S IMMO AG: successful half-year results for 2013
Increased efficiency – administrative and property-related cost reductions
- Gross profit increased to EUR 55.1m
- Funds from operations up by 14.1%
- Net income for the period up again to EUR 16.0m
- Property sales target already largely achieved
For stock exchange listed S IMMO AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) the results for the first half of 2013 once again proved the success of its activities. Major performance indicators were up again. Ernst Vejdovszky, Chairman of S IMMO AG’s Management Board, comments: “The half year results we are currently reporting on confirm: S IMMO is number one in efficiency. Our excellent results are in line with our targets for the current financial year.”
Gross profit up again
Total income for the first half of 2013 was EUR 97.0m compared with EUR 98.6m in the same period last year. As expected, the rental income of EUR 59.0m was lower than in the first half of 2012 (EUR 60.6m), because of the property sales. The property portfolio was reduced by 5.6%, however rental income fell by only 2.7%. Revenues for the half year from hotel operations increased by 2.9% to EUR 19.2m (first half of 2012: EUR 18.6m). As a result, the gross profit from hotel operations improved by 14.4% to EUR 3.8m compared with EUR 3.3m a year ago. This and the reduced property-related expenses more than compensated for the lower rental income. Gross profit rose to EUR 55.1m, a 3.6% improvement on the EUR 53.2m achieved in the first half of 2012.
Successful property sales
S IMMO’s plan for 2013 is to sell around 5% of its property portfolio. As at 30 June 2013, this target was already largely achieved. In the first half year, one apartment, three residential properties and one retail property in Austria and Germany were sold. Total sale proceeds for the period came to EUR 83.8m compared with EUR 97.4m in the first half of 2012. Gains on disposals came to EUR 2.4m, as against EUR 5.8m in the same period last year. Compared with the estimated values as at 30 September 2012, the gains on disposal were EUR 7.4m.
Number one in efficiency
In addition to reduced property-related expenses, administrative expenses were also once again cut back: for the first half of 2013 they came to EUR 7.6m, compared with EUR 8.1m in the same period last year. EBITDA was EUR 49.9m (first half of 2012: EUR 50.9m), and EBIT came out at EUR 48.0m (first half of 2012: EUR 51.0m). EBT increased to EUR 17.6m, compared with EUR 15.9m for the same period last year, and the EBT margin was a very satisfactory 18.2%. As a result of the successful property sales, the resulting reduction in borrowing and lower interest rates compared to the first half of 2012, the financial result for the first half of 2013 improved by 14.7%, from EUR -28.6m in the first half of 2012 to EUR -24.4m. Overall, net profit for the first half of 2013 rose 6.2% to EUR 16.0m, compared with EUR 15.1m in the same period last year.
Key performance indicators up
The positive earnings performance was also reflected in higher funds from operations (FFO). In the first half of 2013 FFO was up by 14.1%, to EUR 18.5m, compared with EUR 16.2m a year earlier. The cost reductions discussed above also resulted in a further improvement in net operating income (NOI) for the period, which totalled EUR 51.5m, compared with EUR 49.4m for the first six months of 2012. As at 30 June 2013 operating cash flow increased by 6.5% to EUR 49.2m, compared with EUR 46.2m a year earlier. In the first half of 2013 both book value per share (balance sheet NAV) and EPRA NAV rose again: Book value as at 30 June 2013 stood at EUR 7.47 (31 December 2012: EUR 7.17) per share, while EPRA NAV was EUR 9.31 (31 December 2012: EUR 9.18) per share.
Start of further repurchase programmes
The S IMMO Share again performed better than the ATX and IATX, although price movements during the period were predominantly sideways. It closed on 30 June 2013 at EUR 4.729. In the second quarter of 2013 S IMMO started an open-ended repurchase programme for participating certificates. A further repurchase programme for S IMMO Shares was also decided on, authorising the repurchase of a further 3% of the share capital from 09 July 2013 until 18 December 2013 at the latest.
Outlook for 2013 confirmed
S IMMO AG confirms its goal for the financial year 2013 – to build and improve on the already excellent results of 2012. The Group develops and operates properties across four different property use types in capital cities within the European Union. This diversification makes it possible to take advantage of differences in real estate cycles, at present principally in Germany and Austria. A part of the proceeds from property sales is used to take up attractive investment opportunities, particularly in Berlin. Friedrich Wachernig, Member of S IMMO’s Management Board: “In the second half of the year we will again be evaluating potential investment opportunities, mainly in Germany. In Vienna we are focusing on our Quartier Belvedere Central project, which we will be implementing together with partners at Vienna Central Station. Our skills and expertise enable us to unlock neglected potential and operate successfully even in difficult times.”
|01 – 06/2013||01 – 06/2012|
|Revenues from operating costs||18.8||19.4|
|Revenues from hotel operations||19.2||18.6|
|Other operating income||3.5||3.7|
|Expenses directly attributable to properties||-30.1||-33.9|
|Hotel operating expenses||-15.4||-15.3|
|Income from property disposals||83.8||97.4|
|Carrying value of property disposals||-81.4||-91.5|
|Gains on property disposals||2.4||5.8|
|Earnings before interest, tax, depreciation and amortisation (EBITDA)||49.9||50.9|
|Depreciation and amortisation||-4.7||-4.5|
|Results from property valuation||2.8||4.7|
|Operating result (EBIT)||48.0||51.0|
|Participating certificates results||-5.9||-6.5|
|Net income before taxes (EBT)||17.6||15.9|
|Taxes on income||-1.6||-0.8|
|Consolidated net income for the period||16.0||15.1|
|of which attributable to shareholders in parent company||14.5||14.3|
|of which attributable to non-controlling interests||0.22||0.21|
|Earnings per share (EUR)||0.09||0.09|