Sparkassen Immobilien AG starts 2010 with a strong first quarter
- Successful opening of both major development projects
- Further property disposals significantly above estimated values
- EBIT increased to EUR 15.8 million (Q1 2009: EUR 13.5m)
- Outlook: cash flow from operations to double starting in 2011
Stock exchange listed Sparkassen Immobilien AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) has started the financial year 2010 with a strong first quarter: the major financial indicators have improved significantly compared with the same period last year.
High quality property portfolio
These two international flagship projects – the shopping centres Sun Plaza and Serdika Center – have further strengthened Sparkassen Immobilien AG's high quality property portfolio. The Group has now added two more top quality properties in excellent locations and with long-term, reliable tenants to its portfolio.
The Group’s property investments at 31 March 2010 totalled EUR 1.847bn, as compared with EUR 1.828bn a year earlier. In the first quarter of 2010 a package of three properties in Vienna was sold significantly above estimated values. The portfolio now contains 253 properties with total usable space of 1.407 million m². The occupancy rate is 89%, the gross rental yield increased slightly to 6.8%.
Excellent operating performance
Rental income for the first quarter of 2010 was EUR 21.9m, compared with EUR 22.3m for the same period last year. Contributions to earnings from the two shopping centres opened in Bucharest and Sofia towards the end of the first quarter will make themselves felt in the quarters to come.
Expenses for property management declined – for the first quarter of 2010 they were EUR 10.6m, compared with EUR 11.4m a year earlier. Income from hotel operations rose slightly to EUR 7.1m, while the corresponding expense remained at the same level as in the comparison period last year.
As in 2009, office property formed the largest rental income segment by property use type, with 33.7%, followed by residential property with 31.4% and retail property with 30.0%. Hotels, with 4.9%, made up the smallest share, as they did a year ago. The Vienna Marriott and Budapest Marriott Hotels are operated under management agreements, and are not included here.
The gross profit in the first quarter of 2010 increased by 6% to EUR 19.7m.
Marked improvement in results
EBITDA for the first quarter of 2010 was EUR 18.1m (Q1 2009: EUR 15.9m). The operating profit (EBIT) improved significantly from EUR 13.5m in the comparison quarter last year to EUR 15.8m in the first quarter of 2010. The sharp increase in profit before taxes (EBT) from EUR 0.4m to EUR 4.1m is especially satisfactory.
Funds From Operations (FFO) in the first three months rose to EUR 9.1m (Q1 2009: EUR 6.8m), and EPRA NAV per share rose from EUR 8.13 at the end of 2009 to EUR 8.15 at 31 March 2010. Net operating income (NOI) increased from EUR 17.7m in the comparison period last year to EUR 18.6m, as a result of the changes in the portfolio in the first quarter of 2010 (property sales and opening of the shopping centres).
In the first quarter of 2010 operating cash flow fell slightly, to EUR 15.3m, as compared with EUR 15.9m in the same period last year. This is a reflection of the property sales and the fact that the shopping centres were only opened towards the end of the first quarter.
Successful progress with development projects
Within only three weeks, in the first quarter of 2010 Sparkassen Immobilien AG opened the biggest property developments in the Group’s history. The official opening ceremony for Romania’s largest shopping centre, Sun Plaza, took place on 25 February 2010. Only a few weeks later, on 16 March 2010, Bulgaria’s largest shopping centre, Serdika Center, opened its doors to the public.
The Neutor 1010 Project, an office and residential development with 11,000 m² of usable space in Vienna’s city centre, is in the final stages of completion, and will be opened in the third quarter of 2010. Three quarters of the commercial space has already been let long-term to tenants with first class credit ratings, and the upper floors consist of 34 luxury apartments, of which 24 have already been sold before completion. In Bratislava the Galvaniho 4 office building is in the process of being completed, and is already three-quarters let.
Sparkassen Immobilien AG’s land bank currently totals some 12 hectares, and consists of six parcels of land in Bratislava, Prague, Sofia and Bucharest.
s IMMO Share more than doubles its weighting in the IATX
Compared with its market value a year ago, s IMMO Share improved impressively, gaining 110% by 31 March 2010. The s IMMO INVEST participating certificate closed the first quarter down slightly on its closing price at the year end. A merger in the Austrian real estate sector meant that the IATX, Austria’s index of major Austrian property companies, required to be reweighted. The adjustment of the weighting factor means that as of 15 April 2010 s IMMO Share’s weighting in the IATX has more than doubled, from 8.7% to 18.2%.
Outlook for 2010/2011
Following the successful opening of the shopping centres in Bucharest and Sofia, further projects will be completed during the course of the year. These include the office space in the two shopping centres, the top-quality office and residential building Neutor 1010 in Vienna, and the Galvaniho Business Center in Bratislava.
Sparkassen Immobilien AG is expecting a significant improvement in rental revenues and cash flows in the current financial year. It is forecasting operating cash flows of EUR 75–85m in 2010. In the following year cash flows are set to increase to EUR 100m – more than double what they were in 2009.
Consolidated income statement for the three months ended 31 March 2010
EUR m / fair value basis
|whereof rental income||21.9||22.3|
|whereof income from service charges||6.6||6.3|
|whereof income from hotel operations||7.1||7.1|
|Other operating income||1.1||0.8|
|Property management expenses||-10.6||-11.4|
|Hotel operating expenses||-6.4||-6.5|
|Income from property disposals||56.7||0|
|Carrying values of property disposals||-54.3||0|
|Gains on property disposals||2.4||0|
|Profit before interest, taxes, property valuation adjustments, and depreciation and amortisation (EBITDA)||18.1||15.9|
|Depreciation and amortisation||-2.4||-2.4|
|Gains / losses on property valuations||0||0|
|Operating profit (EBIT)||15.8||13.5|
|Participating certificates results||-2.8||-2.8|
|Profit before taxes (EBT)||4.1||0.4|
|Taxes on income||1.9||0.04|
|Consolidated net profit / loss||6.0||0.5|
|of which attributable to shareholders in parent company||6.0||0.5|
|of which attributable to minority interests||0.04||-0.02|
|Earnings per share (EUR)||0.09||0.01|
|Property indicators||31 March 2010|
|Total usable space||m2||1.407m|
|Land bank||Number of plots||6|