S IMMO AG: Successful start to 2015
Net income for the period up to EUR 8.1m
- EBT increases to EUR 9.6m
- Book value and EPRA NAV per share improved again
- Capital market measures open up additional strategic possibilities
- EUR 180m investment volume for the current year
Following the publication of the successful annual results for 2014 a couple of weeks ago, stock exchange listed real estate company S IMMO AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) is now continuing the positive trend in the first quarter of 2015. Ernst Vejdovszky, CEO of S IMMO AG, comments: “We got off to a successful and energetic start this year – the signs are clearly pointing to growth.”
Development of earnings
During the first three months of 2015, S IMMO AG’s total revenues amounted to EUR 44.3m (Q1 2014: EUR 44.8m), roughly equal to the prior-year figure. The rental income included in this figure was impacted by property sales as expected and came to EUR 27.2m (Q1 2014: EUR 28.2m). Gross operating profit from hotel operations totalled EUR 1.2m (Q1 2014: EUR 1.2m). In the first quarter of 2015, expenses directly attributable to properties came in at EUR 14.1m (Q1 2014: EUR 12.9m). The gross operating profit was EUR 23.3m (Q1 2014: EUR 25.6m).
EBITDA amounted to EUR 19.7m in the first quarter of 2015 (Q1 2014: EUR 22.4m). The decline was caused by the lower rental income resulting from the sale of properties as well as increased costs due to timing effects. As a result, EBIT came to EUR 18.6m (Q1 2014: EUR 26.5m).
The financing result including the participating certificate result totalled EUR -9.0m as at 31 March 2015 (Q1 2014: EUR -17.8m). The significant improvement was due to positive currency translation and derivative valuation effects. This pushed EBT up to EUR 9.6m, which is 10.3% higher than the prior-year figure (Q1 2014: EUR 8.7m). The profit for the period edged up by 20.9% to EUR 8.1m (Q1 2014: EUR 6.7m).
In the first quarter of 2015, both NAV (book value of equity) and EPRA NAV per share increased compared with the first quarter of 2014, NAV per share improving to EUR 8.41 as at 31 March 2015 (31 December 2014: EUR 8.31) and EPRA NAV advancing to EUR 10.71 (31 December 2014: EUR 10.63) per share.
Financing and loan-to-value (LTV)
In order to better illustrate its financing structure, S IMMO reports two LTV ratios. S IMMO’s on-balance-sheet property assets amounted to EUR 1,759.9m as at 31 March 2015 (31 December 2014: EUR 1,764.4m). The LTV ratio for mortgage-secured financing improved to 46.4% during the reporting period (31 December 2014: 48.0%). S IMMO also has unsecured financing. The LTV ratio for unsecured financing minus cash and cash equivalents came to 13.4% in the reporting period (31 December 2014: 12.0%). As a result, the company’s total LTV ratio is 59.8% (31 December 2014: 60.0%).
The S IMMO share significantly outperformed the ATX and the IATX, with a year-to-date performance of 36.95% as at 31 March 2015. The closing price at the end of the quarter was EUR 8.45. Although the share has undergone a slight correction in recent weeks, it remains at an encouragingly high level. Due to the exchange offer for S IMMO INVEST participating certificates from March 2015, the outstanding participating certificate capital was reduced by another EUR 40m to roughly EUR 56m. In mid-April, the company successfully placed a 12-year-bond with a volume of EUR 65m, thus ensuring additional room for strategic opportunities.
Outlook for 2015: investments and a further increase in consolidated net income
The goal of S IMMO’s management for the current financial year is to once again improve the company’s consolidated net income. The company aims to grow its property portfolio by around EUR 700m to EUR 2.4bn in the medium-term. An investment volume of EUR 180m is planned for 2015. Roughly two thirds of this is earmarked for acquisitions in Germany with a focus on commercial properties in Berlin and large cities in the surrounding area. With this in mind, S IMMO launched a purchasing offensive at the start of the year and acquired commercial properties with a useable area of roughly 35,000 m² and a land area of over 90,000 m² in the first quarter. S IMMO is evaluating attractive opportunities in its home market of Vienna on an ongoing basis and also purchased a property here during the first quarter. Purchases and development projects are also planned in Central and Southeastern Europe, where the recovery of the real estate markets continues.
Friedrich Wachernig, Member of the Management Board, comments: “Our robust business model puts us in an excellent position for the coming years: 100% European Union, a focus on capital cities, and emphasis on commercially used properties and high-potential residential properties. We once again had a strong start and are looking ahead to the following months of the 2015 financial year with a tremendous sense of optimism.”
Consolidated income statement in EUR m/ fair value method
|01 – 03/2015||01 – 03/2014|
|Revenues from operating costs||8.5||8.7|
|Revenues from hotel operations||8.7||7.9|
|Other operating income||0.5||0.4|
|Expenses directly attributable to properties||-14.1||-12.9|
|Hotel operating expenses||-7.4||-6.7|
|Income from property disposals||6.7||21.6|
|Book value of property disposals||-6.7||-21.6|
|Gains on property disposals||0||0|
|Depreciation and amortisation||-1.9||-1.9|
|Gains on property valuation||0.8||5.9|
|Operating profit (EBIT)||18.6||26.5|
|Results from companies measured at equity||0.8||0|
|Participating certificates results||-1.0||-2.7|
|Net income before tax (EBT)||9.6||8.7|
|Taxes on income||-1.5||-2.0|
|Consolidated net income for the period||8.1||6.7|
|of which attributable to shareholders in parent company||7.5||6.7|
|of which attributable to non-controlling interests||0.6||1.0|
|Earnings per share (EUR)||0.11||0.08|