The DIC Group is one of the leading investors in the German market for commercial real estate

Press Release

DIC Asset AG: six months profit sharply raised from Euro 3.8 to 19.2 million

Frankfurt, 13.08.2007

DIC Asset AG (German Securities ID 509840 / ISIN DE0005098404) today presented its interim report for the first half of the 2007 financial year. The results once again show strong, above-average increases in both earnings and profitability: at Euro 19.2 million (up Euro 15.4 million or 405 per cent), DIC Asset AG’s consolidated net income was more than five times the figure recorded for the first half of 2006. Accordingly, earnings per share more than doubled, from Euro 0.27 to Euro 0.66 (+144 per cent).

Total revenues for the first six months of 2007 were up from Euro 18.1 million during the same period of the previous year to Euro 132.2 million (up 630 per cent). Rental income was up strongly, by Euro 12.1 million (up 229 per cent) to Euro 39.8 million, mainly as a result of the marked expansion in the real estate portfolio. 89 per cent of properties in the portfolio are let.
 
At the same time, the increase in total administrative and personnel expenses – up 79 per cent, from Euro 2.9 million to Euro 5.2 million – was clearly lower than revenue growth, reflecting economies of scale realised by virtue of an efficient organisational structure. Total expenses, however, were up by Euro 84.1 million, or 797 per cent, to Euro 94.8 million. This increase was mainly due to higher disposals of residual carrying amounts, reflecting the much higher level of real estate sales.

EBITDA (earnings before interest, income taxes, depreciation and amortisation) was up almost five-fold compared to the figure for the first half of 2006, rising by Euro 37.0 million to Euro 46.4 million, and exceeding the forecast made in early July by another Euro 1.4 million. Operating profit (funds from operations, calculated as earnings before interest and taxes, profits from disposals and development projects) increased by 212 per cent, from Euro 6.6 million to Euro 20.6 million. FFO per share amounted to Euro 0.72 (H1 2006: Euro 0.49). Cash flow from continuing operations more than doubled, from Euro 8.4 million in the first half of the previous year, to Euro 20.3 million. The operating yield (the ratio of FFO to rental income) remained virtually unchanged, at around 52 per cent (2006: 55 per cent), in spite of a combination of higher financing costs and lower initial yields of acquired properties. The sales yield (the ratio of profit to sales proceeds) increased from around 11 per cent in the first half of 2006, to approximately 14 per cent.

At Euro 1.8 billion, reflecting the strong portfolio expansion, DIC Asset AG’s total assets were up by a notable 34 per cent against the end of last year (31 Dec 2006: Euro 1.3 billion). The equity ratio stands at a comfortable 30.0 per cent (31 Dec 2006: 39.7 per cent).

DIC Asset AG’s aggregate Euro 550 million real estate investments during the first six months of 2007 exceeded the company's own investment targets. Within the framework of an active portfolio management strategy, the company sold properties worth Euro 168 million, realising profits of Euro 11.6 million. With an aggregate floor space of 947,000 sqm, DIC Asset AG’s real estate portfolio had a value of Euro 1.7 billion as at 30 June 2007. Further acquisitions, worth up to Euro 1 billion, are envisaged over the next 12 to 15 months, with additional sales planned as well.

On the back of the very successful first half year, DIC Asset AG projects consolidated net income for the full year 2007 (income after taxes, depreciation and amortisation) at Euro 36 million to Euro 38 million.

Ulrich Höller, Chairman of the Management Board of DIC Asset AG, pointed out that the Company’s results for the first half of 2007 had once again exceeded its own projections: “This is the sixth time in a row that we have the pleasure of presenting a quarterly report showing earnings growth clearly above average. What is important for our investors is the fact that we successfully diversified the sources of income across a broader basis: for instance, our Opportunistic Co-Investments business segment contributed Euro 2.5 million to results (Q2 2006: Euro 0.4 million), whilst real estate sales yielded Euro 11.6 million. Moreover, incomes generated from the asset management and property management businesses are gaining importance for the Company’s financial performance.”

About DIC Asset AG
Established in 2002, DIC Asset AG (German Securities ID 509840 / ISIN DE0005098404), with registered offices in Frankfurt/Main, is a real estate company with a dedicated investment focus on commercial real estate in Germany, pursuing a return-oriented investment policy. DIC Asset AG’s real estate portfolio currently includes around 1.1 million sqm of floor space, spread over 329 properties. The portfolio is divided into three segments: the Core portfolio includes the proprietary portfolio held on a long-term basis and offering stable, attractive rental yields; the Value-Added portfolio contains real estate with promising performance potential over the medium term; while the Opportunistic Co-Investments portfolio is comprised of real estate investments that have a more pronounced risk/return profile, which will be placed with third parties following a repositioning under an individual business plan. Real estate assets under management currently amount to approx. Euro 3 billion. DIC Asset AG has been included in the SDAX® segment of the Frankfurt Stock Exchange for more than a year.

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