site caused the vacancy rate to increase to 5.0% as at 31 December 2020. The vacancy rate as at 30 June 2021 remained nearly unchanged at 4.8%, which is primarily attributable to initial vacancies in the Suurstoffi building. After adjustment for initial vacancies, the vacancy rate declined from 1.5% as at 31 December 2020 to 1.3% as at 30 June 2021. The weighted average unexpired lease term (WAULT) of 6.5 years (6.8 years as at 31 December 2020) came to rest at a very high level for the industry. Demand for both residential products as well as the retail and catering spaces in our portfolio remains high. The first half of 2021 saw new leases concluded with Orell Füssli Thalia AG and McOptic (Switzerland) AG for retail space at the Metalli complex, for example, as well as a new lease for space at the Suurstoffi site, which will be used for a catering business. We are seeing a certain amount of restraint with respect to office space, particularly when it comes to leases for large office facilities. Lease extensions or new leases were signed for a total of around 1'500 m2 in office space during the period under review. Additionally, Novartis Pharma Schweiz AG opted to remain at the Rotkreuz location long term and signed a lease renewal agreement for a smaller office space of around 4'800 m2 and a term that extends until at least 31 December 2027. The remaining office space of 3'700 m2 will become vacant at the start of 2023 and has a very high-quality fit-out. Solid equity ratio Project development with a focus on the Metalli Living Space One major aspect of the Metalli Living Space development project is to breathe life into the City Center site. The goal is to preserve the tried-and-true elements of the space while also creating space for many new ones. New uses and concepts are already being implemented in line with this basic idea. From May to October 2021, the Secret Garden pop-up restaurant will add new life to the catering spaces in the City Garden, while the Miss Miu Korean-themed restaurant in the Metalli complex opened its doors in August 2021 and the ZugSPORTS festival was also held in August. Work on the construction project for the last two buildings (S43/45) on the Suurstoffi site in Rotkreuz has been stepped up in the past few months. The project has already been approved for construction. Once all planning work has been finished, the decision about when to start construction will be reached taking demand and current market trends into consideration. Systematic implementation of the sustainability strategy Zug Estates' sustainability strategy not only focuses on reducing carbon emissions and optimising its energy consumption, but also has the Group pursuing projects and goals related to materials, biodiversity and water. Apart from these environmental issues, the areas of social and corporate responsibility are also becoming increasingly important, which is why Zug Estates will be publishing its first sustainability report in accordance with GRI standards in September 2021.
Positive outlook for 2021 Despite the persistently high level of uncertainty regarding forecasts on the performance of the hotel & catering segment, the non-returnable COVID-19 grants already received suggest that both sales and GOP will be higher year-on-year. For the 2021 financial year, we expect operating income before depreciation and revaluation to be lower year over year due to the absence of the special effect from the sale of the Aglaya apartments. We expect net income excluding revaluation and special effects to be higher year-on-year. Report from 27 August 2021 A video conference will be held in German at 10:30 a.m. today. CEO Patrik Stillhart and CFO Mirko Käppeli will present the half-year results 2021 and answer questions afterwards. The corresponding presentation will be available on our website as of 10:00 a.m.: https://www.zugestates.ch/en/mn/downloads.html Please register for the conference using the link provided below. We look forward to your attendance. https://www.zugestates.ch/investor-relations/berichterstattung.html Downloads: Press release (PDF) Important dates:
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About Zug Estates Zug Estates Holding AG is listed on the SIX Swiss Exchange, Zurich, (ticker symbol: ZUGN; securities number: 14 805 212). Zug Estates Holding AG | Industriestrasse 12 | CH-6300 Zug | T +41 41 729 10 10 | www.zugestates.ch End of ad hoc announcement |
| Language: | English |
| Company: | Zug Estates Holding AG |
| Industriestrasse 12 | |
| 6300 Zug | |
| Switzerland | |
| Phone: | +41 41 729 10 10 |
| E-mail: | ir@zugestates.ch |
| Internet: | www.zugestates.ch |
| ISIN: | CH0148052126, CH0148052118 |
| Valor: | A1J0M6 |
| Listed: | SIX Swiss Exchange |
| EQS News ID: | 1229305 |
| End of Announcement | EQS Group News Service |
1229305 27-Aug-2021 CET/CEST
