May 14 (Bloomberg) -- Deutsche Wohnen AG, Germany’s second-largest residential landlord by market value, said first-quarter profit rose 91 percent after the company took advantage of rising share prices to buy more homes.
Funds from operations excluding divestments, a measure of a property company’s ability to generate cash, climbed to 59.1 million euros ($81 million), from 30.9 million euros a year earlier, Deutsche Wohnen said in a statement today. FFO per share rose more slowly, to 21 cents from 20 cents a year earlier, as the Berlin-based company issued more stock to pay for acquisitions.
Deutsche Wohnen has been buying apartments to take advantage of rising rents, its ability to raise capital on the stock market at favorable terms and low interest-rate loans. The company owns about 149,000 apartments in German cities including Berlin and Frankfurt after tripling its holdings in the past two years. It’s on track to complete its acquisition of GSW Immobilien AG this year, which will make it Germany’s second-largest apartment owner after Deutsche Annington Immobilien SE.
“The integration of GSW Group is proceeding according to plan,” the company said in the statement.
The company repeated that FFO this year will be at least 210 million euros. Deutsche Wohnen’s stock ended trading in Frankfurt yesterday at 15.70 euros, 4.6 percent higher than a year ago.
Net income increased to 44.3 million euros from 26.2 million euros a year earlier, Deutsche Wohnen said. Earnings per share fell to 15 cents from 17 cents.
Profit from Deutsche Wohnen’s main business of renting apartments climbed to 131.7 million euros from 70.9 million euros.
German residential landlords are benefiting from rising rents as young Germans seeking jobs and immigrants from European countries hurt by the financial crisis move to cities such as Berlin, Frankfurt and Hamburg.
Deutsche Wohnen has a market value of about 4.5 billion euros compared with Deutsche Annington’s 4.8 billion euros.
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