S IMMO AG has very strong half-year: net income for the period back at pre-COVID level
- Rental income improved by over 5% to EUR 63.9m
- Result from property valuation: EUR 131.5m
- EBIT up significantly to EUR 166.3m
- EPRA NAV per share at EUR 27.51 as of 30 June 2021
The listed real estate investment company S IMMO AG ended the first half of 2021 on a very positive note with a net income for the period of EUR 137.3m (HY 2020 EUR 16.1m). Bruno Ettenauer, CEO of S IMMO AG, commented: “The current half-year results provide impressive confirmation of S IMMO’s growth potential. Despite the continuing challenges of the pandemic, we were able to generate a strong operating result and marked value increases in the existing portfolio. The highly successful sale of the CA Immo shares in July also represents an important step towards increasing cash flow on a long-term basis.”
Increase in revenues and gross profit
In the first half of the year, total revenues increased year-on-year from EUR 87.8m to EUR 91.1m. This improvement can be attributed to acquisitions and to careful operational management of the existing portfolio. While rental income improved from EUR 60.6m to EUR 63.9m, the hotel GOP improved to EUR 2.2m (HY 2020: EUR 0.1m). In total, gross profit improved from EUR 45.7m to EUR 53.2m.
According to Friedrich Wachernig, Member of S IMMO AG’s Management Board, “The past few months have generally shown that the portfolio of S IMMO, which is diversified by region and type of use, has proved its resilience in times of crisis. Particularly the operational efforts and the intensive work on our properties and with our tenants are having a decisive positive impact. The high quality of our existing properties is a key success factor.”
Increase in EBITDA, significant positive valuation result
Management expenses in the first half of the year included a range of non-recurring effects, among other things the expenses in connection with the unsuccessful takeover offer by IMMOFINANZ AG, and amounted to EUR 13.6m (HY 2020: EUR 9.6m). Despite these effects, EBITDA rose by roughly 9.6% to EUR 39.6m (HY 2020: EUR 36.1m).
The result from property valuation returned to the level seen in 2019, coming in at a very satisfying amount of EUR 131.5m (HY 2020: EUR 10.2m). Around 72% of the value increases were attributable to the German portfolio, around 22% to Austrian properties and roughly 6% to the CEE segment. Consequently, EBIT also increased significantly to EUR 166.3m (HY 2020: EUR 41.8m).
Significant increase in net income for the period and earnings per share
The financial result also improved considerably year-on-year to EUR -2.2m as at 30 June 2021 (HY 2020: EUR -21.8m). This substantial increase is mainly attributable to dividend income for the investment in the CA Immobilien Anlagen AG shares, which was not paid until the second half of the year in 2020, as well as to significantly improved derivative valuations, positive exchange rate effects and higher results from shares measured according to the equity method. Tax expenses mainly reflect the increase in deferred taxes in connection with the positive property valuation. Overall, net income for the period increased more than eightfold year-on-year to EUR 137.3m (HY 2020: EUR 16.1m). Earnings per share rose to EUR 1.93 (HY 2020: EUR 0.22).
The S IMMO share turned in a year-to-date performance of 19.1% in the first half of the year. The analyst firms’ average price target is EUR 24.08 as of 23 August 2021.
Outlook for 2021
In July 2021, S IMMO AG submitted its shares in CA Immobilien Anlagen AG to Starwood Capital Group’s takeover offer and thus sold them at a price of EUR 37 per share. The sale generated a cash inflow of roughly EUR 230m (before taxes) and a disposal gain of almost EUR 100m throughout the investment period. These funds are now to be used for direct property investments. Herwig Teufelsdorfer, Member of S IMMO AG’s Management Board, noted: “We are currently examining acquisition options very intensively – particularly in Budapest and Bucharest, there are a number of exciting investment opportunities for which we are holding specific discussions. The goal is to acquire properties that will immediately generate cash flow and make a valuable contribution to earnings. This will ensure our company’s ability to pay dividends and form the basis for further growth.”
Consolidated income statement for the period 01 January 2021–30 June 2021
in EUR millions / fair value method
|thereof rental income||63.9||60.6|
|thereof revenues from operating costs||17.1||16.0|
|thereof revenues from hotel operations||10.2||11.2|
|Other operating income||2.0||1.1|
|Property operating expenses||-31.9||-32.1|
|Hotel operating expenses||-8.0||-11.1|
|Income from property disposals||0||40.6|
|Book value of property disposals||0||-40.6|
|Result from property disposals||0||0|
|Depreciation and amortisation||-4.7||-4.5|
|Results from property valuation||131.5||10.2|
|Operating result (EBIT)||166.3||41.8|
|Earnings before taxes (EBT)||164.1||20.0|
|Taxes on income||-26.8||-3.9|
|Consolidated net income for the period||137.3||16.1|
|thereof attributable to shareholders in parent company||136.7||15.9|
|thereof attributable to non-controlling interests||0.6||0.2|
|Earnings per share (in EUR)||1.93||0.22|