Financial management
the financial management of the DeMIRe Group is executed in accordance with the guidelines adopted by the executive Board. this applies to both the liquidity management and financing. the centralised liquidity analysis helps to optimise cash flows. the primary goal is securing liquidity for the entire Group and maintaining the Group’s financial independence. In doing so, the focus is on long-term and stable financing solutions that sustainably and positively support our business development. All financial obligations and the related credit clauses (financial covenants) were met in the reporting period. Financial covenants are customary and require compliance with financial ratios, such as the equity ratio, interest service cover ratio (ISRC) and the debt service cover ratio (DSCR).
providing the Supervisory Board with regular information on the financial situation is an integral part of DeMIRe’s risk management system. the principles and objectives of capital management and control are presented in the notes to the consolidated financial statement
Selected information from the consolidated statement of cash flows
eurK 01/01/2015 –
31/12/2015
01/04/2014 – 31/12/2014
Cash flow from operating activities 10,815 -3,986
Cash flow from investing activities -29,165 -255,206
Cash flow from financing activities 42,420 259,634
net change in cash and cash equivalents 24,070 442
cash and cash equivalents at the end of the period 28,467 4,397
Cash flow development reflects the investments made to expand the real estate holdings. A detailed consolidated statement of cash flows is presented in the notes.
Cash flow from operating activities in fiscal year 2015 in the amount of euR 10.8 million was euR 14.8 million higher than its level of euR -4.0 million in the abbreviated 2014 fiscal year. Cash flow from operating activities is derived from the Group’s profit/loss before taxes (eBt) of euR 33.0 million and is primarily adjusted for the interest result of euR -25.7 million (abbreviated 2014 fiscal year: euR -2.9 million), the profit/loss from the fair value adjustments of investment properties in accordance with IAS 40 in the amount of euR 18.5 million (abbreviated 2014 fiscal year: euR 63.6 million), and the profit of euR 33.2 million originating from a purchase below market value (abbreviated 2014 fiscal year: euR 0.0 million). the acquisitions in the abbreviated 2014 fiscal year offered considerable appreciation potential due to the acquisition circumstances, whereas most of the property acquired during the fiscal year was acquired at a purchase price equal to its fair value. the majority of the valuation gains in the amount of euR 6.6 million are attributed to the logistikpark property in leipzig. negative goodwill of euR 33.2 million resulting from the acquisition of Germavest Real estate S.à.r.l. was recognised in the reporting year through profit or loss under other operating income.
Cash flow from investing activities in the reporting year amounted to a net euR -29.2 million compared to euR -255.2 million in the abbreviated 2014 fiscal year. the reason for this decline, despite the threefold rise in business volume, was the use of capital increases against contribution in kind as the predominant source of acquisition funding. Cash in the amount of euR 35.6 million was utilised for the acquisition of investment properties. purchases included a property in Schwerin, the acquisition of Germavest Real estate S.à.r.l. and the t6 portfolio, the cash component of the payment for the acquisitions of logistikpark leipzig GmbH, Hanse-Center Immobilienobjektgesellschaft GmbH, and Glockenhofcenter Immobilienobjektgesellschaft GmbH.
the consolidation of Fair Value ReIt as at December 31, 2015, resulted in a cash inflow for the Group of euR 16.0 million. Down payments of euR 11.3 million were made, among others, for the purchase of Kurfürsten-Galerie in Kassel, which was completed in January 2016. proceeds of euR 1.7 million were received from the sale of property holdings.
Cash flow from financing activities in the 2015 reporting year amounted to euR 42.4 million compared to euR 259.6 million in the abbreviated 2014 fiscal year. the Company received proceeds of euR 11.2 million from the cash capital increase executed in mid-July 2015. expenses of euR 1.5 million were paid out in relation to the capital increases for acquisitions and the takeover of the interest in Fair Value ReIt-AG executed in the fiscal year. proceeds from the assumption of liabilities totalled
euR 54.7 million in the reporting year (abbreviated 2014 fiscal year: euR 261.7 million) and included in particular the increase in the 2014/2019 corporate bond in the amount of euR 36.0 million, the assumption of a loan from Signal Capital for euR 32.0 million to acquire an interest in Germavest and make a down payment for Kurfürsten-Galerie in Kassel, the real estate loan from Volksbank Mittweida amounting to euR 4.6 million for the purchase of a property in Schwerin and a loan from Hypo noe Group Bank AG in the amount of euR 11.5 million. the proceeds were used to pay interest of euR 21.3 million (abbreviated 2014 fiscal year: euR 1.6 million) and repay financial debt in the amount of euR 36.7 million (abbreviated 2014 fiscal year: euR 0.5 million).
the net change in cash and cash equivalents was euR 24.1 million (abbreviated 2014 fiscal year: euR 0.4 million). Cash and cash equivalents at the end of the reporting period grew to euR 28.5 million from euR 4.4 million at the end of the previous fiscal year.
throughout the entire reporting period, the DeMIRe Group was always in a position to fully meet its payment obligations.