S IMMO AG: after a record year in 2011, net income for period up again

Ad hoc notification

Consolidated net income for the first quarter up by 18% to EUR 6.4m.

• Rental income steady despite successful property disposals
• Balance sheet NAV up at EUR 7.06 per share 
• FFO increased again to EUR 5.9m 
• Dividend proposal for Annual General Meeting of EUR 0.10 per share

The results for the first quarter of 2012 for stock exchange listed S IMMO AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) continue last year’s successful performance. The Company has closed the first quarter with success, and has increased the consolidated net income for the period by 18.2%.

Gross profit
Although the real estate assets were reduced by 3.9% compared to the year before following the sale of several properties at a profit, rental income for the first quarter of 2012 was down only very slightly by 0.6% to EUR 30.1m (Q1 2011: EUR 30.3m ). Gross profit from hotel operations was EUR 0.7m for the first quarter of 2012 (Q1 2011: EUR 1.2m). Last year there was a positive special effect that has to be taken into account: Hungary’s EU-presidency in the first half of 2011. The expense of property operations was reduced from EUR 16.9m in the first quarter of 2011 to EUR 16.3m in the first quarter of this year. The gross profit came to EUR 26.7m (Q1 2011: EUR 27.7m).

Property sales at above estimated values
In the first quarter of 2012 S IMMO took advantage of the continuing strong demand for properties and sold five residential properties in Berlin, an office building in Munich and a residential building in Vienna at above their estimated values. The proceeds of property disposals amounted to EUR 39.5m (Q1 2011: EUR 4.3m), and the gains on property disposals according to IFRS came to EUR 0.7m (Q1 2011: EUR 0.6m). Compared to the estimated values as at 30 September 2011, gains on property disposals amounted to EUR 4.2m. S IMMO’s administrative costs in the first quarter were once again reduced, down to EUR 3.7m (Q1 2011: EUR 4.3m). EBITDA decreased by a minimal 1.8% to EUR 23.6m (Q1 2011: EUR 24.1m).

Further increase in consolidated net profit for period
Gains from property valuations in the first quarter of 2012 came to EUR 3.9m (Q1 2011: EUR 5.0m) and were entirely attributable to the German portfolio. Overall, compared with the first quarter of 2011, EBIT fell 5.6% from EUR 26.6m to EUR 25.1m. Financing costs for the first quarter of 2012 amounted to EUR 16.3m (Q1 2011: EUR 17.6m), including a non-cash foreign exchange loss of EUR 2.6m. The Group’s consolidated net income for the quarter came out at EUR 6.4m (Q1 2011: EUR 5.4m). This was a respectable increase of 18.2% compared with the same period last year.

Key indicators at last year’s very high levels
S IMMO’s funds from operations (FFO) increased by an impressive 65.2% to EUR 5.9m in the first quarter of 2012 (Q1 2011: EUR 3.6m). Despite the lower gross profit from hotel operations, net operating income (NOI) of EUR 23.6m was almost unchanged compared with last year’s EUR 24.1m because the expenses for property management were reduced. As at 31 March 2012 balance sheet NAV stood at EUR 7.06 per share (31 December 2011: EUR 6.96 per share). The EPRA NAV, the inner value of the share calculated in accordance with the guidelines of the European Public Real Estate Association, was EUR 8.88 per share (31 December 2011: EUR 8.70 per share).

Property portfolio
As at 31 March 2012, the Group owned a total of 229 properties, with total usable space of some 1,400,000 m² and a carrying value of EUR 1,934.4m. The portfolio’s overall occupancy rate is an excellent 93.1%. The overall rental yield was 6.8%.

In 2012 S IMMO is planning to sell around 5% of its portfolio with a value of at least EUR 100m. Over the coming years the loan-to-value ratio will be reduced from its present level of 60% to under 55%. Furthermore, the Management Board will propose to the Annual General Meeting on 01 June 2012 new authorisation rights for the Management Board to repurchase further own shares.

01 – 03/201201 – 03/2011
Revenues 46.948.3
Rental income 30.130,3
Revenues from service charges9.19.5
Revenues from hotel operations7.78.4
Other operating income 
Expenses directly attributable to properties-16.3-16.9
Hotel operating expenses -7.0-7.2
Gross profit
Income from property disposals 39.54.3
Carrying value of property disposals -38.8-3.7
Gains on property disposals
Management expenses-3.7-4.3
Earnings before interest, tax, depreciation and amortisation (EBITDA)
Depreciation and amortisation-2.3-2.4
Gains / losses on property valuation 3.95.0
Operating result (EBIT)
Financing costs -16.3-17.6
Participating certificates results-3.2-3.5
Net income before taxes (EBT) 
Taxes on income 0.8-0,1
Consolidated net income for the period
of which attributable to shareholders in parent company6.02.8
of which attributable to non-controlling interests 0.42.7
Earnings per share (EUR) 0.090.04
Property indicators  
31 March 2012
Standing propertiesunits229
Total let floor spacem21,355,797
Gross rental yield%6.8
Occupancy rate%93.1