Press Release

Luxembourg, 31 August 2020

CPI PROPERTY GROUP publishes half-year financial results for 2020

CPI PROPERTY GROUP (hereinafter "CPIPG" the "Company" or together with its subsidiaries the "Group"), the largest owner of income-generating real estate in the Czech Republic, Berlin and the CEE region, hereby publishes its unaudited financial results for the first half of the 2020 financial year.

"CPIPG had a successful first half of 2020," said Martin Němeček, CEO. "Our property portfolio, rental income and occupancy grew as our team responded effectively to the challenges of COVID-19."

Key highlights for the first half of 2020 include:

- CPIPG's property portfolio increased to €9.8 billion (up 8% from year-end 2019) as the Group made €928m of acquisitions, primarily offices in Warsaw and a 29.4% stake in Globalworth.

- Total assets increased to €11 billion. The Group's results also include a fair value adjustment of -€252 million (-2.8%) because of prudent revaluations of hotels and certain retail properties, plus the impact of a weaker CZK versus EUR.

- Net rental income was €164 million (up 13% versus H1 2019), because of acquisitions, higher occupancy at 94.8%, and 1.7% like-for-like growth in gross rental income. Net business income was €168 million (unchanged from H1 2019).

- Consolidated adjusted EBITDA was €164 million (up 15% versus H1 2019), and funds from operations (FFO) was €115 million (up 12%).

- The Group collected 93% of contracted rent before the impact of one-time COVID-19 discounts, and 97% including discounts.

- Net Loan-to-Value (LTV) at 42.5% and Net ICR at 5.5x remain comfortably within the Group's financial policy.

- During the first half of 2020, the Group issued €1.19 billion equivalent of senior unsecured bonds in Euros, Sterling and Hong Kong Dollars. In January, CPIPG also issued SGD 150 million of perpetual hybrid bonds. The Group also signed a secured loan of €116 million.

- Proceeds from external financings were used for acquisitions and to repay about €850 million of bonds and schuldschein maturing in 2022, 2023, 2024 and 2025.

Notable events occurring after the end of H1 2020 include:

- In July, the Group increased the size of our secured loan facility in Berlin by €259 million.

- In August, the Group issued HUF 30 billion (about €86 million) of senior unsecured green bonds and acquired Concept Tower, an A+ office property in Warsaw.

"The Group's capital structure, liquidity and operating performance have been robust throughout the COVID-19 outbreak," said David Greenbaum, CFO. "During the second half of 2020, CPIPG will continue taking proactive steps to ensure we are well-positioned to meet future opportunities and challenges."

CPIPG will host a webcast in relation to its financial results for the first half of 2020. The webcast will be held on Monday 7 September 2020 at 11:00am CET / 10:00am UK.

Please register for the webcast via the link below:

FINANCIAL HIGHLIGHTS

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT*

* The presented financial statements do not represent a full set of interim financial statements as if prepared in accordance with IAS 34

Gross rental income

Gross rental income increased by €17.6 million (11%) to €172.8 million in the six-month period ended
30 June 2020. The increase was driven by acquisitions of offices in Warsaw, Poland in the fourth quarter of 2019 and the first half of 2020.

Net hotel income

Because of lockdowns and travel restrictions related to the COVID-19 outbreak, hotel revenue decreased by €36.9 million (65%) to €19.8 million in the six-month period ended 30 June 2020. Because the Group operates our own hotels, we were able to sharply reduce hotel operating expenses by €16.5 million (40%) to €24.6 million.

Net valuation loss

The valuation loss of €11.0 million in the six-month period ended 30 June 2020 primarily reflects decreased fair value of two retail properties in Budapest, Hungary.

Amortization, depreciation and impairment

Amortization, depreciation and impairment increased by €38.5 million to €54.9 million in the period due to negative revaluation of hotels (€37.6 million).

Interest expense

Interest expense increased by €13.3 million to €38.8 million in the period as the Group increased gross debt to fund acquisitions.

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION*

* The presented financial statements do not represent a full set of interim financial statements as if prepared in accordance with IAS 34

Total assets

Total assets increased by €289.6 million (3%) to €10,962.4 million at 30 June 2020 compared
to 31 December 2019. The increase was driven by the acquisition of a 29.4% stake in Globalworth and five offices in Warsaw, partially offset by fair value adjustments (including impact of changing foreign exchange rate).

Total liabilities

Total liabilities increased by €367.4 million (7%) to €5,570.7 million at 30 June 2020 compared to 31 December 2019. The Group issued senior unsecured bonds of €1.19 billion and completed new loans for €116 million while repaying loans and bonds of €850 million.

EQUITY AND EPRA NRV

Total equity decreased by €77.8 million from €5,469.5 million as at 31 December 2019
to €5,391.7 million as at 30 June 2020. The movements of equity components were as follows:

- Decrease of retained earnings due to the loss for the period of €24.5 million;

- Increase of perpetual bonds by €126.5 million;

- Decrease in revaluation and hedging reserve of €30.4 million;

- Decrease in translation reserve of €148.9 million;

- Decrease in non-controlling interest of €0.5 million.

EPRA NRV was €4,865 million as at 30 June 2020, representing a decrease of 4.6% compared to
31 December 2019. The decrease of EPRA NRV was driven by the above changes in the Group's equity attributable to the owners (the decrease of retained earnings, revaluation and hedging reserve and translation reserve).

For disclosures regarding Alternative Performance Measures used in this press release please refer to our Half-year Management Report 2020, chapters Glossary, Key Ratio Reconciliations and EPRA Performance; accessible at .

 

Unaudited documents will be available tonight on:


Half-year 2020 unaudited financial report
Half-year 2020 unaudited management report

 

INVESTORS

CPI PROPERTY GROUP
David Greenbaum
Chief Financial Officer

CPI PROPERTY GROUP
Joe Weaver
Director of Capital Markets

MEDIA/ PR
Kirchhoff Consult AG
Andreas Friedemann
T 50, F 60
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