S IMMO AG: Successful start into 2016
Significant increase in value for residential properties in Berlin
- Rental income up
- FFO I advances by 39%
- Net income for the period increases to EUR 27.6m
Following the record annual results in 2015, stock exchange listed S IMMO AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) continued the positive trend in the first quarter of 2016. According to Ernst Vejdovszky, CEO of S IMMO AG, “We are seeing highly dynamic price development on Berlin’s residential property market. Under these conditions, our residential properties enjoyed significant increases in value, which in turn led to a sharp rise in our results. But other key operating figures also developed very positively.”
Development of earnings
During the first three months of 2016, S IMMO’s total revenues amounted to EUR 46.3m (Q1 2015: EUR 44.3m), exceeding the prior-year figure. The rental income included in this figure came to EUR 29.2m (Q1 2015: EUR 27.2m). Gross operating profit from hotel operations totalled EUR 0.4m (Q1 2015: EUR 1.2m). This decline is due to the overhaul of the Vienna Marriott Hotel, which involves a temporary reduction in room occupancy.
The gross profit was EUR 24.0m (Q1 2015: EUR 23.3m). EBITDA increased to EUR 20.3m in the first quarter of 2016 (Q1 2015: EUR 19.7m). This increase can mainly be attributed to the rise in rental income as well as a strong like-for-like performance.
Revaluation gains developed very positively, amounting to EUR 36.9m as at 31 March 2016 (Q1 2015: EUR 0.8m). This was due to the positive development of the Berlin residential property market. Overall, EBIT was up significantly on the previous year at EUR 55.3m (Q1 2015: EUR 18.6m).
EBT came to EUR 34.7m, which is also considerably higher than the prior-year figure (Q1 2015: EUR 9.6m). Due to the effects described above, the net income for the period increased by EUR 19.5m to EUR 27.6m (Q1 2015: EUR 8.1m). Earnings per share also improved and came to EUR 0.40 (Q1 2015: EUR 0.11).
FFO I, which is a key indicator for the operating performance of a property company and does not include the sale of standing properties, rose by 39% and totalled EUR 8.8m as at 31 March 2016 (Q1 2015: EUR 6.3m).
Capital market
The S IMMO share posted a slight loss of 0.62% during the first quarter of the year and closed at EUR 8.149 as at 31 March 2016. However, the share rallied in the subsequent weeks and was listed at EUR 8.710 on 20 May 2016.
In view of the excellent results for 2015, the Management Board will submit a proposal to raise the dividend to EUR 0.30 per share to the Annual General Meeting on 03 June 2016. Sustainability and predictability are key factors in S IMMO’s dividend policy.
Outlook for 2016
The first quarter saw very pleasing revaluations in Berlin, and S IMMO continues to see very dynamic development on this market. In addition, S IMMO is working on various development projects. For instance, an extensive renovation of the Sun Plaza shopping centre is already in progress in Bucharest – a total of 20,000 m² is being redesigned in order to create space for up to 40 more shops. Preparations are also under way for several exciting projects in Berlin and Vienna that will get off the ground this year.
Friedrich Wachernig, member of S IMMO’s Management Board, comments: “We started this year full of optimism and our performance in the first quarter only strengthened this. Our strategy is opening up lots of potential and the environment for property companies remains highly favourable. As a result, our outlook for the rest of 2016 is very positive.”
| 01 – 03/2016 | 01 – 03/2015 |
|---|---|---|
Revenues | 46.3 | 44.3 |
whereof rental income | 29.2 | 27.2 |
whereof revenues from operating costs | 9.9 | 8.5 |
whereof revenues from hotel operations | 7.2 | 8.7 |
Other operating income | 0.5 | 0.5 |
Expenses directly attributable to properties | -16.1 | -14.1 |
Hotel operating expenses | -6.8 | -7.4 |
Gross profit | 24.0 | 23.3 |
Income from property disposals | 1.4 | 6.7 |
Book value of property disposals | -0.8 | -6.7 |
Gains on property disposals | 0.5 | 0 |
Management expenses | -4.2 | -3.7 |
EBITDA | 20.3 | 19.7 |
Depreciation and amortisation | -1.9 | -1.9 |
Gains on property valuation | 36.9 | 0.8 |
Operating result (EBIT) | 55.3 | 18.6 |
Financing costs | -20.1 | -13.0 |
Financing income | 0.8 | 4.2 |
Results from companies measured at equity | 0 | 0.8 |
Participating certificates results | -1.4 | -1 |
Net income before tax (EBT) | 34.7 | 9.6 |
Taxes on income | -7.1 | -1.5 |
Consolidated net income | 27.6 | 8.1 |
of which attributable to shareholders in parent company | 27.0 | 7.5 |
of which attributable to non-controlling interests | 0.6 | 0.6 |
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Earnings per share (EUR) | 0.40 | 0.11 |
