S IMMO AG: Earnings increase to over EUR 20m Euros.
Results for the first three quarters 2011
- EBIT up by 63%
- Net profit for the period increased to EUR 20.3m
- Operating cash flow up by 40%
- Strong focus on further improving earnings performance
- Dividend payment proposal planned for next Annual General Meeting
The excellent performance of Austrian stock exchange listed S IMMO AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) in the first half of the year continued into the third quarter 2011. Rents were thoroughly satisfactory at EUR 91.8m (Q3 2010: EUR 75.5m). Income from hotel operations for the first three quarters climbed from EUR 27.1m in 2010 to EUR 29.3m this year. Profits from hotel operations were up 16.7% to EUR 6.9m. In the first nine months of 2011 S IMMO improved its gross profit by an impressive 30.9% to EUR 80.1m (Q3 2010: EUR 61.2m).
EBITDA up by roughly 40%
In the first three quarters of 2011, properties were sold in Austria and Germany. Proceeds from disposals came to EUR 40.5m and the gains on disposal came to a very satisfactory EUR 9.2m. EBITDA climbed significantly to EUR 76.6m (Q3 2010: EUR 55.0m), an increase of 39.4% compared with the same period last year. EBIT also increased, by roughly 63%, to EUR 74.0m (Q3 2010: EUR 45.5m).
For the nine months ending 30 September 2011, net financing result totalled EUR -40.3m, including a non-cash foreign exchange gain of EUR 3.3m, which was attributable to the rise of the EURO’s value against currencies in Central and Southeastern Europe. Overall, S IMMO’s consolidated net income for the period was a very impressive EUR 20.3m, compared with EUR 1.3m for the same period last year.
Operating cash flow up by 40%
S IMMO’s funds from operations (FFO) in the first three quarters improved markedly – by 45.7% – to EUR 32.9m, compared with EUR 22.6m for the same period last year. Including participating certificates expenses, FFO for the first nine months in 2011 was EUR 23.1m, compared with EUR 14.5m in 2010. The Group’s excellent performance was also reflected in the improved NOI, which rose from EUR 57.5m last year to EUR 75.0m. The operating cash flow amounted to EUR 74.0m, a 40.0% increase compared with the same period last year.
As at 30 September 2011 the balance sheet NAV was EUR 7.11 per share (31 December 2010: EUR 7.07 per share). The EPRA NAV, the net asset value of the share calculated in accordance with the guidelines of the European Public Real Estate Association, was EUR 8.64 per share (31 December 2010: EUR 8.34 per share).
Dividend payment proposal planned for next Annual General Meeting
On the assumption that the financial year 2011 will be a successful year, S IMMO AG’s Management Board intends to propose the distribution of a dividend of EUR 0.10 per share at the Annual General Meeting in June 2012.
Participating certificate and share repurchase programmes
At the balance sheet date the S IMMO Share price stood at a discount of more than 50% to its net asset value. The year-to-date performance showed a drop of 24.8%. To improve the liquidity of the S IMMO Share and also to attract new investors, the company has been working with a second market maker since August 2011. As a further initiative, S IMMO launched a share repurchase programme at the beginning of October which, in view of the current difference between share price and net asset value per share, Management at present considers to be the most sensible investment possible.
Streamlining the capital structure requires addressing the participating certificate issue, which S IMMO’s new repurchase programme for the certificates is intended to do. Overall, approximately 12% of the participating certificates issued have now been repurchased. The annual participating certificate distribution will in future be based on actual results.
Consolidated income statement for the nine months ended 30 September 2011
EUR m / fair value basis
|01 – 09/2011||01 – 09/2010|
|Revenues from service charges||30.8||23.6|
|Other operating income ||5.1||3.6|
|Expenses directly attributable to properties||-54.5||-47.5|
|Hotel operating expenses||-22.5||-21.2|
|Income from property disposals||40.5||81.2|
|Carrying value of property disposals||-31.3||-74.4|
|Gains on property disposals||9.2||6.8|
|Earnings before interest, tax, depreciation and amortisation (EBITDA)||76.6||55.0|
|Depreciation and amortisation||-7.0||-7.2|
|Gains / losses on property valuation||4.3||-2.2|
|Operating result (EBIT)||74.0||45.5|
|Participating certificates results||-9.8||-8.1|
|Net income before taxes (EBT) ||23.9||4.5|
|Taxes on income||-3.7||-3.3|
|Consolidated net income for the period||20.3||1.3|
|of which attributable to shareholders in parent company||16.7||1.6|
|of which attributable to non-controlling interests||3.6||-0.4|
|Earnings per share (EUR)||0.24||0.02|
|Property information||30 September 2011|
|Gross rental yield||(%)||6.6|