Zug Estates: Significant increase in profit and earnings
The Zug Estates Group reports an increase in both property income and operating income as well as in consolidated net income for the 2018 financial year.
According to the information provided, the Group result increased by 12.2% to CHF 38.8 million compared to the previous year. The Group result excluding revaluation gains increased byTP2T 8.91 to 28.6 million.
Real estate income increased by 11.8% to 50.8 million, the real estate company reports. The main reason for this was the completion of construction site A and the wooden high-rise building S22. In the year under review, Zug Estates completed 152 apartments and 13,000 sqm of commercial space. The vacancy rate therefore increased from 1.5% to 2.9%.
In the year under review, Zug Estates reportedly invested 117.5 million in the expansion of its portfolio, with a further 18.1 million flowing into the Aglaya promotion project. Here, 87% of the apartments have now already been sold or reserved, the company said. The market value of the entire portfolio increased byTP9.1% year-on-year to1.54 billion (previous year:1.41 billion). The equity ratio decreased from 56.8% to 54.4% due to the investment activity.
Dividend to rise
The Board of Directors intends to propose to the 2019 Annual General Meeting of Shareholders a distribution of CHF 28.00 per Series B registered share, an increase of 9.8%, Zug Estates announces. This corresponds to a payout ratio of 49.9%.
It also states that the Board of Directors intends to propose a dividend with annual dividend growth of 10% from the 2020 Annual General Meeting. The reason for this is the special effects from the proceeds of the sale of the Aglaya project expected in the next two years. The payout ratio is to increase until it reaches a level of two-thirds of operating profit and until there are no major investment activities. In addition, an additional special dividend from the sale of the condominiums in Haus Aglaya is to be proposed to the Annual General Meeting in 2020 and 2021 respectively.
Operating result to rise sharply in 2019
For the 2019 financial year, Zug Estates expects a significant increase in operating profit before depreciation and revaluation - due to the first tranche of the expected proceeds from the sale of the Aglaya apartments. The consolidated result excluding revaluation income will be above the previous year's figure, according to the forecast.
In the real estate business area, rental income is expected to rise due to the full-year rental income from S22 and construction site A, as well as the occupation of the first construction phase of construction site 1 and the rental space of Aglaya. At the same time, however, property expenses will increase due to further maintenance work at Metalli and Suurstoffi, Zug Estates said. (ah)
