S IMMO AG: Positive annual trend continues
- Cash result (FFO I) improved by 17.6%
- Operating result (EBITDA) up by 3.8%
- EPRA NAV increases to EUR 16.06
- S IMMO share posts price gain of around 50%
The first three quarters of the 2017 financial year were extremely successful for S IMMO: major drivers in this outcome were gains from property valuation, which amounted to EUR 68.2m as of 30 September 2017, and were mainly attributable to property increases in Germany, Austria and Bulgaria. FFO I for the first three quarters of 2017 came to EUR 36.8m and was thus up 17.6% year-on-year. Ernst Vejdovszky, CEO of S IMMO AG, comments: “Timing is everything in the real estate business. For both the two office buildings in Vienna’s Viertel Zwei and the Serdika Center in Sofia, we saw clear indications that it was the right time to sell. You seldomly reach the absolute peak, but making profits is a key element of our business and creates sustainable value for our shareholders.”
Strong operating performance again
S IMMO’s total income for the first nine months of 2017 amounted to EUR 144.2m (Q3 2016: EUR 147.1m), roughly on a par with the previous year. The rental income included in this figure amounted to EUR 86.0m (Q3 2016: EUR 88.5m) and reflected the sales compared with the previous year.
Property management expenses amounted to EUR 47.2m (Q3 2016: EUR 48.9m) in the first three quarters of 2017. Gross profit came to EUR 74.2m (Q3 2016: EUR 77.6m).
Successful property transactions
In the third quarter of 2017, S IMMO sold the office buildings “Hoch Zwei” and “Plus Zwei” in Vienna and the Serdika Center shopping centre along with its associated office property in Sofia. The profit on disposals stems largely from the sale of the Serdika property. Now that this property has been sold, S IMMO no longer owns any leased properties in Bulgaria.
At the same time, S IMMO was also active in terms of acquisitions in the first three quarters of 2017. German properties representing a transaction volume of around EUR 61m were added to the S IMMO portfolio in the reporting period. In addition, the equity investments in CA Immo and Immofinanz were continued.
EBITDA and EBIT
In the first three quarters of 2017, EBITDA amounted to EUR 71.3m (Q3 2016: EUR 68.7m). Revaluation gains developed very positively, amounting to EUR 68.2m (Q3 2016: EUR 107.6m) as of 30 September 2017. This development was mainly driven by the German market, although Austria and CEE also made a substantial contribution to the revaluation gains.
EBIT amounted to EUR 133.0m as of 30 September 2017 (30 September 2016: EUR 170.5m). The successful sale of the Serdika property also contributed to this development, to the extent that overall the company generated the second-best EBIT in its history.
Development of EBT, net profit for the period and earnings per share
The financing result including participating certificates improved to EUR -39.7m as of 30 September 2017 (Q3 2016: EUR -52.1m).
As of 30 September 2017, EBT amounted to EUR 93.3m (Q3 2016: EUR 118.4m). The successful sales led to an increase of tax expenses. As a result, net income for the period totalled EUR 77.0m (Q3 2016: EUR 119.8m). Earnings per share for the first three quarters came to EUR 1.12 (Q3 2016: EUR 1.78 per share).
Equity and LTV ratio
In the first three quarters of 2017, equity without minorities rose to EUR 880.1m (31 December 2016: EUR 795.6m). As a result, the equity ratio improved to 39.8% (31 December 2016: 36.2%) and the book value per share increased to EUR 13.29 as of 30 September 2017 (31 December 2016: EUR 12.02). A key performance indicator for assessing the financing structure is the loan-to-value ratio (LTV ratio), which improved to 49.2% as of 30 September 2017 (31 December 2016: 55.9%).
S IMMO share in the ATX
The S IMMO share also achieved an extremely positive performance again. Since the beginning of the year, it has posted price gains of around 50%. In addition, the S IMMO share has been included in the ATX, the benchmark index on the Vienna Stock Exchange, since September 2017. The share is currently trading between EUR 14.00 and EUR 15.00, while EPRA NAV amounted to EUR 16.06 as at 30 September 2017. Considering the dividend of EUR 0.40 per share, this represents an increase of 12.6% since the beginning of the year. Thus, there is further potential for increases in the share price performance in the future.
Outlook for 2018
Friedrich Wachernig, member of S IMMO AG’s Management Board, is also most confident for the next financial year: “We are not resting on our laurels, but instead are actively preparing for future success. This firstly includes our project pipeline with a total investment volume currently amounting to more than EUR 600m. At the same time, we are also active as a buyer and invest in German cities, where we see significant potential. These projects and acquisitions will secure us sustainable income in the coming years.”
Consolidated income statement for the period from 01 January 2017 to 30 September 2017
in EUR million/fair-value method
|thereof rental income||86.0||88.5|
|thereof revenues from operating costs||25.4||28.3|
|thereof revenues from hotel operations||32.8||30.2|
|Other operating income||1.4||2.1|
|Expenses directly attributable to properties||-47.2||-48.9|
|Hotel operating expenses||-24.2||-22.7|
|Income from property disposals||461.3||192.9|
|Book value of property disposals||-450.9||-188.5|
|Gains on property disposals||10.3||4.4|
|Earnings before interest, tax, depreciation and amortisation (EBITDA)||71.3||68.7|
|Depreciation and amortisation||-6.6||-5.9|
|Results from property valuation||68.2||107.6|
|Operating result (EBIT)||133.0||170.5|
|Results from companies measured at equity||0.4||0.5|
|Participating certificates result||-3.5||-3.9|
|Net income before tax (EBT)||93.3||118.4|
|Taxes on income||-16.2||1.4|
|Consolidated net income for the period||77.0||119.8|
|of which attributable to shareholders in parent company||73.8||118.6|
|of which attributable to non-controlling interests||3.2||1.2|
|Earnings per share (in EUR)||1.12||1.78|