S IMMO AG: Q3 results right on track
Profit for the period increases to EUR 28.2m
- Considerable improvement in financing result
- Investment volume of over EUR 140m in Germany and Austria so far this year
- Goal: doubling FFO
With the results for the third quarter of 2015, stock exchange listed real estate company S IMMO AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) is confirming its positive trend for the current year. Ernst Vejdovszky, CEO of S IMMO AG: “S IMMO is completely on track with its ambitious plans for 2015, and all of our key figures are in line with the targets for the year as a whole. The historically low interest rate level offers particularly favourable conditions for real estate companies. Our markets have recovered well and are stable. Our strategy – capital cities within the European Union with a current focus on Berlin – is proving effective and is very successful.”
In the first nine months of 2015, S IMMO increased its profit for the period by more than 27% to EUR 28.2m. Earnings per share improved accordingly and came to EUR 0.40 – a gain of over 33%. In the second and third quarters of 2015, the company closed out derivatives that had been concluded in the past when interest rates were much higher, and at the same time negotiated new agreements, thus securing the current, historically low interest rate level for the future. The positive effects of these measures on cash flow and FFO will become fully apparent in the 2016 financial year.
Development of earnings
In the reporting period, S IMMO AG’s total revenues amounted to EUR 141.6m (Q3 2014: EUR 140.5m), slightly higher than the prior-year figure. The rental income included in this figure came to EUR 83.2m (Q3 2014: EUR 84.5m) and reflects the property sales completed since the beginning of 2014.
In the first three quarters of 2015, S IMMO sold six properties in Germany and Austria with a total book value of EUR 45.9m (Q3 2014: EUR 48.4m). At the same time, S IMMO bought properties in Germany and Austria at a total purchasing price of EUR 72.6m during the first three quarters. In addition, purchases amounting to EUR 70.5m for which S IMMO AG will not obtain ownership until after 30 September 2015 were contractually agreed. This brings the total investment volume in Germany and Austria to over EUR 140m so far this year.
EBITDA came to EUR 65.2m in the first three quarters of 2015 (Q3 2014: EUR 67.6m). The decline reflects lower rental income as a result of disposals and increased costs that can largely be attributed to non-recurring effects. Revaluation gains developed very positively, amounting to EUR 16.8m as at 30 September 2015 (Q3 2014: EUR 12.8m). This was due to both the asset management activities aimed at raising the value of the properties and the steadily improving sentiment in S IMMO’s markets. The portfolio in Germany made a particularly significant contribution to the increase in revaluation gains.
Overall, EBIT was higher than in the previous year at EUR 76.1m (Q3 2014: EUR 74.9m). EBT came in at EUR 34.6m (Q3 2014: EUR 27.3m), an increase of 26.7% over the previous year. The profit for the period rose by 27.1% to EUR 28.2m (Q3 2014: EUR 22.2m). Earnings per share improved again to EUR 0.40 (Q3 2014: EUR 0.30), corresponding to an increase of 33.3%.
As in the previous quarters, the S IMMO share significantly outperformed the ATX and the IATX during the reporting period. At the end of the quarter, the share price stood at EUR 7.60 – a gain of more than 23% since the beginning of the year. Since 30 September 2015 the share price further increased and currently stands at a level of around EUR 8.00. The company’s clear goal is and remains to position the S IMMO share as a consistently dividend-paying stock.
Both book value per share and EPRA NAV per share increased once again in the first three quarters of 2015, with the book value of equity per share improving to EUR 8.52 as at 30 September 2015 (30 September 2014: EUR 7.97) and EPRA NAV advancing to EUR 10.43 (30 September 2014: EUR 9.89) per share.
Outlook for 2015: Investments and a further increase in consolidated net income
After three highly successful quarters of the 2015 financial year, S IMMO expects a positive performance for the final quarter as well. Accordingly, the company is reaffirming its target of further increasing consolidated net income and other key figures such as cash flow and FFO. The company aims to increase FFO, raising it from EUR 21.3m for the 2014 financial year to over EUR 40m by the end of 2018.
Friedrich Wachernig, Member of the Management Board at S IMMO AG: “The fact that we secured the low interest rate level will have an extremely positive impact on our key figures. But we will also continue to create value with our investment activities. We currently see the greatest potential in Germany, particularly among commercial properties in Berlin offering attractive development opportunities.”
|01 – 09/2015||01 – 09/2014|
|Revenues from operating costs||25.4||25.9|
|Revenues from hotel operations||33.0||30.2|
|Other operating income||2.3||3.5|
|Expenses directly attributable to properties||-42.6||-41.0|
|Hotel operating expenses||-23.9||-23.2|
|Income from property disposals||15.9||48.4|
|Book value of property disposals||-15.9||-48.4|
|Gains on property disposals||0||0|
|Depreciation and amortisation||-5.8||-5.5|
|Gains on property valuation||16.8||12.8|
|Operating profit (EBIT)||76.1||74.9|
|Results from companies measured at equity||0.8||0.4|
|Participating certificates results||-2.2||-4.1|
|Net income before tax (EBT)||34.6||27.3|
|Taxes on income||-6.4||-5.1|
|Consolidated net income for the period||28.2||22.2|
|of which attributable to shareholders in parent company||26.5||20.2|
|of which attributable to non-controlling interests||1.6||2.0|
|Earnings per share (EUR)||0.40||0.30|