6 August 2020 9:12

Resilient results in the face of the “stress test” created by the pandemic

  • Convincing stability of the results in terms of operations and financial management in a highly penalizing context attributable to the restrictions imposed by the need to contain the virus .
  • Almost all the tenants have reopened after the lockdown: financial occupancy largely unchanged at the end of June 2020.
  • IGD is still a transparent company, with a clear path ahead in the coming months: a new guidance for FFO 2020 announced calling for a drop of 25-28% against 2019.




The limits on the retail business openings based on which, beginning on 12 March through 18 May 2020, only retailers selling essential goods were allowed to operate, along with the restrictions on movement and social distancing caused footfalls and the retailers’ sales to drop. The first half 2020 performances cannot, therefore, be compared to the same period of the prior year.

Even in this backdrop, the operating metrics provided encouraging signs. In the face of footfalls which at the end of June had recovered 80% of the pre-lockdown level, retailers’ sales were down by 13% in June, less, therefore, than the decrease in footfalls. The average ticket rose 18.1% to €26.6.

The financial occupancy in Italy was 95.6% at 30 June: only slightly lower than the 96.2% posted at the end of March. The financial occupancy in Romania also reached a good level, coming in at 94.7%.

Net rental income amounted to €56.3 million in the first half of 2020, down -17.9% against the same period 2019. The result reflects the provision of €8.5 million (or around one month of revenue) made by IGD to reflect the estimated impact of Covid-19 on the half, with no carry over in subsequent years, based on the agreements reached with tenants for deferrals or temporary discounts on rent.

Core business EBITDA amounted to €51.4 million (-21.4%). The core business EBITDA margin reached 66.1%, with the margin on freehold properties coming to 66.7%. There was a noticeable drop in general expenses of around 9.7% explained by the cost containment measures implemented during the half in light of the health emergency.

Financial charges improved by 9.8% against the first half of 2019, net non-recurring costs, the application of IFRS 16 and the negative carry of roughly €2.7 million relating to the last €400 million bond issue completed in November 2019.

Funds from Operations (FFO) amounted to €32.9 million, falling €9 million (-21.4%) against first half 2019 as a result almost entirely of the estimated one-off impact of Covid-19 on the half of €8.5 million.

The market value of the IGD Group’s real estate portfolio reached €2, 322.62 million, a decrease of 2.47% compared to December 2019. This decrease is explained for 2.71% by the market value of Italian malls, 1.35% by Italian hypermarkets and supermarkets, and for 5.37% by Romanian malls.

The Net Initial Yield, calculated using EPRA criteria, came to 5.4% for the Italian assets (5.5% topped up) and 6.0% for the Romanian portfolio (6.2% topped up).

The EPRA NAV and EPRA NRV were down by 5.1% with respect to year-end 2019, coming in at €10.81 per share. The EPRA NTA was €10.7 per share, a decrease of 5.2% with respect to the end of the prior year.

IGD can rely on cash on hand of 103 million and committed, as well as uncommitted, credit lines of 220 million. In order to meet financial needs for the next reporting period, the company will also be able to use a SACE loan of €37 million, guaranteed by the Italian government, that is in the process of being finalized.

At the end of June 2020 IGD’s LTV was 49.0% (47.9% ex IFRS16), while the ICR (Interest Cover Ratio) came to 3.5x.

In light of the results posted in the half, the evolution of the situation and the estimated one-off impact of Covid-19 on the current year, IGD formulated a new guidance for 2020 FFO in a range of between €0.54 and 0.57 per share circa (-25-28% circa compared to the 2019 FFO).


Net Rental Income 56.3% -17.9%
Core business EBITDA 51.4 € mn -18.3%
Core business EBITDA margin
66.1% -121 bps
Funds From Operations (FFO) 32.9 € mn -21.4%
Loan-to-Value  49.0% (adj. IFRS16 ab. 47.9%) < max. level of 50%