S IMMO AG plans to raise dividend to EUR 0.24
EBIT increases by 45% to EUR 138.7m.
- Net income up more than 20%
- EPRA NAV advances to EUR 10.63
- Capital market measures secure strategic possibilities
- Consolidated earnings to be boosted in 2015 again
The stock exchange listed S IMMO AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) has confirmed the preliminary figures released on 25 March 2015. In the 2014 financial year, S IMMO was able to once again significantly improve its net income, and the year marks a turning point for the company. Ernst Vejdovszky, CEO of S IMMO AG, comments: “After doing our homework in the field of efficiency in recent years and laying the groundwork for future growth, we are now profiting from the low interest rate conditions and good economic performance in our markets. The outstanding results for 2014 thus justify a dividend increase. Consequently, we will propose a dividend distribution of EUR 0.24 to the Annual General Meeting.”
Friedrich Wachernig, Member of S IMMO AG’s Management Board, adds: “It is our stated goal to continue on a course of profitable growth and increase the company’s value for our shareholders over the long run. We are planning on investments of around EUR 180m this year, with about two thirds of this focused in Germany. But beyond that, we are also looking at interesting opportunities in our markets in Austria, Central and Southeastern Europe.”
EBIT increases by 45%, driven by upswing in core markets
Rental income amounted to EUR 111.8m in 2014 (2013: EUR 116.7m), reflecting the property sales as expected. Revenues from hotel operations increased to EUR 10.8m (2013: EUR 10.5m). Gross profit for the reporting period was EUR 105.7m (2013: EUR 109.6m). During the 2014 financial year, a total of six properties were sold, with gains from these sales amounting to EUR 51.6m (2013: EUR 128.1m).
In the past financial year, property valuations were supported by the positive market development in the regions where S IMMO operates and amounted to EUR 56.6m (2013: EUR 6.9m). Valuations developed very well across all segments. Especially the positive trend on the German property market continued, as reflected by the valuation result for properties in Germany, which accounts for EUR 33.4m (2013: EUR 23.8m).
Due to this positive development of the markets, S IMMO was able to boost EBIT to EUR 138.7m (2013: EUR 95.8m), marking an increase of 44.8% on the previous year.
Net income rises again
The 2014 financing result (excluding the participating certificate result) was EUR -71.7m (2013: EUR -53.9m), which also includes effects from the valuation of derivative financial instruments and expenses from currency translation. Due to the exchange of participating certificates into a seven-year-bond, which was issued in June 2014, the expenses for participating certificates decreased to EUR 7.5m (2013: EUR 9.3m). Overall, S IMMO ended the 2014 financial year with a net income of EUR 33.8m (2013: EUR 28.1m), marking an increase of 20.6% compared to the previous year.
Capital market: good performance and a higher dividend
S IMMO also made important progress on the capital market last year. In autumn, for example, the company had great success in placing a EUR 100m bond. In order to optimise and streamline the company’s capital structure, the amount of participating certificate capital was reduced significantly. These measures give S IMMO additional strategic possibilities.
The S IMMO share ended 2014 with a gain of 16.64%, thus beating the ATX and the IATX. For the first time in five years, the share price edged over six euros. EPRA-NAV per share rose to EUR 10.63 as at 31 December 2014 (31 December 2013: EUR 9.73). The performance during the current financial year has also been particularly positive. The S IMMO share closed the first quarter of 2015 at a price of EUR 8.45, recording an increase of 36.95% since the beginning of the year.
The Management Board feels that the further improvement in the business results justifies an increase in the dividend. Consequently, a proposal to raise the dividend to EUR 0.24 per share will be submitted to the Annual General Meeting on 03 June 2015. The positioning of the S IMMO share as a sustainable dividend-paying stock is in line with the company’s long-term strategy.
Outlook for 2015: investments and a further increase in consolidated net income
S IMMO is benefiting from the current low-interest environment and the positive economic developments in its markets. The company is taking advantage of these factors to make investments in the countries in which it operates. Roughly two thirds of the planned investments involve acquisitions in Germany. The remaining funds are earmarked for opportunistic purchases and development projects in Austria as well as in Central and Southeastern Europe. In Germany, S IMMO will focus more on the commercial segment, placing emphasis on properties in Berlin and the area surrounding the German capital. Existing plots will be used for developments, and standing properties and land plots will also be purchased. Further investments are also planned in residential properties.
Ernst Vejdovszky summarises: “Our strategy remains unchanged: We will continue to concentrate on commercial and residential properties in our regions. This gives us the perfect basis to grow profitably in the future.”
In the current financial year, S IMMO intends to improve its consolidated net income yet again.
Consolidated income statement as per IFRS for 01 January 2014 to 31 December 2014 in EUR m
|01 – 12/2014||01 – 12/2013|
|Revenues from operating costs||34.5||36.8|
|Revenues from hotel operations||42.1||40.2|
|Other operating income||4.7||6.2|
|Expenses directly attributable to properties||-56.2||-60.6|
|Hotel operating expenses||-31.3||-29.7|
|Income from property disposals||51.6||128.1|
|Book value of property disposals||-51.4||-121.7|
|Gains on property disposals||0.2||6.4|
|Depreciation and amortisation||-7.6||-12.0|
|Gains on property valuation||56.6||6.9|
|Operating profit (EBIT)||138.7||95.8|
|Results from companies measured at equity||0.9||-1.5|
|Participating certificates results||-7.5||-9.3|
|Net income before tax (EBT)||59.5||32.6|
|Taxes on income||-25.7||-4.6|
|Consolidated net income for the period||33.8||28.1|
|of which attributable to shareholders in parent company||31.0||27.3|
|of which attributable to non-controlling interests||2.8||0.7|
|Earnings per share (EUR)||0.46||0.41|