Amot concludes Q4 and 2021 with strong results and growth in all operating parameters

08 Mar, 2022

 

March 8, 2022
Amot concludes Q4 and 2021 with strong results and growth in all operating parameters
 
·      NOI grew by around 6% in 2021 relative to last year, to a total of around NIS 780 million.
·      Same property NOI in the fourth quarter grew by around 16% relative to the corresponding quarter, and amounted to around NIS 199 million.
·      FFO in 2021 amounted to around NIS 583 million, representing an increase of around 14% relative to last year.
·      FFO per share in 2021 amounted to 138.9 agorot, an increase of around 6% relative to the corresponding period last year, along with a 8% increase in the weighted number of shares.
·      The Company’s forecast for 2022: Amot announced its forecasts for 2022, according to which NOI is expected to total NIS 860-890 million; FFO is expected to total NIS 675-695 million; and FFO per share is expected to total 149-153 agorot per share.  
·      In September 2021 the Company signed an agreement for the acquisition of the rights to Tzrifin logistics park, with an area of around 274 dunams, for a total consideration of around NIS 1.5 billion. The transaction was closed on September 30 2021, and the consideration for the transaction was paid in full. The property’s value includes construction volume and unused building rights which were classified under the item for property under construction in the amount of NIS 250 million.
·      In October 2021, the Company’s Board of Directors passed a resolution to build and market the ToHa 2 project.
The total investment in the project’s construction is estimated at around NIS 3 billion (of which, a total of around NIS 660 million has been paid to date), and the expected revenue from the tower, once completed and fully occupied, is estimated at around NIS 280 million per year (the Company’s share: 50%).  In August 2021 the partners (Amot and Gav Yam) acquired from Tel Aviv Municipality the building rights for the project, and leased the land for a period ending in 2108.
·      During 2021 the Company raised around NIS 2 billion, including NIS 0.7 million by raising capital, and NIS 1.3 billion by raising debt, net.
 
Mr. Shimon Abudraham, CEO of Amot:
 2021" was an excellent year for Amot. The total value of our investment real estate grew by 23% to about NIS 17 billion, and the leverage rate remained around 43%. In current operations, we show strong growth in all operational parameters. The company has accumulated projects in stages. Estimated construction costs of about NIS 4.5 billion, the main one of which is the ToHa2 tower, for which we leased the building rights this year from the Tel Aviv Municipality.
In 2021, we implemented a multi-year strategic move to develop the logistics arm significantly. Currently, the value of the company's assets in this segment is about NIS 4.3 billion, which constitutes about 30% of the portfolio's value. In September 2021, the company took advantage of an opportunity quickly and optimally to purchase a rare logistics property that extends over 274 dunams and is located in the first circle of Tel Aviv. We estimate that the field of logistics has great potential, and we will continue to develop it in the future. Given the medium to long-term growth expectations for overall employment in Tel Aviv, we are promoting development in four complexes in premium locations in Tel Aviv that have great potential for improvement under the Cell / 5000 plan. Along with developing the company's core activities, we continue to seek opportunities to enter new real estate areas."
 
 
Summary data for Q4 and 2021 (in millions of NIS):
 
% Change 2020/21
2021
2020
% Change 2020/21
Q4 2021
Q4 2020
NOI
6%
780
734
22%
213
174
Net profit
 
932
289
 
618
70
Real FFO after neutralizing one-time financing expenses, net of tax
14%
583
512
37%
163
119
FFO per share (in agorot) after neutralizing one-time financing expenses
6%
138.9
131.5
30%
37
28.5
Weighted number of shares par value
8%
419,750
389,183
 
 
 
Change in CPI during the period
 
2.4%
(0.6%)
 
 
 
 
Main data and points in the report (according to the extended consolidated reports):
·    Net profit in 2021 amounted to around NIS 932 million, as compared with NIS 289 million in the corresponding period last year. The increase was mostly due to the increase in fair value in the amount of NIS 748 million (after neutralizing the amortization of transaction costs with respect to the acquisition of properties at a scope of around NIS 121 million during the reporting period), as compared with fair value amortization in the amount of around NIS 163 million in 2020, which was partly due to the impact of the CPI’s decrease, and partly due to the impact of the coronavirus crisis.
·       NOI in the fourth quarter amounted to around NIS 213 million, as compared with around NIS 174 million in the corresponding quarter last year, growth of around 22%, due to concessions which were given in the corresponding period last year. The decrease was due to a provision due to the lockdown to lessees of commercial centers, in the amount of around NIS 25 million. The decrease was offset by the addition of revenue from new properties, and from properties whose construction concluded and which began to generate revenue.
·       Same property NOI in the fourth quarter amounted to around NIS 199 million, as compared with around NIS 171 million in the corresponding quarter last year. The increase of around 16% was due to concessions which were given to tenants in the corresponding period, due to the lockdowns.
·       FFO in the fourth quarter amounted to around NIS 163 million, growth of around 37%, as compared with NIS 119 million in the corresponding quarter last year. The growth was mostly due to the increase in NOI during the quarter, the decrease in real financing expenses, and the decline in current taxes due to the increase of the CPI during the reporting period.
·       FFO per share in the fourth quarter amounted to 37 agorot, growth of around 30% relative to the corresponding period, along with growth of 8% in the Company’s weighted number of shares.
·       In the fourth quarter of 2021, 127 new contracts were signed, including exercised options and contract renewals at a scope of 54 thousand square meters, representing annual rent in the amount of NIS 46 million.
·     The total value of investment property (revenue-generating and under construction) as of December 31, 2021 amounted to around NIS 17 billion.
·     The occupancy rate as of December 31, 2021 amounted to around 98%, an increase relative to the occupancy rate as of December 31, 2020, which was 97.2%.  
·       Shareholders’ equity as of December 31, 2021 amounted to a total of NIS 7.6 billion (equity per share of NIS 17.17), as compared with a total of around NIS 6.3 billion (equity per share of NIS 15.42) as of December 31, 2020. The increase was due to comprehensive income for the period, and the issue of capital and options, after offsetting dividend distributions.
·       As of the publication date of the report, the Company has cash balances of around NIS 500 million, and unused credit facilities in the amount of NIS 1,180 million.
·       All of the Company’s properties are unpledged (except for properties owned with partners, around 2% of the total value).
 
·       Net financial debt as of the balance sheet date was around NIS 7.3 billion, representing around 43% of the total balance sheet (after neutralizing cash and cash equivalents).
·       Cap rate - The weighted rate of return derived from revenue-generating investment property as of the end of the period amounted to 6.08%.
·       Amot has eight projects in construction stages, with the Company’s share therein amounting to 276 thousand square meters. The total expected scope of the investment in these projects is in the range of NIS 3.7-3.9 billion (the Company’s share): ToHa2, Amot Holon Campus, office building in Modiin, HaLechi complex in Bnei Brak, K Complex in Jerusalem, Beit HaVered in Givatayim, land in Beit Shemesh and Park Afek.
·       Events during and after the quarter:
·       Amot Givatayim building (formerly Pelephone House) - In January 2022, the Company completed the marketing of the entire building, and signed with another hi-tech company an agreement to lease the remaining area of 5,000 square meters, for a period of 5 years. The building has now been marketed in its entirety for annual rent of around NIS 26.5 million.
·       In January, after the balance sheet date, the Company issued 11.6 million shares by way of a private allocation. The gross consideration which was received with respect to the issuance amounted to a total of around NIS 302 million.
 
Forecast for 2022:
 
Presented below is the Company’s forecast regarding the Company’s main operating results in 2022, based on the working assumptions:
o   Consumer Price Index - CPI increase of 2.5%.
o   No significant changes in the Company’s business environment in Israel.
o   Signed lease agreements and projections of Company management regarding current lease renewals in 2022.
 
 
Forecast 2022
Actual 2021
Updated forecast 2021
NOI
(Millions of NIS)
860-890
780
765-775
Real FFO
(Millions of NIS)
675-695
583
565-575
FFO per share (in agorot)
149-153
138.8
135-137
 
 
Dividend
With respect to 2021, the Company distributed dividends in the amount of around NIS 419 million (100 agorot per share).
Additionally, in March 2022, the Company announced another dividend with respect to 2021, in the amount of 0.34 agorot per share (around NIS 155 million).
The total sum of dividends with respect to 2021 amounted to around NIS 574 million.
 
In March 2022, the Company’s Board of Directors determined that in 2022 the Company intends to distribute minimum annual dividends in the amount of 106 agorot per share, to be paid in 4 quarterly payments. With respect to the first and second quarters of the year - 26 agorot per share, and with respect to the third and fourth quarters - 27 agorot per share, subject to a specific resolution of the board of directors at the end of each quarter.
 
About Amot
 
Amot, a member of Alony Hetz Group, is one of the leading and largest revenue-generating real estate companies in Israel. The Company’s stock is listed on the Tel Aviv 35 Index and on the Tel Aviv Real Estate Index. Amot holds 175 revenue-generating properties in Israel, with a total area of 1.8 million square meters. Most of the Group’s properties (90%) are located in large cities in Central Israel, and in high demand areas with high occupancy rates (around 98%). 46% of the value of the revenue-generating properties represent offices; 29% logistics and industrial parks; 18% commercial; 5% supermarkets; and 2% others. The Company has 8 projects under construction at a scope of around 276 thousand square meters, including the ToHa2 project, Amot Holon Campus, the office building in Modiin, the commercial and office complex on HaLechi St., as well as 3 properties in planning and initiation stages, with a total area of around 64 thousand square meters.
The Company’s major properties include ToHa1 (Totzeret Ha’aretz complex), the Atrium Tower in Ramat Gan, the logistics center in Tzrifin, the Teva logistics center in Shoham, Shufersal’s online center in Modiin, Amot Tower (formerly known as IBM House), Beit Amot Mishpat, Amot Insurance House, Kiryat Ono Shopping Mall, and a portfolio of around 35 supermarkets throughout the country.