Clearly positive result in Q1, significant increase in value expected for Q2
- Rental income improved by 2.8% to EUR 32.0m
- EPRA NAV per share at EUR 25.05 as of 31 March 2021
- EBIT increased by EUR 30.7m to EUR 18.2m
- Property value analysis as of 30 April 2021 with growth of around EUR 85m
The listed real estate investment company S IMMO AG ended the first quarter of 2021 on a very positive note with net income for the period of EUR 9.9m, and is clearly positive despite the effects of the COVID-19 crisis. Bruno Ettenauer, CEO of S IMMO AG, commented: “Even though the figures for the first quarter of 2021 naturally still reflect COVID-related effects, the result again underscores S IMMO’s robust business model. We increased our rental income over the prior-year period, and the net income for the quarter of EUR 9.9m is not only solidly in positive territory, but is also substantially better than in the previous year. Furthermore, based on the value analysis of our German and Austrian properties we conducted as of 30 April 2021, we expect an increase in value of around EUR 85m. The results of this analysis underscore the quality and high value-enhancement potential of our portfolio.”
Rental income rose by around 2.8% over the prior-year period and came to EUR 32.0m (Q1 2020: EUR 31.1m). The owner-operated hotels were still impacted heavily by the COVID-19 pandemic in the first quarter of 2021. As the first quarter of 2020 was still largely unaffected by the negative consequences of the crisis, the gross profit from hotel operations decreased to minus EUR 1.3m in annual comparison (Q1 2020: plus EUR 1.6m).
Property management expenses rose in particular due to the additions to let properties and higher maintenance expenses, and totalled EUR 18.3m (Q1 2020: EUR 16.8m). Consequently, the gross profit came in at EUR 23.2m (Q1 2020: EUR 25.8m).
Conversely, the gross profit from letting (gross profit less the hotels GOP) was virtually unchanged in annual comparison and amounted to EUR 24.5m (Q1 2020: EUR 24.2m). Management expenses came to around EUR 5.1m (Q1 2020: EUR 4.4m), reducing EBITDA to EUR 18.1m (Q1 2020: EUR 21.4m).
Positive result from property valuation and increased EBIT
The results from property valuation were positive in the first quarter at EUR 2.5m, and substantially higher than in the prior year (Q1 2020: minus EUR 31.5m). This and the fact that the pandemic-related effects on the operating result were very limited led to a year-on-year EBIT increase of around EUR 30.7m to EUR 18.2m (Q1 2020: minus EUR 12.5m).
Solid net income for the period
The financial result improved by around EUR 7.9m to minus EUR 5.4m (Q1 2020: minus EUR 13.2m) above all due to non-cash effects. Compared with the previous year, the improved property valuation result caused higher deferred tax expenses, bringing income taxes to total expenses of EUR 2.9m (Q1 2020: income of EUR 4.3m).
Overall, the net income for the first quarter of 2021 came to a solid EUR 9.9m, which was also a substantial improvement over the prior year (Q1 2020: minus EUR 21.4m). Earnings per share were thus EUR 0.14 (Q1 2020: minus EUR 0.30).
The S IMMO share delivered very pleasing performance in the first quarter, and was listed at EUR 21.45 on 31 March 2021. The price increase and the associated higher investor interest are also connected to the voluntary takeover offer from IMMOFINANZ AG.
In January 2021, S IMMO issued the first green bond in its history with a nominal value of EUR 150m, a term of seven years and a coupon of 1.75%, clearly demonstrating the company’s commitment to sustainability to capital market participants.
Value analysis as of 30 April 2021
Especially the German market saw very dynamic development over the past months, and the Berlin rent cap law was ruled unconstitutional by the German Federal Constitutional Court in the middle of April. In light of the takeover offer from IMMOFINANZ AG, S IMMO conducted a value analysis of its German and Austrian portfolio as of 30 April 2021 with the assistance of an independent external appraiser. Based on this analysis, the company is expecting value growth of around EUR 85m as of this reference date.
Outlook for 2021
S IMMO AG anticipates that the recovery will accelerate further in all sectors and asset classes in the coming months and quarters. Herwig Teufelsdorfer, Member of S IMMO AG’s Management Board, noted: “Thanks to the increasing vaccination coverage, we can expect that the current opening steps will no longer have to be reversed. This will result in a substantially more positive economic environment and expectations for an increasingly robust economic upturn. We are thus very optimistic about the near future. Our liquidity situation is very solid, and we are currently evaluating attractive acquisition opportunities in Germany and CEE.” Friedrich Wachernig, Member of S IMMO AG’s Management Board, added: “Our express goal is to further increase our presence and sustainably bolster our market position in Eastern Europe. Our solid business model and diversified portfolio allowed us to navigate the crisis very successfully and are the perfect foundation for future growth.”
Update on the takeover offer from IMMOFINANZ AG
The offer documents were published on 19 May 2021. The Management Board will review these documents in detail together with the Supervisory Board and will then issue a statement to allow the shareholders to make a well-informed decision. It is important in any case to note at this time that the offer price of EUR 22.25 is well below the EPRA NAV, and does not take into account the value analysis of the real estate portfolio as of 30 April 2021 or further foreseeable increases.
Consolidated income statement for the period 01 January 2021–31 March 2021
in EUR millions / fair value method
|thereof rental income||32.0||31.1|
|thereof revenues from operating costs||9.1||9.6|
|thereof revenues from hotel operations||1.9||9.9|
|Other operating income||1.7||327|
|Property operating expenses||-18.3||-16.8|
|Hotel operating expenses||-3.2||-8.3|
|Income from property disposals||0||0|
|Book value of property disposals||0||0|
|Result from property disposals||0||0|
|Depreciation and amortisation||-2.4||-2.3|
|Results from property valuation||2.5||-31.5|
|Operating result (EBIT)||18.2||-12.5|
|Earnings before taxes (EBT)||12.8||-25.7|
|Taxes on income||-2.9||4.3|
|Consolidated net income for the period||9.9||-21.4|
|thereof attributable to shareholders in parent company||9.9||-21.4|
|thereof attributable to non-controlling interests||0||0|
|Earnings per share (in EUR)|