S IMMO AG: successful start to 2013

Ad hoc notification

EBITDA up 6.8%

  • EBT increased to EUR 9.3m
  • Funds from operations up by 42.6%
  • Net profit for the period: EUR 6.5m
  • Successful property sales in the first quarter

For stock exchange listed S IMMO AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) the results for the first quarter of 2013 confirmed its successful record over the past quarters. Key performance indicators were up again.

Gross profit up again
Total income for the first quarter of 2013 was EUR 46.7m (Q1 2012: EUR 46.9m). As expected, the rental income of EUR 29.4m was lower than in the first quarter of 2012 (EUR 30.1m) because of the successful property sales during the course of that year. The property portfolio was reduced by 6.3%, however, rental income fell by only 2.4%. Quarterly revenues from hotel operations (revenues from the Vienna and Budapest Marriott Hotels, both operated under management agreements) increased by 3.6%, from EUR 7.7m to EUR 8.0m, confirming the positive trend. The gross operating profit (GOP) from hotel operations improved by 12.4% to EUR 0.8m (Q1 2012: EUR 0.7m). The overall gross profit rose by 2.6% to EUR 27.4m, compared with EUR 26.7m in the same period last year.

Successful property sales
S IMMO AG’s objective in 2013 is to sell approximately 5% of its property portfolio at a profit during the course of the year, and in the first quarter it made a successful start. At 31 March 2013 sale proceeds to date totalled EUR 32.6m, compared with EUR 39.5m in the first quarter of 2012. The gains on sale came to EUR 1.4m (Q1 2012: EUR 0.7m), while compared with the fair values as at 30 September 2012, the gains were EUR 5.3m.

Success through efficiency
The reduction in property related costs and administration expenses resulted in an increase in EBITDA for the quarter ended 31 March 2013 to EUR 25.2m (Q1 2012: EUR 23.6m), an increase of 6.8%. EBIT also increased by 7.1%, to EUR 26.9m (Q1 2012: EUR 25.1m), and EBT was up from EUR 5.6m to EUR 9.3m. Despite an increase in the tax charge to EUR -2.8m (Q1 2012: EUR 0.8m) and losses on foreign currency valuation of EUR 1.8m (Q1 2012: EUR 2.6m), the profit for the period was up to EUR 6.5m (Q1 2012: EUR 6.4m).

Key performance indicators up
Funds from operations (FFO) for the first quarter of 2013 improved by an impressive 42.6% to EUR 8.4m, compared with EUR 5.9m a year earlier. Efficiency gains led to an improvement in net operating income (NOI), which increased to EUR 25.1m (Q1 2012: EUR 23.6m). Operating cash flow for the quarter came to EUR 26.2m (Q1 2012: EUR 22.6m). In the first quarter of 2013 both balance sheet net asset value (book value per share) and EPRA net asset value rose again: Balance sheet NAV at 31 March 2013 stood at EUR 7.37 (31 December 2012: EUR 7.17) per share, while EPRA NAV was EUR 9.34 (31 December 2012: EUR 9.18) per share.

Capital markets
Like most other Prime Market stocks, the S IMMO Share declined in value, and closed the first quarter at EUR 4.69. Its performance was however still better than both the IATX and the ATX, and over the past twelve months it appreciated by 4.5%. Since April 2013, S IMMO is again working with a second market maker in Frankfurt. This makes it possible to buy the S IMMO Share through XETRA DAX and via the internet portal FLATEX, one of Germany’s leading online brokers.

Outlook for 2013
In a still challenging economic environment, S IMMO continues to pursue its tried-and-tested strategy, and deliberately invests in four property segments. The focus of investment is on properties in capital cities within the European Union – from Berlin via Prague and Vienna to Bucharest. This allows the Group to take advantage of differences in property cycles: In 2013 it will again be selling around 5% of the existing property portfolio, mainly in Vienna, Hamburg and Berlin, and thereby realising profits. The sale proceeds will among other things be used to take up attractive investment opportunities in Berlin. The first acquisition was the Sonnenallee office property. Sale proceeds are also being used to reduce the loan to value ratio.

01 – 03/201301 – 03/2012
Revenues 46.746.9
Rental income 29.430.1
Revenues from operating costs9.39.1
Revenues from hotel operations8.07.7
Other operating income2.33.1
Expenses directly attributable to properties-14.5-16.3
Hotel operating expenses -7.2-7.0
Gross profit27.426.7
Proceeds from property disposals 32.639.5
Carrying value of property disposals -31.2-38.8
Gains on property disposals
Management expenses-3.6-3.7
Earnings before interest, tax, depreciation and amortisation (EBITDA)25.223.6
Depreciation and amortisation-2.4-2.3
Results from property valuation 4.13.9
Operating result (EBIT)26.925.1
Financing costs -14.4-16.3
Participating certificates results-3.2-3.2
Net income before taxes (EBT) 9.35.6
Taxes on income -2.80.8
Consolidated net income for the period6.56.4
of which attributable to shareholders in parent company5.86.0
of which attributable to non-controlling interests 0.70.4
Earnings per share (EUR) 0.090.09