S IMMO AG defies crisis to achieve operating success
- Rental income up by around 19% year-on-year
- EBITDA at record level of EUR 106.1m
- Market-related value adjustment of the real estate portfolio to EUR 3,273.8bn.
- IFRS-NAV per share rises to EUR 24.07
Robust operating figures and a significant increase in rental income with record EBITDA and gross profit demonstrate the stability of S IMMO's business model in a highly volatile macroeconomic environment. Herwig Teufelsdorfer, member of S IMMO's Management Board, comments: "2022 was generally defined by challenging circumstances. So I am all the more delighted by the positive development in our operating business. In connection with the recent devaluations, mainly driven by interest rates, the compensatory positive effects can be seen in the result of the revaluation of interest rate hedges. Our cautious financing strategy allowed us to achieve a clearly positive net income of EUR 18.9m in this extraordinary year as well and to further increase our IFRS-NAV. On the basis of this resilience, we are also plotting the course for a strategy amended in line with the new conditions."
Gross profit and EBITDA at record level
Rental income for the 2022 financial year amounted to EUR 155.7m (2021: EUR 131.3m), around 19% higher than the previous year's level. This increase was thanks to acquisitions as well as considerable like-for-like improvements in the existing portfolio. Revenues from hotel operations improved to EUR 56.4m (2021: EUR 31.2m), thus almost returning to the pre-pandemic level of 2019 (EUR 59.1m). In total, revenues rose from EUR 196.9m to EUR 260.5m in 2022.
Expenses from property operations increased to EUR 79.5m as a result of inflation and property purchases (2021: EUR 66.8m). The increase was mainly due to higher operating costs, though these were mostly passed on.
Gross profit from hotel operations improved significantly from EUR 7.5m to EUR 13.4m, while the gross profit for the property portfolio as a whole, which reflects the operating performance of rental properties and owner-operated hotels alike, rose sharply to EUR 140.2m (2021: EUR 109.5m), the highest level in the company's history. EBITDA was also at a new record level in the company's history at EUR 106.1m (2021: EUR 81.3m).
Significant improvement in financial result
After several years of high valuation gains, the property valuation result was negative at EUR -78.4m (2021: EUR 198.7m). In spite of the high level of the operating result, EBIT therefore declined to EUR 18.0m (2021: EUR 270.3m). The financial result improved considerably to EUR 16.9m (2021: EUR 0.7m) despite the absence of dividend income following the sale of all shares in CA Immobilien Anlagen AG and IMMOFINANZ AG, mainly as a result of the positive effects of the remeasurement of derivatives.
Consolidated net income declined substantially year-on-year to EUR 18.9m as a result of the non-cash property valuation effects (2021: EUR 230.6m). Earnings per share amounted to EUR 0.39. FFO I per share rose year-on-year to EUR 0.92 (2021: EUR 0.86). EPRA-NAV per share amounted to EUR 27.34 (31 December 2021: EUR 29.29).
S IMMO's year on the capital market was largely defined by the takeover bid by CPI Property Group S.A. (CPI) in 2022. The acceptance period for the offer at a price of EUR 23.50 (cum dividend) ran from 15 July 2022 to 12 August 2022, followed by an extension that ended on 18 November 2022. After the end of this period, CPI held 88.37% of the shares in S IMMO AG both directly and indirectly through IMMOFINANZ AG. As of the end of the year, IMMOFINANZ AG announced that it holds a majority interest of 50% plus one share in S IMMO following CPI's share acquisition.
The price of S IMMO's shares was supported by the offer price until the end of CPI's takeover bid and had remained virtually steady at EUR 22.75 for an extended period, but underwent a correction after the end of the extension period. The S IMMO share ended the year at EUR 12.48, indicating a correction of -42.62%.
Outlook for 2023
Against the backdrop of a crisis-ridden market environment that makes forecasts difficult, S IMMO is concentrating on its core business and working intensively to optimise its portfolio and its structures. The focus will remain on disposals in Germany and the acquisition of further profitable and high-quality office properties in Austria and CEE. Holger Schmidtmayr, member of S IMMO's Management Board, comments: "We are currently considering the sale of German properties valued at more than EUR 500m. At the same time, we signed a declaration of intent for the acquisition of several properties on the Wienerberg in Vienna and sounding out acquisition options in the Czech Republic. These purchases will have a further positive effect on our operating figures and shore up S IMMO's profitability in the interests of all our shareholders."
Consolidated income statement for the period 01 January 2022–31 December 2022
in EUR million / fair value method
|thereof rental income||155,7||131,3|
|thereof revenues from operating costs||48,4||34,4|
|thereof revenues from hotel operations||56,4||31,2|
|Other operating income||2,2||3,2|
|Property operating expenses||-79,6||-66,8|
|Hotel operating expenses||-43,0||-23,7|
|Income from property disposals||49,2||39,6|
|Book value of property disposals||-49,2||-39,6|
|Result from property disposals||0||0|
|Earnings before interest, tax, depreciation and amortisation (EBITDA)||106,1||81,3|
|Depreciation and amortisation||-9,7||-9,6|
|Results from property valuation||-78,4||198,7|
|Operating income (EBIT)||18,0||270,3|
|Results from companies measured at equity||0,3||6,2|
|Earnings before taxes (EBT)||34,8||271,0|
|Taxes on income||-15,9||-40,5|
|Consolidated net income||18,9||230,6|
|thereof attributable to shareholders in parent company||27,2||229,5|
|thereof attributable to non-controlling interests||-8,3||1,0|
|Earnings per share (in EUR)||0,39||3,24|