Zug Estates Group significantly increases earnings
The 2021 financial year was a successful one for the Zug Estates Group: At CHF 75.6 million, the consolidated result was 43.3 million higher than in the previous year - an increase of 134.2%.
The significant increase was due in particular to positive revaluation effects and the successful sale of the Hofstrasse 1a/b property in Zug, according to the management of Zug Estates. Net profit excluding revaluation and special effects rose from CHF 25.9 million to CHF 31.8 million (+23%).
According to the data, property income increased from 57.8 million to 60.0 million (+3.9%); the vacancy rate decreased from 5.0% to 4.0%. The weighted average remaining lease term (WAULT) is reported at 6.5 years. Whereas in the previous year rent reductions of 0.7 million had to be granted in connection with the Covid 19 pandemic, the corresponding effects are negligible in 2021, the company points out.
In an environment that remained challenging due to the pandemic, revenues in the Hotel & Catering segment increased slightly from 7.0 million to 8.4 million (+20.1%); continued very robust demand for the Serviced City Apartments and strict cost management resulted in a Gross Operating Profit (GOP) of 25.8% (previous year: 9.1%), the company said.
Operating income decreases
In the previous year, the sale of the last condominiums in the Aglaya project in Rotkreuz resulted in income of 72.5 million. As expected, the loss of this income significantly reduced operating income from 140.4 million to 74.2 million (-47.1%), according to the company. Lower renovation work at Metalli, Zug, led to a reduction in real estate expenses from 9.0 million to 7.6 million (-15.3%).
Operating profit before depreciation, amortization and revaluation decreased from 49.6 million to 46.9 million (-5.4%).
In the period under review, revaluation gains amounted to 42.4 million (previous year: 2.2 million). From the sale of the last property outside the two Zug Estates sites, the company achieved a pre-tax gain on disposal of 7.3 million.
EBIT increased significantly from 43.7 million to 93.2 million (+112.9 %).
Portfolio value increases
The market value of the portfolio increased from 1.65 billion to 1.70 billion (+2.8%) due to investments and revaluation effects. According to Zug Estates, the positive revaluation effect of 42.4 million (equivalent to around 2.7% of the portfolio value of all investment properties as of 31.12.21), is due in particular to the market-driven reduction in discount rates by an average of 16 basis points.
The Board of Directors will propose to the Annual General Meeting an increase in the dividend of CHF 37.50 (previous year CHF 34.00) per Series B registered share.
In the Real Estate division, Zug Estates expects the rental space market to remain intact in 2022, with corresponding demand, and anticipates a slight increase in real estate income. (bw)
