S IMMO AG: after a record year in 2011, net income for period up again
Consolidated net income for the first quarter up by 18% to EUR 6.4m.
• Rental income steady despite successful property disposals
• Balance sheet NAV up at EUR 7.06 per share
• FFO increased again to EUR 5.9m
• Dividend proposal for Annual General Meeting of EUR 0.10 per share
The results for the first quarter of 2012 for stock exchange listed S IMMO AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) continue last year’s successful performance. “A few weeks ago we published annual results with the highest recorded EBITDA in the Group’s history. In 2012 we shall be concentrating on further stabilising our revenues at their present high levels. We have closed the first quarter with success, and have even increased the consolidated net income for the period by 18.2%,” comments Ernst Vejdovszky, member of S IMMO’s Management Board.
Although the real estate assets were reduced by 3.9% compared to the year before following the sale of several properties at a profit, rental income for the first quarter of 2012 was down only very slightly by 0.6% to EUR 30.1m (Q1 2011: EUR 30.3m ). Gross profit from hotel operations was EUR 0.7m for the first quarter of 2012 (Q1 2011: EUR 1.2m). Last year there was a positive special effect that has to be taken into account: Hungary’s EU-presidency in the first half of 2011. The expense of property operations was reduced from EUR 16.9m in the first quarter of 2011 to EUR 16.3m in the first quarter of this year. The gross profit came to EUR 26.7m (Q1 2011: EUR 27.7m).
Property sales at above estimated values
In the first quarter of 2012 S IMMO took advantage of the continuing strong demand for properties and sold five residential properties in Berlin, an office building in Munich and a residential building in Vienna at above their estimated values. The proceeds of property disposals amounted to EUR 39.5m (Q1 2011: EUR 4.3m), and the gains on property disposals according to IFRS came to EUR 0.7m (Q1 2011: EUR 0.6m). Compared to the estimated values as at 30 September 2011, gains on property disposals amounted to EUR 4.2m. S IMMO’s administrative costs in the first quarter were once again reduced, down to EUR 3.7m (Q1 2011: EUR 4.3m). EBITDA decreased by a minimal 1.8% to EUR 23.6m (Q1 2011: EUR 24.1m).
Further increase in consolidated net profit for period
Gains from property valuations in the first quarter of 2012 came to EUR 3.9m (Q1 2011: EUR 5.0m) and were entirely attributable to the German portfolio. Overall, compared with the first quarter of 2011, EBIT fell 5.6% from EUR 26.6m to EUR 25.1m. Financing costs for the first quarter of 2012 amounted to EUR 16.3m (Q1 2011: EUR 17.6m), including a non-cash foreign exchange loss of EUR 2.6m. The Group’s consolidated net income for the quarter came out at EUR 6.4m (Q1 2011: EUR 5.4m). This was a respectable increase of 18.2% compared with the same period last year.
Key indicators at last year’s very high levels
S IMMO’s funds from operations (FFO) increased by an impressive 65.2% to EUR 5.9m in the first quarter of 2012 (Q1 2011: EUR 3.6m). Despite the lower gross profit from hotel operations, net operating income (NOI) of EUR 23.6m was almost unchanged compared with last year’s EUR 24.1m because the expenses for property management were reduced. As at 31 March 2012 balance sheet NAV stood at EUR 7.06 per share (31 December 2011: EUR 6.96 per share). The EPRA NAV, the inner value of the share calculated in accordance with the guidelines of the European Public Real Estate Association, was EUR 8.88 per share (31 December 2011: EUR 8.70 per share).
Successes in the German real estate market
S IMMO’s portfolio is diversified by property use type and by region, with around 60% of the property portfolio in Western Europe and roughly 40% in Central and Southeastern Europe. The focus is on European Union capital cities. As at 31 March 2012, the Group owned a total of 229 properties, with total usable space of some 1,400,000 m² and a carrying value of EUR 1,934.4m. The portfolio’s overall occupancy rate is an excellent 93.1%. The overall rental yield was 6.8%.
The targeted measures adopted within the scope of the refurbishment programme and the growth in the number of households in Berlin allowed the Group to achieve very encouraging increases in rental levels in Germany. At the same time, more and more investors are entering the market and creating an excellent climate for property transactions. In 2012 S IMMO is planning to sell around 5% of its portfolio with a value of at least EUR 100m.
The success of the Group’s operating activities has not yet had the desired effect on the capital markets. In the autumn of last year S IMMO launched a share repurchase programme, and so far 483,998 shares have been acquired. The programme is scheduled to continue until 31 May 2012. At the Annual General Meeting on 01 June 2012 the Management Board will propose the distribution of a dividend of EUR 0.10 per share. After 25 years, the S IMMO Share will then become a distributing share. The distribution for 2011 constitutes a capital repayment according to the Austrian Tax Law and is scheduled for 15 June 2012. The distribution for the S IMMO INVEST participating certificates will be based on the actual profit for the period for the first time. The distribution of EUR 3.85 per participating certificate took place on 18 May 2012. Furthermore, the Management Board will propose to the Annual General Meeting on 01 June 2012 new authorisation rights for the Management Board to repurchase further own shares.
With a clear focus on sustainable and stable value growth, S IMMO will continue to work on optimising the earnings potential of the property portfolio. In the medium term the Group will be concentrating on the Quartier Belvedere Central development project, part of one of Europe’s largest construction projects next to Vienna’s future Central Station. In successive stages, S IMMO and its partners will be constructing a mixture of office, hotel and retail properties with a gross floor space of around 130,000 m². Over the coming years the loan-to-value ratio will be reduced from its present level of 60% to under 55%. In the current economic environment, with only moderate inflation and low interest rates, S IMMO’s high quality property portfolio and lean management structures give the Group every reason to believe that it is well positioned for the coming quarters.
|01 – 03/2012||01 – 03/2011|
|Revenues from service charges||9.1||9.5|
|Revenues from hotel operations||7.7||8.4|
|Other operating income ||3.1||3.6|
|Expenses directly attributable to properties||-16.3||-16.9|
|Hotel operating expenses||-7.0||-7.2|
|Income from property disposals||39.5||4.3|
|Carrying value of property disposals||-38.8||-3.7|
|Gains on property disposals||0.7||0.6|
|Earnings before interest, tax, depreciation and amortisation (EBITDA)||23.6||24.1|
|Depreciation and amortisation||-2.3||-2.4|
|Gains / losses on property valuation||3.9||5.0|
|Operating result (EBIT)||25.1||26.6|
|Participating certificates results||-3.2||-3.5|
|Net income before taxes (EBT) ||5.6||5.5|
|Taxes on income||0.8||-0,1|
|Consolidated net income for the period||6.4||5.4|
|of which attributable to shareholders in parent company||6.0||2.8|
|of which attributable to non-controlling interests||0.4||2.7|
|Earnings per share (EUR)||0.09||0.04|
|Property indicators ||31 March 2012 |
|Total let floor space||m2||1,355,797|
|Gross rental yield||%||6.8|