Melisron: The FFO in the quarter fell by 65% ​​to 64 m – the capital market

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Reports its financial results for the fourth quarter of 2020: the FFO in the quarter amounted to NIS 64 million, a decrease of 65% compared to NIS 181 million in the corresponding quarter. The owner’s share in NOI amounted to NIS 125 million, a decrease of 54% compared to NIS 273 million in the corresponding quarter. In the period, Melisron recorded a loss attributable to the owner in the amount of NIS 55 million, compared with a profit in the corresponding period that resulted from relief for tenants and negative revaluations of properties. Excluding the decrease in value and the effects derived from tax-deferred taxes, this is a net profit of NIS 10 million, compared with NIS 126 million in the corresponding quarter.

The company mentions that during the quarter the trade sector operated for about a month and attributes the decrease in NOI and FFO to the relief given to tenants (in the amount of NIS 160 million per quarter), with two of the items offsetting due to the decrease in current tax expenses and savings in financing expenses. Melisron also says that from the date of opening the malls at the end of the third closure until near the date of the report, there was a sharp increase of about 21% in the company’s malls’ revenues.

Nearly half of 2020 the group’s malls were closed (150 days) and for the entire year the FFO of the representative Melisron amounted to NIS 461 million, 36% lower than NIS 717 million in 2019. The decrease is explained by relief for tenants (NIS 351 million for the entire year), as these were partially offset by the decrease in current tax expenses, savings in financing expenses and a decrease in administrative and general expenses. The NOI attributed to the owner’s share in the year amounted to NIS 779 million, a decrease of 29% from a figure of NIS 1.1 billion in 2019. Among other things, the figure affected the acquisition of the minority rights in the Ramat Aviv mall at the end of December 2019.

In the bottom line, Melisron recorded a loss attributable to shareholders in the amount of NIS 250 million in 2020, compared to a profit in 2019. Melisron also recorded a decline in value of NIS 741 million during the period and in the shadow of the crisis, compared with positive revaluations of NIS 975 million in 2019. Neutralizing the decline in value, the company ended 2020 with a profit for owners of NIS 318 million, compared with a profit of NIS 507 million in 2019.

Melisron also reports occupancy rates at the end of the period: 98% in commercial properties, while in contract renewals and the exercise of options, a 3% increase in real rents was made. 91 contracts were signed with new tenants, in which there was an increase of 2% in real rents on average. The collection rate less the relief was about 97%.

The occupancy rate in offices rose to about 95%, despite working from home and against a figure of 92% in 2019, while an increase of about 4% in real rents in contract renewals and exercise of options. 34 contracts were signed with new tenants. The company also signed a number of new contracts for areas that will generate an annual income of about NIS 9 million.

As of the date of publication of the reports to Melison, the balance of cash and credit facilities in the amount of NIS 1.9 billion against a debt that it must serve by the end of the year in the amount of NIS 1.1 billion. In addition, the company owns unencumbered assets amounting to NIS 6.2 billion. The company’s leverage ratio (LTV) at the end of 2020 was about 47.9%, compared to about 46.8% at the end of 2019. In the next two years, the company will have to repay a debt with a weighted effective interest rate of about 2.79%. . As a result, the company is expected to recognize annual savings in interest expenses in the total amount of NIS 71 million over the next two years, based on the current maturity yield of Melisron bonds in long-term maturities.

Melisron says the company is considering entering synergistic areas of activity such as server farms, logistics centers, rental housing, sheltered housing and hotels. Alongside the reports, Melisron publishes a valuation of the Ramat Aviv mall, which was made at a discount rate of 6.43%, valued at NIS 2.44 billion, after an increase in the value of a planned construction on the roof and less one-time expenses and a provision for renovating the mall. This is a value less than NIS 10 million, compared with that recorded in the company’s books as of the end of September 2019. The valuation was conducted by Barak Friedman Kepler & Shimkevitz & Co..