results 2018: Solid operational results, but retail property market values declining

For the year 2018, Wereldhave posted a net result of € -55.6m, against € 84.3m for 2017.

The direct result decreased by 2.3% from € 150.1m to € 146.7m, or € 3.33 per share, which is in line with the earlier guidance of € 3.30 – € 3.35. (FY 2017: € 3.43). The full year indirect result stood at € -202.3m (2017: € -65.8m).

The net rental income from continued operations decreased by 0.5% from € 167.3m to € 166.4m. This can mainly be attributed to property disposals and lower rental income in France, which were partly compensated by additional rental income from developments that were taken into operation. Net rental income Finland is accounted for as discontinued operations. General costs for 2018 of € 13.8m (excluding customer journey expenses) were 13% lower than in 2017 (€ 15.9m). This decrease is mainly due to the reorganisation in 2017 and subsequent cost savings in the Netherlands.

The indirect result amounted to € -202.3m, of which € -100.7m from the discontinued operations in Finland (H1 2018: € -18.3m). The indirect result reflects the reduced investor appetite for shopping centres. There were negative revaluations of € -33.8m in France (H1 2018: € -4.1m) and € -59.4m in the Netherlands (H1 2018: € -25.9m). In Belgium, property values remained stable with a modest € -1.3m revaluation (H1 2018: +3.3m).

In 2018, there were property acquisitions to the amount of € 73m and disposals amounting to € 606m. By far the largest transaction was the disposal of Itis, which was completed mid December. The net price for the shopping centre including the deferred tax liability amounts to € 450m. This reflects a gross price of € 516 million.

The loan-to-value improved to a healthy 37.5% at December 31, 2018 (2017: 40.7%).

The operational performance in 2018 was solid in all countries. Occupancy improved in the Netherlands, Belgium and France. Like-for-like rental growth was positive in the Netherlands and Belgium and showed improvement in France versus 2017. Wereldhave made good progress on its Customer Journey project. An implementation scheme has been set up to execute more than 50 initiatives over the entire portfolio in 2019 and 2020.

In respect of the year 2018, a final dividend will be proposed of € 0.63 per share.

This implies a full year 2018 dividend of € 2.52. The direct result for 2019 is expected to be between € 2.75 and € 2.85 per share, assuming a stable portfolio. Our forecast includes a positive like-for-like rental growth, slightly below indexation. The dividend for 2019 is to remain unchanged at € 2.52, or € 0.63 per quarter.

Press Release: Results 2018