S IMMO AG: Best result in company’s history
Net income for the year increased by 165% to EUR 204.3m
- EPRA NAV up 24.4% at EUR 14.62 per share
- Earnings per share improved to EUR 2.98
- Dividend totalling EUR 0.40 planned
Stock exchange listed S IMMO ended the financial year 2016 with a net income of EUR 204.3m (2015: EUR 77.2m), the best result in the company’s history. Ernst Vejdovszky, CEO of S IMMO AG, commented: “An important element of our business strategy is to take advantage of property cycles. In the past financial year, we generated substantial profits – primarily through the sale of a part of our Germany portfolio. This is also a key driver of our excellent results.”
Development of gross profit
In 2016, S IMMO AG increased its rental income to EUR 118.2m (2015: EUR 111.7m). Revenues from hotel operations (Vienna Marriott and Budapest Marriott Hotel) amounted to EUR 42.9m (2015: EUR 45.5m). The lower revenues compared to the previous year are due to the renovation of the Vienna Marriott Hotel in the first half of the year, in which around half of the available rooms were renovated. S IMMO’s total income amounted to EUR 198.8m, up on the previous year’s figure (2015: EUR 190.7m). Gross profit totalled EUR 106.0m (2015: EUR 105.2m).
Disposals in Germany
In the financial year 2016, S IMMO sold a total of around 1,500 residential units in Berlin and the Hamburg region – accounting for around one-third of the German residential portfolio in terms of area. With the sale, S IMMO secured the increases in value achieved by then for this portion of the portfolio.
Higher EBIT thanks to very strong revaluation gains
EBITDA for the financial year 2016 consequently increased to EUR 92.5m (2015: EUR 88.7m). Revaluation gains more than doubled in 2016, amounting to EUR 194.0m as at 31 December 2016 (2015: EUR 84.6m). The measures aimed at increasing the value of properties in Asset Management and in particular the constantly improving sentiment on the German property market played a part here.
Properties in Germany accounted for EUR 136.7m (2015: EUR 73.1m) of revaluation gains. Overall, revaluation gains for the Germany/Austria segments amounted to EUR 174.8m (2015: EUR 87.8m), while CEE/SEE accounted for EUR 19.2m (2015: EUR -3.2m) in total. EBIT consequently rose to EUR 278.7m (2015: EUR 165.7m), representing an increase of around 68% compared to 2015.
Net income at all-time high
EBT climbed to EUR 216.5m (2015: EUR 112.3m) – an increase of around 93% compared to the previous year. All in all, S IMMO ended the financial year 2016 with a record high consolidated net income of EUR 204.3m (2015: EUR 77.2m). Earnings per share consequently also improved substantially to EUR 2.98 (2015: EUR 1.17).
Significant rise in S IMMO share price
On the capital market, investors benefited from the company’s value-creating strategy as well. S IMMO’s share price rose by around 22% in 2016 and ended the year at EUR 10.00. It thus once again outstripped both the ATX, which posted an annual performance of 9.24%, and the sector index IATX, which increased by only 4.86%.
Due to the record result in 2016, the book value per share climbed to EUR 12.02 as at 31 December 2016 (31 December 2015: EUR 9.34). EPRA NAV per share posted an increase of 24.4% to EUR 14.62 as at 31 December 2016 (31 December 2015: EUR 11.75). As at 03 April 2017, the S IMMO share was quoting at EUR 11.41.
As an established dividend-paying stock, S IMMO wants its shareholders to profit from the record result with a distribution as well. At the Annual General Meeting on 08 June 2017, a dividend of EUR 0.30 plus a bonus dividend of EUR 0.10, resulting in a total payout of EUR 0.40, will be proposed.
Outlook for 2017
In the current year, S IMMO plans to take advantage of the favourable situation on several of its markets and is currently examining the sale of some, also larger, properties. Acquisitions are planned in cases where the price level is still attractive and where the opportunities are good. In particular, the focus is on medium-sized German cities where the yield potential is still high. The company will also continue to focus on its project developments.
Among other projects, S IMMO is developing a residential property in Vienna, constructing an office property in a prime location in Bucharest, extending the Sun Plaza shopping centre – also in Bucharest – and has begun an office development in Bratislava. At the same time, exciting projects are under way in Berlin. Friedrich Wachernig, member of S IMMO AG’s Management Board, adds: “In view of the current market conditions, we are increasingly focusing on our existing properties and also on our project developments. As well as in Austria and Germany, we are also operating in CEE again, where we are observing strong, sustainable and continuous economic growth.”
Consolidated income statement for the period 01 January 2016–31 December 2016
in EUR m / fair value method
|of which rental income||118.2||111.7|
|of which revenues from operating costs||37.7||33.5|
|of which revenues from hotel operations||42.9||45.5|
|Other operating income||3.4||3.5|
|Property operating expenses||-64.2||-55.8|
|Hotel operating expenses||-32.0||-33.2|
|Income from property disposals||229.9||15.9|
|Book value of property disposals||-224.7||-15.9|
|Gains on property disposals||5.1||0|
|Earnings before interest, tax, depreciation and amortisation (EBITDA)||92.5||88.7|
|Depreciation and amortisation||-7.8||-7.7|
|Results from property valuation||194.0||84.6|
|Operating result (EBIT)||278.7||165.7|
|Participating certificates result||-6.9||-4.6|
|Net income before tax (EBT)||216.5||112.3|
|Taxes on income||-12.1||-35.0|
|Consolidated net income||204.3||77.2|
|of which attributable to shareholders in parent company||198.5||78.2|
|of which attributable to non-controlling interests||5.9||-1.0|
|Earnings per share (in EUR)||2.98||1.17|