- ISIN PAL0605071A3
Gazit-Globe
Gazit-Globe Reports Year-End and Fourth Quarter 2014 Financial Results
DGAP-News: Gazit-Globe
2015-03-24 / 10:37
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Gazit-Globe Reports Year-End and Fourth Quarter 2014 Financial Results
Gazit-Globe completes a year of significant improvements to its portfolio with
investments in the Group totaling NIS 4.5 billion and divestment of non-core
assets totaling NIS 3.1 billion
FFO grew by 2% to NIS 598 million; Net debt to total assets (LTV) declined to
51.0%
TEL-AVIV, Israel, March 24, 2015 (GLOBE NEWSWIRE) -- Gazit-Globe (NYSE:GZT)
(TSX:GZT) (TASE:GZT), one of the world's leading multi-national real estate
companies focused on the management, acquisition, development and redevelopment
of supermarket-anchored shopping centers in major urban markets, announced
today its financial results for the year and the fourth quarter ended December
31, 2014.
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:
-- The total assets managed by the Group amounted to approximately NIS 80
billion (US$ 20.6 billion) with total equity (including minority interests
and the consolidation of Atrium) of NIS 32 billion (US$ 8.2 billion), and
yearly rental income from all the properties managed by the Group totaled
approximately NIS 7 billion (US$ 1.8 billion).
-- NOI for the year decreased by 4% to NIS 3,329 million (US$ 856 million)
compared to NIS 3,457 million (US$ 889 million) in 2013. Excluding the
effect of changes in exchange rates, NOI remained stable compared to 2013
-- FFO for the year increased by 2% to NIS 598 million (US$ 154 million), or
NIS 3.39 per share (US$ 0.87 per share), compared to NIS 585 million (US$
150 million), or NIS 3.41 per share (US$ 0.88 per share), in 2013. The
number of shares grew by 3% between the periods. Excluding the effect of
changes in exchange rates, FFO increased by 8% and FFO per share increased
by 5% compared to 2013
-- Investments during the year totaled NIS 3.3 billion (US$ 0.85 billion), the
group also recycled capital from the divestment of non-core assets in the
amount of NIS 2.7 billion (US$ 0.69 billion). Assuming consolidation of
jointly controlled companies that are presented according to the equity
method, total investments amounted to NIS 4.5 billion (US$ 1.16 billion),
and divestment of non-core assets totaled NIS 3.1 billion (US$ 0.80
billion)
-- Same Property NOI for the year, excluding the effect of changes in exchange
rates, grew by 1.7% compared to 2013
-- Occupancy rate as of December 31, 2014 was 95.9%, compared to an occupancy
rate of 95.0% as of December 31, 2013
-- Shareholders' equity as of December 31, 2014 totaled NIS 8,023 million (US$
2,063 million), or NIS 45.0 per share (US$ 11.58 per share), compared to
NIS 7,802 million (US$ 2,006 million), or NIS 44.4 per share (US$ 11.42 per
share), as of December 31, 2013 and after a dividend distribution of NIS
1.80 per share (US$ 11.58 per share) in 2014
-- EPRA NAV per share as of December 31, 2014 was NIS 60.2 (US$ 15.48)
compared to NIS 57.9 per share (US$ 14.89) as of December 31, 2013, after
dividend distribution as mentioned above
-- As of December 31, 2014, the Group had liquid assets and unutilized
revolving credit facilities in the amount of NIS 11.5 billion (US$ 2.96
billion) of which NIS 3.7 billion (US$ 0.95 billion) is at the Company
level. A jointly controlled company has an additional NIS 2.0 billion (US$
0.51 billion) in cash
-- As of December 31, 2014, net debt to total assets (LTV) was 51.0%, compared
to 55.1% as of December 31, 2013
-- The Company declared a quarterly cash dividend of NIS 0.46 per share
payable on April 14, 2015 to shareholders of record as of April 7, 2015,
which represents an annualized dividend per share of NIS 1.84. The dividend
policy for 2015 is a minimum quarterly dividend payment of NIS 0.46 per
share, representing an increase of 2.2% over the 2014 dividend
Roni Soffer, President of Gazit-Globe: '2014 was a very active year and the
Group successfully executed its integrated business strategy. Most notably, we
saw continued focus and improvement on the portfoliovia capital recycling of
non-core assets as well as investment in prime assets in urban areas
characterized by low risk and high growth potential. The Group is currently in
the midst of developing and redeveloping properties totaling NIS 6.5 billion.
We expect the potential cash flow from these activities to be reflected in our
results over the next few years. The Group also raised both equity and debt,
increasing its total liquidity to NIS 13.5 billion, and simultaneously
continued to deleverage with its LTV declining to 51.0%.'
Exchange rate as of December 31, 2014 of 1 USD = 3.889 NIS
Financial Highlights for 2014:
-- Rental income decreased by 5% to NIS 4,913 million compared to NIS 5,146
million in 2013. The decrease is mainly a result of the decrease in average
exchange rates of the US Dollar, Canadian Dollar and Euro against the NIS
as well as asset sales during the year 2013 and 2014 in the amount of NIS
5.4 billion. The decrease was offset by income from properties whose
development has been completed, income from the operation of additional
assets acquired during 2013 and 2014 and an increase of income from
existing assets. Excluding the effect of changes in exchange rates, rental
income decreased by 1% compared to 2013
-- NOI for the year decreased by 4% to NIS 3,329 million compared to NIS 3,457
million in 2013. Excluding the effect of changes in exchange rates, NOI
remained stable compared to 2013
-- Same-property NOI, excluding the effect of changes in exchange rates, grew
by 1.7%, resulting from an increase of 2.9% in the same-property NOI from
North America, a 0.5% increase in same-property NOI from Europe and a 2.3%
increase in same-property NOI from Israel
-- FFO for the year increased by 2% to NIS 598 million, or NIS 3.39 per share,
compared to NIS 585 million, or NIS 3.41 per share, in 2013. The number of
shares grew by 3% between the periods. Excluding the effect of changes in
exchange rates, FFO increased by 8% and FFO per share increased by 5%
compared to 2013.
-- Net income attributable to the Company's shareholders for the year totaled
NIS 73 million, or NIS 0.39 per share, compared to NIS 927 million, or NIS
5.35 per share, in 2013. The decrease in net income is mainly driven from
an accounting loss resulting from marking-to-market financial derivatives
(mostly currency swaps) in the amount of NIS 190 million compared to a net
income of NIS 431 million in 2013, a loss of NIS 154 resulting from early
repayment of loans and a loss in the amount of NIS 146 million (Company's
share) due to losses in Dori Construction.
-- Occupancy rate as of December 31, 2014 increased to 95.9% from 95.0% as of
December 31, 2013. Occupancy rate as of December 31, 2013 was 95.6% in
North America, 96.5% in Europe and 97.5% in Israel
-- The fair value gain from investment property and investment property under
development was NIS 1,053 million compared to NIS 962 million in 2013
-- Shareholders' equity as of December 31, 2014 totaled NIS 8,023 million, or
NIS 45.0 per share, compared to NIS 7,802 million, or NIS 44.4 per share,
as of December 31, 2013 and after a dividend distribution of NIS 1.80 per
share in 2014.
-- Cash flow from operating activities totaled NIS 1,026 million, compared to
NIS 1,189 million in 2013. The decrease in cash flow from operating
activities is primarily due to higher negative cash flow in its
construction activity in 2014.
Financial Highlights for the three months ended December 31, 2014:
-- Rental income decreased by 1% to NIS 1,259 million compared to NIS 1,269
million in the same quarter last year. The decrease mainly results from
asset sales during 2014 in the amount of NIS 2.7 billion. The decrease was
offset by income from properties whose development has been completed,
income from the operation of additional assets acquired during 2014 and an
increase of income from existing assets.
-- NOI for the quarter decreased by 2% to NIS 840 million compared to NIS 855
million in the same quarter last year. The decrease is mainly a result of
asset sales during 2014.
-- FFO for the quarter decreased by 8% to NIS 135 million, or NIS 0.76 per
share, compared to NIS 147 million, or NIS 0.84 per share, in same quarter
last year. The number of shares grew by 1% between the periods.
-- Loss attributable to the Company's shareholders totaled NIS 217 million, or
NIS 1.25 per share, compared to net income of NIS 224 million, or NIS 1.27
per share, in the same quarter last year. The loss mainly derives from an
accounting loss resulting from marking-to-market financial derivatives
(mostly currency swaps) in the amount of NIS 338 million compared to a net
income of NIS 142 million in the same quarter last year.
-- The fair value gain from investment property and investment property under
development was NIS 699 million compared to NIS 436 million in the same
quarter last year.
-- Cash flow from operating activities totaled NIS 304 million, compared to
NIS 639 million in the fourth quarter 2013. The decrease in cash flow is
derived from timing differences between the periods as well as the
termination of currency transaction SWAPs in the fourth quarter of 2013
Acquisition, Development, Redevelopment and Capital Recycling Activities:
-- During 2014, the Group invested NIS 3.3 billion, including 5
income-producing properties totaling 81 thousand square meters and adjacent
land parcels for future development for a total amount of NIS 1.6 billion
as well as NIS 1.7 billion in new development and redevelopment projects.
Atrium also acquired 2 assets in Poland and the Czech Republic in a total
amount of Euro 205 million (NIS 1.0 billion)
-- As of December 31, 2014, the Group had 10 properties under development with
a gross leasable area of 226 thousand square meters and a total investment
of NIS 2.0 billion, and 24 properties under redevelopment with a gross
leasable area of 374 thousand square meters and a total investment of NIS
4.5 billion. The additional cost to complete the properties under
development and redevelopment totals NIS 2.5 billion
-- During 2014, the group sold non-core properties for a total amount of NIS
2.7 billion. (Assuming consolidation of jointly controlled companies that
are presented according to the equity method, divestiture of non-core
assets totaled NIS 3.1 billion)
-- During 2014, Gazit-Globe's wholly owned subsidiary, Gazit Brasil, invested
a total of R$ 291 million (NIS 450 million) in the acquisition of a new
asset, increasing its share in an existing asset, and in development
activities. Subsequent to the year end, Gazit Brasil invested R$ 200 (NIS
290 million) in the acquisition of an additional asset.
-- During 2014, ProMed Properties sold 12 medical office building for $405
million pre-tax and transaction costs. Subsequent to the quarter end,
ProMed sold 2 additional medical office buildings for $ 28.5 million.
-- During 2014, Gazit-Globe's wholly owned subsidiary, Gazit Germany, sold
three properties for Euro 92 million.
-- Subsequent to the quarter end Gazit-Globe acquired 52.1 million ordinary
shares of Atrium European Real Estate Limited ('ATR') representing
approximately 13.9% of ATR's issued share capital and voting rights. The
shares were acquired from a consortium managed by CPI CEE Management LLC,
at a price of EUR 4.40 per share, for a total consideration of
approximately EUR 229 million in an off-market transaction. With the
closing of the transaction Gazit-Globe became the sole controlling
shareholder of Atrium.
-- Subsequent to the quarter end, Gazit-Globe entered into an engagement
letter with an investment bank to examine strategic alternatives regarding
Gazit Development's income-producing properties and land for development or
the holdings of the Company in Gazit Development.
Financing Activities:
-- During 2014, the Group raised NIS 2.5 billion in equity. In addition, the
Group raised approximately NIS 3.8 billion through debenture offerings.
Also, a joint controlled company (Atrium) raised Euro 350 million
(approximately NIS 1.6 billion) through debenture offerings with an average
duration of 9.8 years and a yield to maturity of 3.52%.
-- The average cost of debt during 2014 was 4.8%, compared to 4.9% in 2013.
The Company declared a quarterly cash dividend of NIS 0.46 per share payable on
April 14, 2015 to shareholders of record as of April 7, 2015, which represents
an annualized dividend per share of NIS 1.84.
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,
March 24, 2015 at 5:00 pm Israel Time / 4:00 pm Central European Time / 11:00
am Eastern Time, to review the fourth quarter and year-end 2014 financial
results. Shareholders, analysts and other interested parties can access the
conference call by dialing 1877 280 2342 (U.S./Canada) or 0800 279 5736 (U.K.)
or +44 (0) 20 3427 0503 (International) or 1809 212 925 (Israel), or on the
Company's website www.gazit-globe.com. (Conference ID 7312231)
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, developers and operators of
predominantly supermarket-anchored shopping centers in major urban markets
around the world. Gazit-Globe is listed on the New York Stock Exchange
(NYSE:GZT), the Toronto Stock Exchange (TSX: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 524 properties in more than 20 countries,
with a gross leasable area of approximately 6.3 million square meters and a
total value of approximately US$ 21 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
applicable securities laws. In the United States, 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 and
the Canadian Securities Administrators. Except as required by applicable 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 2014 Annual Report. For our full 2014
Annual Report in English, please go to
http://www.gazitglobe.com/financial-reports.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
----------------------------------------------------------------
December 31,
----------------
2014 2013
----------------
NIS in millions
----------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents 650 1,018
Short-term investments and loans 368 504
Marketable securities 299 100
Financial derivatives 90 39
Trade receivables 536 689
Other accounts receivable 303 302
Inventory of buildings and apartments for sale 588 692
Income taxes receivable 14 19
----------------
2,848 3,363
Assets classified as held for sale 1,046 611
----------------
3,894 3,974
----------------
NON-CURRENT ASSETS
Equity-accounted investees 6,213 5,907
Other investments, loans and receivables 564 659
Available-for-sale financial assets 383 435
Financial derivatives 288 769
Investment property 56,646 53,309
Investment property under development 1,642 2,479
Non-current inventory 2 23
Fixed assets, net 171 160
Intangible assets, net 103 106
Deferred taxes 78 106
----------------
66,090 63,953
----------------
69,984 67,927
================
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
--------------------------------------------------------------------------------
December 31,
-----------------
2014 2013
-----------------
NIS in millions
-----------------
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Credit from banks and others 553 257
Current maturities of non-current liabilities 2,711 2,914
Financial derivatives 59 32
Trade payables 900 940
Other accounts payable 1,262 1,272
Advances from customers and buyers of apartments 304 267
Income taxes payable 74 32
-----------------
5,863 5,714
Liabilities attributed to assets held for sale 110 73
-----------------
5,973 5,787
-----------------
NON-CURRENT LIABILITIES
Debentures 24,433 22,231
Convertible debentures 1,254 1,221
Interest-bearing loans from financial institutions and others 8,552 12,692
Financial derivatives 94 169
Other financial liabilities 190 198
Deferred taxes 3,618 3,276
-----------------
38,141 39,787
-----------------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
Share capital 232 229
Share premium 4,411 4,288
Retained earnings 4,915 5,160
Foreign currency translation reserve (1,641) (2,000)
Other reserves 127 146
Loans granted to purchase shares of the Company's shares *) -- --
Treasury shares (21) (21)
-----------------
8,023 7,802
Non-controlling interests 17,847 14,551
-----------------
Total equity 25,870 22,353
-----------------
69,984 67,927
=================
*) Represents an amount of less than NIS 1 million.
CONSOLIDATED STATEMENTS OF INCOME
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-
Year ended
December 31,
--------------------------
2014 2013 2012
--------------------------
NIS in millions
--------------------------
--------------------------
Rental income 4,913 5,146 5,249
Property operating expenses 1,584 1,689 1,705
--------------------------
Net operating rental income 3,329 3,457 3,544
--------------------------
Revenues from sale of buildings, land and 1,357 1,672 1,760
construction works performed
Cost of buildings sold, land and construction works 1,660 1,688 1,720
performed
--------------------------
Gross profit (loss) from sale of buildings, land and (303) (16) 40
construction works performed
--------------------------
Total gross profit 3,026 3,441 3,584
--------------------------
Fair value gain from investment property and 1,053 962 1,938
investment property under development, net
General and administrative expenses (619) (610) (673)
Other income 55 218 164
Other expenses (81) (74) (47)
Company's share in earnings of equity-accounted 12 149 299
investees, net
--------------------------
Operating income 3,446 4,086 5,265
Finance expenses (2,115) (2,185) (2,214)
Finance income 157 549 120
--------------------------
Income before taxes on income 1,488 2,450 3,171
Taxes on income 405 265 758
--------------------------
Net income 1,083 2,185 2,413
==========================
Attributable to:
Equity holders of the Company 73 927 901
Non-controlling interests 1,010 1,258 1,512
--------------------------
1,083 2,185 2,413
==========================
Net earnings per share attributable to equity holders
of the Company:
Basic net earnings 0.41 5.41 5.46
==========================
Diluted net earnings 0.39 5.35 5.25
==========================
FFO (EPRA Earnings)
The table below presents the calculation of the Company's FFO, calculated
according to the recommendations of EPRA and the guidelines of the Israel
Securities Authority, and its FFO per share for the stated periods:
For the year For the 3 months
ended December 31 ended December
31
--------------------------------------------
2014 2013 2012 2014 2013
--------------------------------------------
NIS in millions (other than per share data)
--------------------------------------------
Net income (loss) attributable to 73 927 901 (217) 224
equity holders of the Company for
the period
--------------------------------------------
Adjustments:
Fair value gain from investment (1,053) (962) (1,938) (699) (436)
property and investment property
under development, net
Capital loss on sale of investment 65 52 5 17 13
property
Changes in the fair value of 156 (435) (36) 312 (143)
financial instruments, including
derivatives, measured at fair
value through profit or loss
Adjustments with respect to 324 60 (43) 249 54
equity-accounted investees
Loss from decrease in interest in 1 11 4 -- 1
investees
Deferred taxes and current taxes 399 262 752 154 110
with respect to disposal of
properties
Gain from bargain purchase (47) (173) (134) (47) --
Acquisition costs recognized in 6 10 26 1 5
profit or loss
Loss (gain) from early redemption 154 142 147 19 (3)
of interest-bearing liabilities
and financial derivatives
Non-controlling interests' share in 267 375 643 273 257
above adjustments
--------------------------------------------
Nominal FFO 345 269 327 62 82
============================================
Additional adjustments:
CPI and exchange rate linkage (5) 152 94 (18) (11)
differences
Depreciation and amortization 13 16 16 3 4
Adjustments with respect to (3) 27 2 13 13
equity-accounted investees
Other adjustments(1) 248 121 94 75 59
--------------------------------------------
FFO according to the management 598 585 533 135 147
approach
============================================
FFO according to the management 3.39 3.42 3.23 0.76 0.84
approach per share (in NIS)
============================================
FFO according to the management 3.39 3.41 3.23 0.76 0.84
approach per share (diluted) (in
NIS)
============================================
Number of shares used in the basic 176,459 171,103 164,912 178,102 175,787
FFO per share calculation (in
thousands)(2)
============================================
Number of shares used in the 176,546 171,413 165,016 178,190 176,092
diluted FFO per share calculation
(in thousands)(2)
============================================
1. Income and expenses adjusted against the net income for the purpose of
calculating FFO, which include the adjustment of expenses and income from
extraordinary legal proceedings not related to the Reporting Periods, expenses
due to non-recurring payments relating to the termination of engagements with
senior Group officers, as well as income and expenses from operations not
related to income-producing property (including the results of Dori Group) and
internal leasing costs (mainly salary) incurred in the leasing of properties.
2. Weighted average for the period.
News Source: NASDAQ OMX
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2015-03-24 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Gazit-Globe
Panama
ISIN: PAL0605071A3
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