Release Date: May 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Deutsche Konsum REIT-AG (XTER:DKG, Financial) successfully reduced its liabilities by EUR79 million, approximately 14%, through various repayments and conversions.
- The company received EUR38 million from Obarizia, which was primarily used to further reduce liabilities.
- A restructuring plan is underway, with significant property dispositions planned, potentially amounting to EUR350 to EUR450 million by the end of 2027.
- The loan-to-value ratio decreased to 52.5%, indicating improved financial stability.
- A significant portion of rental contracts, 84%, are linked to CPI, providing a hedge against inflation and preserving future rent cash flows.
Negative Points
- Rental income decreased by EUR4.4 million due to asset sales, impacting the company's financial performance.
- The company's FFO decreased by EUR8.4 million, influenced by lower rental income and increased interest rates.
- The vacancy rate increased slightly, attributed to the sale of fully occupied assets.
- The company is facing significant debt maturities in 2025, requiring extensive negotiations with lenders.
- The restructuring process involves additional costs and complexities, including engaging external advisors, which some stakeholders view as unnecessary.
Q & A Highlights
Q: What is the current situation with the missing payment from the former CEO or member of the board?
A: There is still about EUR16 million of outstanding receivable against [Orizia]. [Oriza] repaid the majority of what they owed to the company, mostly in the last calendar year, with the last payment being EUR38 million. The EUR16 million still outstanding is fully provided for and is expected to be paid back by the end of 2025.
Q: Why is Deutsche Konsum REIT-AG engaging external advisors for restructuring instead of handling it internally?
A: The sheer volume of maturities coming due requires negotiations with lenders. An independent restructuring opinion, a common practice in Germany, is necessary to ensure all lenders are treated equally and to facilitate discussions. This approach helps manage the significant liabilities due in 2025, which cannot be repaid from current operational funds.
Q: How is Deutsche Konsum REIT-AG addressing the significant liabilities due in 2025?
A: The company is in discussions with lenders to extend maturities and is working on a restructuring plan that may involve significant asset dispositions. The restructuring opinion being prepared will detail measures to cover liabilities, and the company is engaging with lenders to ensure obligations are met.
Q: How does Deutsche Konsum REIT-AG plan to manage its liquidity given the upcoming maturities?
A: The company secured EUR14 million in bridge financing to ensure liquidity, with discussions ongoing to extend this facility until the end of August 2025. The restructuring plan aims to provide sufficient time to address liabilities, and asset sales are being considered as part of the strategy.
Q: What impact does the company's history have on current lender negotiations?
A: Deutsche Konsum's history has complicated discussions with lenders. However, the company is working to ensure lenders understand the restructuring process and the measures being taken to meet obligations, despite past challenges.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
