VIB Vermögen AG publishes preliminary figures for fiscal year 2008

VIB Vermögen AG, a company specializing in managing commercial real estate, has recorded significant growth in its operating business according to preliminary figures. In its core real estate business, the company increased its operating income (IFRS) to € 42.5 million compared to € 26.7 in the previous year. This corresponds to a 59.2% increase in real estate income.

In addition to the increase in its operating business, the first-time full consolidation of BBI Bürgerliches Brauhaus Immobilien AG (BBI Immobilien AG) contributed to the increase in operating income. At the same time, as part of the consolidation, this company’s wholly owned subsidiary Herrnbräu GmbH & Co. KG, a long-standing brewery company located in Ingolstadt, was included in VIB Vermögen AG’s consolidated financial statements. As a result, the VIB Group’s operating income totaled around € 57.0 million. At the same time a comparison with previous year’s figures is only of limited use due to the altered recording of the participation on the balance sheet.

VIB Vermögen AG also recorded a further improvement in EBIT. If earnings are adjusted for the Beverages segment, the core business of property management recorded EBIT of € 28.1 million (previous year: € 20.1 million). This corresponds to growth of 39.8% in the real estate segment. Including the figures from the Beverages segment, EBIT increased by 17.9% at a group level to € 23.7 million. This includes extraordinary depreciation of Herrnbräu GmbH & Co. KG’s assets of around € 5 million. These were due to the current difficult market for the beverages industry.

VIB Vermögen AG recorded write-downs of € 7.1 million on its real estate portfolio. At the same time, the company recorded development results of € 6.6 million from its own property development activities. This resulted in a valuation loss of around € -0.5 million in the real estate segment. The total valuation loss at a group level totaled €
-6.5 million.

Total personnel expenses in the real estate sector totaled € 1.58 million, or 3.71% of operating income in this sector.

EBT after valuations in the real estate sector totaled € 11.2 million. Despite the negative one-off factors in the valuation result, VIB Vermögen AG thus recorded earnings for group shareholders of € 5.4 million (previous year: € 12.4 million) after the deduction of the financial result and income taxes. This corresponds to earnings per share of € 0.31 (previous year: € 0.73).

The Managing Board members Ludwig Schlosser and Peter Schropp were pleased with fiscal year 2008: "2008 was a great success in our operating activates. VIB Vermögen continues to have high income, as underscored by our funds from operations (FFO) after effective income taxes of € 0.67 per share (previous year: € 0.60). That is why we want to allow our shareholders to once again participate in our success and we are proposing an unchanged dividend of € 0.20 per share to our General Meeting.

In view of the company’s further growth, the Managing Board is confident – despite the current economic slowdown: “We increased our real estate portfolio a lot last year, thus significantly growing our rental income. Our investment properties totaled € 561.3 million on December 31, 2008. We will be able increase our rental income in 2009 substantially thanks to our investments.” In addition, the Managing Board also noted the portfolio’s stable tenant structure. This is coupled with an excellent structure and weighting of the various types of use and various industries. As a result, VIB Vermögen AG currently has a broadly diversified portfolio in terms of risks, with a total rental area of 618,000 m². “Our portfolio has very low vacancy rates of less than 1% - and at the same time the rental agreements have an average remaining term of 8.3 years.”

In financing its real estate portfolio, VIB Vermögen AG as primarily agreed long-term annuity loans, which means that loan extensions or refinancing is only required to a minor extent. “In contrast to many other companies, our credit agreements do not include covenant agreements – which means we do not have any financing risks given the current market environment,” commented Ludwig Schlosser. The fixed interest rate periods are also long-term. Just about one quarter of the loans have a remaining fixed interest period of less than one year. Two thirds of the liabilities have fixed interest periods of five to ten years. This means that changes in the interest rate would only have a marginal impact on the company’s financial result. The average interest rate for all of the loans is currently 4.8%. In addition, the loan to value ratio of 65.6% clearly shows VIB Vermögen AG’s healthy financing structure.

The Managing Board believes that this financial solidity is a key competitive advantage given the current environment: “Our solid financing is our tower of strength. In the current fiscal year, interest expenses of around € 20 million are offset by anticipated rental income of € 43 million – this ratio clearly shows VIB Vermögen AG’s earnings strength and stability."

The company will present its final figures for the year in its 2008 annual report. This report can be downloaded from the company’s Web site, www.vib-ag.de from
April 29, 2009

source : VIB Vermögen AG