Best annual profit in the company’s history
- Rental income up by 6.5% in annual comparison
- Property valuation result of EUR 198.7m
- Record earnings per share of EUR 3.24
- EPRA NAV at EUR 29.29 per share
- Dividend proposal: EUR 0.65 per share
Results from property valuation that were clearly positive in all regions and a record profit for the period and earnings per share confirm the steep upward trajectory of the listed real estate investment company S IMMO AG. Bruno Ettenauer, CEO of S IMMO, commented: “Despite the challenges presented in 2021 above all by the takeover offer from IMMOFINANZ and the continued pandemic, we resumed our growth and were back at pre-crisis levels at the halfway point of the year. Our multi-asset approach and focus on holding properties over longer periods proved their worth, and our total return saw double-digit growth. We intend to continue on this successful course in 2022.”
Substantial increase in gross profit
The rental income for the 2021 financial year totalled EUR 131.3m and was 6.5% higher than the prior-year level of EUR 123.3m. This increase in times of crisis can be attributed to property acquisitions, prudent management of the portfolio properties, and the high quality of the portfolio. Property management expenses amounted to EUR 66.8m (2020: EUR 66.8m), remaining largely unchanged despite property acquisitions and associated increases in operating costs. This was due above all to substantial improvements in the write-off and revaluation of receivables.
The gross profit from hotel operations improved considerably over the prior year to EUR 7.5m (2020: EUR -0.3m). However, it was still substantially lower than before the onset of the pandemic (2019: EUR 16.9m) due to the negative impacts of COVID-19. It remains to be seen how city tourism will develop in the coming quarters. The gross profit for the entire property holdings, which reflects the operating performance of the rented properties and of the owner-operated hotels, increased substantially to EUR 109.5m (2020: EUR 91.5m) and was thus at around the same level as in 2019 (EUR 109.7m).
Significant improvement in the valuation and financial result
Management expenses rose from EUR 20.4m in 2020 to EUR 28.2m primarily due to a series of one-off effects, including outlay relating to the takeover offer by IMMOFINANZ AG and changes in the Management Board.
At EUR 198.7m, the result from property valuation saw substantial improvement (2020: EUR 39.1m). Germany accounted for EUR 156.0m (2020: EUR 52.7m) of this, Austria for EUR 31.8m (2020: EUR 8.7m) and CEE for EUR 10.9m (2020: EUR -22.3m). This lent weight to the uptrend of the first half of the year, and all regions also posted a positive net valuation result, unlike in the prior year.
EBIT improved more than 2.5 times in annual comparison and came to EUR 270.3m (2020: EUR 101.0m). The financial result advanced to EUR 0.7m (2020: EUR -29.4m). This can be attributed to the dividend earnings from the investments in CA Immobilien Anlagen AG and IMMOFINANZ AG as well as to the positive net valuation effects for derivatives and the mandatory convertible IMMOFINANZ AG bond until it was converted into shares.
Record profit for the period and earnings per share
Due to the aforementioned effects, the profit for the period more than quadrupled in annual comparison and reached the best level recorded in the company’s history at EUR 230.6m (2020: EUR 56.9m). The earnings per share also rose in line with this to EUR 3.24 (2020: EUR 0.79).
The S IMMO share performed well over the course of the year and ended 2021 at a closing price of EUR 21.75. With a gain of 28.24% through the end of the year, our share outperformed some international indices, but lagged behind the ATX, which turned in the strongest result on the international capital market, advancing by 38.9%. From a shareholder perspective, the past year was altogether turbulent with the takeover offer submitted by IMMOFINANZ and then rescinded at the end of June. The previously largest shareholder in our company, IMMOFINANZ AG, was acquired by CPI Property Group S.A. at the beginning of 2022, the latter now holding 42.55% of the S IMMO shares in total. In terms of the dividend for this year, the Management Board intends to propose a disbursement of EUR 0.65 per share at the Annual General Meeting based on the very successful performance over the last financial year.
S IMMO received a request from CPI Property Group on 14 April 2022 to convene an extraordinary shareholders’ meeting. The proposed resolution is the complete elimination of the voting rights cap, with the effect of the resolution being contingent upon merger control approval. CPI Property Group also announced its intention to submit a mandatory takeover offer to the shareholders of S IMMO after entry of the amendment of the articles of incorporation in the Austrian trade register. The Management Board and Supervisory Board of S IMMO AG will review the request for the convening of an extraordinary shareholders’ meeting and decide on further steps.
Focus on core business
After the sale of the equity holdings in CA Immobilien Anlagen AG in 2021 and in IMMOFINANZ AG in 2022, S IMMO is now concentrating fully on its core business of leasing and the operation of profitable assets in Germany, Austria and Central and Eastern Europe and the acquisition of properties with high earnings potential. By acquiring the two office buildings Campus 6.2 and 6.3 in Bucharest as well as BudaPart Gate in Budapest, we already added top properties to our portfolio in 2021. The next very successful acquisition took place at the beginning of April 2022 with the signing of the Expo Business Park in Bucharest. Herwig Teufelsdorfer, CIO of S IMMO AG, noted: “Our investment strategy not only increases the quality of our portfolio, but also its earnings generation and sustainability. The recently acquired properties all boast high user quality and environmental standards and make substantial contributions to our bottom line. We have a strong liquidity base and will continue to pursue our investment aims.”
Outlook for 2022
Even though adverse economic and geopolitical effects such as the COVID-19 pandemic and the war in Ukraine are beyond the influence of S IMMO, the company is optimistic about the coming months. Friedrich Wachernig, COO of S IMMO, added: “The results for the reporting period are clear evidence of how robust and successful our business model is even in times of crisis, and reinforces our confidence that S IMMO continues to be well positioned. Acquisitions, project developments and the ongoing intensive work on our portfolio form the basis for continued, profitable long-term growth.”
Consolidated income statement for the period 01 January 20201–31 December 2021
|in EUR millions / fair value method||01–12/2021||01–12/2020|
|thereof rental income||131,3||123,3|
|thereof revenues from operating costs||34,4||32,9|
|thereof revenues from hotel operations||31,2||17,8|
|Other operating income||3,2||2,5|
|Property operating expenses||-66,8||-66,8|
|Hotel operating expenses||-23,7||-18,1|
|Income from property disposals||39,6||46,9|
|Book value of property disposals||-39,6||-46,9|
|Result from property disposals||0||0|
|Earnings before interest, tax, depreciation and amortisation (EBITDA)||81,3||71,1|
|Depreciation and amortisation||-9,6||-9,2|
|Results from property valuation||198,7||39,1|
|Operating income (EBIT)||270,3||101,0|
|Results from companies measured at equity||6,2||5,0|
|Earnings before taxes (EBT)||271,0||71,6|
|Taxes on income||-40,5||-14,7|
|Consolidated net income||230,6||56,9|
|thereof attributable to shareholders in parent company||229,5||56,5|
|thereof attributable to non-controlling interests||1,0||0,4|
|Earnings per share (in EUR)||3,24||0,79|
Balance structure as of 31 December 2021
|EUR '000||EUR '000||EUR '000||EUR '000|
|ASSETS||EQUITY AND LIABILITIES|
|Non-current assets||Shareholders‘ equity|
|Investment properties||Share capital||256.249||259.397|
|Rented properties||2.642.929||2.316.747||Capital reserves||160.612||173.855|
|Properties under development and undeveloped land||77.034||38.175||Other reserves||1.245.361||947.299|
|Other plant and equipment||5.536||6.346||1.666.303||1.383.828|
|Intangible assets||358||251||Non-current liabilities|
|Interests in companies measured at equity||27.367||24.376||Issued bonds|
|Group interests||5.346||4.609||Other financial liabilities||646.819||497.215|
|Loans to companies measured at equity||398.001||497.721||Provisions for employee benefits||920.201||873.801|
|Other financial assets||561||1.178||Other liabilities||1.264||1.349|
|Deferred tax assets||3.267.966||3.007.020||Deferred tax liabilities||348||957|
|Trade receivables||6.904||4.270||Issued bonds|
|Loans to company measured at equity||14.238||13.787||Financial liabilities||0||28.529|
|Other financial assets||22.928||28.477||Income tax liabilities||138.581||99.273|
|Other assets||375.823||64.503||Trade payables||6.070||2.384|
|Cash and cash equivalents||420.155||111.245||Other liabilities||5.673||3.616|
|Assets held for sale||0||4.345||200.175||169.573|