October 26, 2020

Colonial earns 525 million, 23% less, in the year of the merger with Axiare | Economy

Colonial earns 525 million, 23% less, in the year of the merger with Axiare | Economy



Colonial obtained a profit of 525 million in 2018, a year that the company considers "transformation" after integrating Axiare's entire business "in record time". The net attributable result is thus 23% lower than the previous year, which contrasts with the positive variation of virtually all other economic indicators. One of them is income income, which reached 347 million after increasing 23% compared to 2017 according to the information sent by the socimi to the CNMV. The CEO of Colonial, Pere Viñolas, insisted on Tuesday during the presentation of the results to the media in which the goal is to reach an income of 500 million "in three or four years."

The decline in profits, they argue in the socimi, is mainly explained by the variation in the value of assets and provisions. On the one hand, it penalizes the fact that the revaluation of assets, although important, was lower than that of 2017. And on the other, in that year an extraordinary operation was computed, such as the sale in Paris of the In / Out building. That's why managers believe that the portrait is best obtained by looking at other data.

"The summary of the value is very explanatory", said the president of Colonial, Juan José Brugera, "the company was worth 3,774 million a year ago and is worth 5,098 million today". The increase in the net value of the assets is therefore 36%. The quotient per share is 10.03 euros, which represents an interannual growth of 17%. The colonial council will propose to the board the distribution of a dividend in the environment "of about 20 cents per share".

A large part of the positive evolution of the indicators is due to the acquisition of Axiare. The operation materialized in early 2018 and the integration of both companies, he points out, has materialized "in record time". All of Axiare's assets were incorporated into Colonial, whose portfolio is highly concentrated in branches. The socimi got rid of some of those assets that it considered "non-strategic" and keeps "under study" others, such as logistics inherited of the merger operation, as explained by the CEO. Viñolas has also highlighted that, despite the importance of the merger with Axiare, discounting this operation, the value of Colonial's assets "would have grown by 8%, which is a leading growth in the market".

In any case, and counting on Axiare, Colonial ended 2018 with a portfolio of assets worth 11,348 million euros, compared to 9,282 million a year earlier (+ 22%). The addition of Axiare allows it to be virtually ahead of Merlin Properties, which currently declares on its website a gross value of its assets of 11,254 million euros, although it will present the final results of 2018 within two days. Both are the only Spanish socimis listed on the Ibex 35.

Offices in the center of cities

Most of these assets are made up of offices in the center of Paris, Madrid and Barcelona, ​​the three markets where Colonial operates. Viñolas has ensured that there is "no specific plan to enter a different city" and stressed that the central position of their offices leads to an "optimistic" view of the future. "The buildings are practically occupied, many things would have to happen for there to be a change of dynamics," he assured.

According to the income statement remitted to the CNMV, the total unemployment of the group (including the bulk of office assets, which also has commercial and logistics spaces) is around 4%. "We live in the real world and we are aware that we are surrounded by uncertainties", assured the CEO in relation to external factors, such as the Brexit, or internal ones, such as the upcoming elections in Spain. "But the tone is very positive and can hardly change us in 2019," he has completed.

In any case, Colonial, as its directors have explained, does not contemplate any corporate operation similar to Axiare right now and believes that its immediate growth will be "organic, building to building". In that sense, it has put in value the rent increases in the three markets in which it operates. In this sense, a large part of the 23% growth in rental income, which stood at 347 million euros, was due to the progression of Madrid (where most of Axiare's assets were concentrated). However, where income increased the most, 10% was in Barcelona.

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