Hiag makes a loss of over 70 million
Site developer Hiag increased its property income by over 8% in the 2019 financial year. Nevertheless, a loss of CHF 70.7 million was incurred.
Hiag had to cope with two severe setbacks in the 2019 financial year, writes the site developer in its announcement on the presentation of the annual results: firstly, the exit from the project to develop a multicloud platform and the restructuring of Hiag Data, and secondly, the bankruptcy of Rohner AG in Pratteln. The company was Hiag's third-largest tenant.
After a profit of CHF 60.9 million in the previous year, Hiag posted a loss of CHF 70.7 million in the year under review due to these effects. The aborted development of the Multicloud platform had a negative impact of around 70 million on the result, the company says. All assets related to this project have been impaired at 100% as of December 31, 2019, it said. It is expected that extraordinary income can be generated in the context of the realization of the existing assets, Hiag added.
Rohner bankruptcy costs 51 million euros
Following the bankruptcy of Rohner in Pratteln, Hiag has had to bear costs for dismantling and cleaning up the site to make it chemical-free. This had burdened the result with a further 51.3 million.
In operational terms, however, Hiag made gains: rental income collected in fiscal 2019 rose byTP2T8.21 year-on-year to 63.0 million (PY: 58.2 million). Annualized rental income declined only slightly by 2.5% to 59.4 million despite the bankruptcy of Rohner AG and the departure of a major tenant in Dietikon.
The vacancy rate increased from 14.3% to 16.2%. According to Hiag, this was mainly due to the initial vacancy rate of three completed projects and the departure of a tenant in Dietikon. The weighted average remaining lease term (WALT) is 8.9 years (PY: 9.7 years).
Portfolio worth 1.57 billion
At the end of December 2019, the total portfolio consisted of 116 properties. The value increased by 5.4% to 1.57 billion (Dec. 31, 2018: 1.49 billion). Revaluation effects were negative at -16.8 million, compared to a plus of 76.4 million at the end of 2018, mainly due to the Rohner bankruptcy, which had an impact of -20.4 million, Hiag said.
As of the reporting date of December 31, 2019, the development portfolio comprised 56 projects and usable space of around 707,000 sqm. The expected investment volume for the next ten years, excluding further acquisitions, is around 1.9 billion. Six projects with an annualized property income after completion and full occupancy of around 4.6 million were currently under construction. In the next three years, Hiag plans to launch a further ten development projects with a usable floor space of around 107,000 sqm. The company puts the investment for this at 250 million. After completion and full occupancy, a property income of around 21 million can be expected.
No dividend for 2019
For the 2020 financial year, Hiag expects annualized rental income to increase following the completion of further development projects, although rental income received is expected to be lower following the Rohner bankruptcy. During the redevelopment of the site in Pratteln, operating costs of up to 5 million net per year are expected to be incurred. Potential proceeds from asset sales of the chemical company are not expected until the 2021 financial year.
Hiag Data will also burden the result in fiscal 2020 with ongoing operating costs of around 5 million. These costs would be offset by potential income from the use of infrastructure as part of the cooperation with Beelastic and the Tarchini Group.
The Board of Directors proposes to the Annual General Meeting on April 23, 2020, to waive a dividend for the financial year 2019. (ah)
