Ladies and gentlemen, welcome to the Deutsche Konsum REIT-AG H1 2023-2024 Financial Results Conference Call. I am Shari, the call's call operator. I would like to remind you that all participants will be listening on remote and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Christian Hellmuth, CFO, and Alexander Kroth, CIO. Please go ahead, gentlemen. Good morning, everyone. This is Christian and Alex from Deutsche Konsum. Thanks for your time and interest in the H1 Financial Results Call of Deutsche Konsum. As you may have seen, this morning we have uploaded the presentation to our website. So for those who are not able to follow this webcast, please go to our website, download the presentation, and then you can follow us. We will refer to page numbers, and then, yeah, you can follow us by this. As per usual, we will give a very quick overview about what has happened in the first six months of the current financial year, 2023-2024, and afterwards, we are happy to take your questions in a Q&A session. Yeah. Now I would like to start on page 4, which is the summary or the highlights presentation, what has happened, in the first six months. So as to be expected, the operative business remained very stable, means we were able to prolong leases. We have reduced vacancies, or tenants have exercised their prolongation options. We were also able to increase rents slightly by indexation and so on. But the main focus, obviously, was in the refinancing of the short-term maturing corporate bonds. You know, we have two bonds outstanding, one EUR 70 million unsecured bond and another EUR 35.9 million secured bond, where we are negotiating about the prolongation. I come to that a little bit later. Let's jump directly into the operative business numbers. The rental income has increased year-on-year by almost 3% to EUR 39.8 million. This was mainly due to a slightly larger property portfolio compared to the prior year. You know, our last big acquisition was the big center in Cottbus, which became effective in November 2022. So that has a slight contribution to the rental income increase in the first half year of the current financial year as well. And of course, we had a few rent increases by indexation, although we see that this gradually runs a little bit out because meanwhile we have went through the whole portfolio, I guess, and yeah, we don't expect any significant further rent increase from indexations in the near future. And inflation is going to be decreased. So I think we have done what we could do regarding the rent increases here. However, the net rental income has decreased, as we have already seen in the prior quarters, by 6.5% to EUR 24.8 million. This was mainly due to higher non-recs, running costs, and we had also a few one-offs in the cost positions. We have also is a slight change in the accounting approach of running costs to be billed to the tenants. Since last year, we have decided that we quarterly just book the receivables at the same size like the prepayments received from tenants. So, that simplifies the whole accounting methodology a little bit, and we don't need to make any estimations on a quarterly basis, but we'll just book the receivables when we have made the final invoices to the tenants then at the end of the year. The funds from operations have decreased by 17% to EUR 16.5 million, or 0.47 per share on an undiluted basis. This is, as we have seen already in the previous quarters, mainly due to higher interest costs where we have to spend like the whole sector. And the AFFO, which is the adjusted funds from operation, after deduction of CapEx investments, we have achieved 0.31 per share, which is an increase by around 25%. That's simply why we, because we have invested less CapEx than in the same period of the prior year. We plan to have more CapEx investments in the future, but this will probably not have any big impacts anymore to the current financial year because it ends already in four and a half months. So that's it to the FFO numbers, AFFO numbers. Regarding the property portfolio, we have announced at the end of March that we have sold a property subportfolio of 14 properties, at actually very attractive conditions. It was at the level of the book values, the IFRS book values after the last valuation, end of September 2023. We had to give some slight deductions because of short-term maintenance requirements. But overall, it was a very good sales transaction, which is going to be closed by the end of June. Before we had already reported the sale of the former vacant Real hypermarket in Trier-Kenn, which became effective end of December 2023. And at the moment, we are also examining selective further sales, which would, of course, support to refinance the debt structure. I will come to that a little bit later. But here is the focus more on non-strategic properties with more cyclical tenants, which we try to sell selectively, at around book value as well. The proceeds will mainly be used to repay debt instruments and with the aim to reduce the LTV levels, obviously. Regarding the refinancing of the two maturing bonds, the whole process took a bit longer than expected, but I guess we are here in the final phase. You know, before we had to figure out how much we could repay, coming out of the sales proceeds, and we have now a size of around EUR 50 million, which we are going to repay, against the EUR 70 million bonds. That means, we will have a remainder of around EUR 20 million, and we are trying to prolong them until next year together with a secured bond of EUR 35.9 million. For the EUR 20 million remainder, we have to provide some more collaterals in form of three other properties. The bondholder has done an extensive due diligence process, with the legal, technical DD and so on, which took also time. That's why we have decided to initially prolong both bonds until the end of June 2024. At first, we have announced that two weeks ago, to take our time to finalize all negotiations and processes necessary. I guess we will not take until the end of June to get those bonds prolonged. But, yeah, here, I guess, as I mentioned, everything is, goes into the right direction. Regarding the KPIs, the main KPIs, they remain basically solid. LTV level is 61.4%. This is going to be reduced within the next quarters, by repaying debt out of the proceeds from sales, as I mentioned. And, furtherly, we have also ongoing amortizations of loans, so that will also help. And we will try to achieve an LTV level of below 55% by the end of this financial year, at the end of September. The EPRA NTA is EUR 7.91 per share on a fully diluted basis. This does not reflect the last convertible bond, which we have issued at the beginning of April this year. If you take this into account, then the EPRA NTA on a fully diluted basis, we overall, 3 convertible bonds is around EUR 7.20 then. ICR interest cover ratio is 2.6 times the cash-based EBITDA, which is still comfortable. And the average weighted debt costs have increased to around 3.1%, including secured and unsecured debt. This number is going to increase over the lean in the next quarters because new refinances we do now will come at the current interest levels, obviously. Overall, when we summarize that and reflecting the sales and the probable prolongations of the bonds, the current forecast says that the funds from operations for this financial year will lay around EUR 27 million-EUR 30 million. This doesn't reflect anymore, sales we are examining at the moment, but sales we do now will not have any material effect to the FFO in this current financial year anymore because, as I mentioned, it will be over in four and a half months already. Then I will jump to page 7, which shows you an overview of our portfolio. On the right-hand side, you can see in the map the properties of the subportfolio we have sold. And if you look at the left-hand side into the table with a gray light background, you can see the numbers end of March. Here you can see that actually everything is in order. WALT levels are more or less stable. We have 183 properties, which are valued at around EUR 1 billion. What you see here is that the vacancy rate has been stable at around 11.7%, although we have sold the big vacant Trier property. Unfortunately, in the meantime, we had got another vacant space in Unterwellenborn. It's an OBI Baumarkt where OBI DIY store where the franchisee has left and has gone to pension. Here we are already in negotiations with a potential successor, and we are very confident that we can present a new tenant within the coming weeks or months. And then the vacancy rate will drop again. The right-hand column in the table shows how the portfolio will look like after the sales of the subportfolio has been closed. So then we will have around 170 properties still, and the total annualized rent will be around EUR 72 million. What we'll see is, well, we expect a slight increase in the vacancy rate because the vacancy levels of the subportfolio were lower than the average vacancy rate in the whole portfolio, obviously. But I guess that's not really crucial here. Then I would jump to page number 9, which shows you the tenant structure still based on the current portfolio at the end of March. Here, everything is in order. Nothing has changed. Everything works pretty well. And we expect that this pie chart will look like the same also after the sales have closed. Then I would jump to page number 12. You notice, already, that shows you how the market values the property portfolio. So when you start from the right-hand side at the current share price level of EUR 2.70 per share, the market cap is around EUR 95 million. And when you then add up the outstanding debt of EUR 533 million after we have repaid bonds and loans out of the sales proceeds, then the share price evaluates the portfolio value at around EUR 630 million, which is an implied gross rental yield of 11.5%, which sounds very, very poor given the low risk profile of the portfolio. But of course, we have to do our homework before and have to prolong the bonds, which are weighing on the share price development, of course. But then I guess, there should be enough headroom for the share price to recover. Then I would jump to page number 14. That's the last page I would like to present here. That's the finance overview. Here, you can see all the numbers, which are connected to the finance side. But the most crucial chart here is on the left-hand side at the bottom. That shows you the maturity profile of the debt we have to refinance within the next 24 months. And you can see here when you start in at the left in 2024, that we have to refinance still around EUR 150 million. But as I mentioned, if you take the light gray box here, the EUR 70 million box, we are going to repay EUR 50 million of debt. And then the remainder of EUR 20 million together with a secured bond of EUR 35.9 million will be prolonged until 2025. And then the rest is EUR 33 million of normal senior secured bank financings allocated to Sparkasse, where we are already in these discussions. And the assumption is that once we have prolonged the bonds, then we can also prolong these normal bank financings with the same banks. And then the concept is that we take the collaterals behind the both prolonged bonds, which are now around 15 properties, which we have given as collaterals or which were also before given as collateral. They are valued at around EUR 100 million, after the last valuation. And this should enable us to refinance them at 50%-60% LTV levels, which will generate EUR 50-60 million cash. And this will suffice to repay the rest of the prolonged both bonds in the next year. That's the strategy. And then we will have some more capital market debt instruments, what we also have to refinance. And here, the concept is, or the thinking is that we, when you sum up, the dark blue boxes at about all years, yeah, which illustrating the normal bank refinancings, then that's an amount of EUR 300 million, normal loans outstanding. And compared to the portfolio size of around EUR 900 million, that's a very low LTV level of around 30%, which gives us more headroom of EUR 100-130 million, new cash which we can generate by refinancing, the normal bank loans. And this will suffice to repay all the capital market instruments then. So that's the concept we are going to implement. Yeah, that's it actually from my side. Now, Alex and me, we are keen to take your questions. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. Once again, to ask a question, please press star and one. The first question comes from the line of Oliver Krotta O.K. Consult. Please go ahead. Good morning, everyone. Thanks very much, Mr. Hellmuth, for that nice and exciting update. Do I understand that correctly that the refinancing is not connected at all to what happens with yeah our owner of the company Mr. Elgeti and his Obotritia and the funds that marked down by 70% as of now? So the bonds will not be related to that in their prolongation. Thank you. Hello, Mr. Krothi. Thanks for your question. I would answer this way. So, I mean, we have collaterals for the outstanding receivables towards Obotritia. That helps a lot. We are now waiting for Obotritia to repay gradually the outstanding amounts. There have been some repayments in the meantime. So I guess everything here goes into the right direction. It's obviously a point which we have to discuss with every lender which we do. But I guess the underlying property portfolio runs pretty well, and the banks like the business model. The only thing we have to solve now is the prolongation of the bonds because otherwise no bank is able to give new loans or to prolong any loans. Prolongation of the bonds is the first priority at the moment. The Obotritia thing is not a hindrance here. Oh, that's great to hear. Thank you very much. However, it's also news for me that Obotritia has started repaying by now. Has that been communicated in the past? Yeah. We have received some payments of Obotritia over the last six months. Yeah, actually, we have agreed upon confidentiality about that. But what I can say is that it goes into the right direction. Oh, yeah. Great news, actually. But you're still keeping the receivables marked down by up to 30% in the balance sheet. Sorry. Say again? That, even though they started repaying, you keep the markdown to 30%. So markdown by 70%, of the receivables of Obotritia to DKR in the balance sheet. You keep that for now. Yeah. We have decided not to quarterly reevaluate the receivables towards Obotritia. We will do it at year-end, when we also have to discuss with the auditors about that. We take all the repayments we can get in the meantime, but we deducted it from the last balance sheet position. And at the end of the year, we are going to reevaluate that, taking into account also the value of the underlying collaterals we have received at the next balance sheet date then. Great. Thanks a lot. One more question. In terms of the loss of the REIT status, is everything accounted for in terms of tax payments in the balance sheet as of now, or is there a rest to still be accounted? Yeah. Actually, at the end of last year, we have started to make the annual report as practically as a non-REIT company. We are still a legal REIT. We fight for a REIT status retrospectively, and we try to keep it. But that's not our decision. We are waiting for a decision of the Finanzamt Potsdam, what they are not going to be or not going to make before 2025. That's what they have told us. But from a cautionary or cautious perspective, we have decided to do the annual reports on the basis of a fully not tax-exempt company. That's why we have also accounted deferred taxes and so on. So we have implemented the full risk we have actually since the end of the last year. So the NTA we report is taking into account actually all risk we have. So but that's all included in the EPRA as of EUR 7.2 now, which took into consideration that the last EUR 10 million convertible would be converted in the future. So that's basically net, net, EPRA, right? Correct. Thanks very much. Once again, to ask a question, please press star and one on your telephone. There are no more questions at this time. I would now like to turn the conference back over to Christian Hellmuth for any closing remarks. Thank you very much for your time and your interest in the numbers. If you if you have further questions, please come around. You can email us or give us a call. We are there. Otherwise, we look forward to seeing you on our annual AGM, which takes place at May 31st already. So, yeah, maybe we see you there. Have a good time. Have a good day. Ladies and gentlemen, the conference is now over.