Sparkassen Immobilien AG Financial year 2009 – a year of contrasts
- First ever post-tax full-year loss following market-related property revaluations
- Increase in revenues less directly attributable expenses to EUR 70.9m
- Occupancy rate steady at 90.3%
- Conversion of participating certificates into shares planned
- Outlook: strong Q1, cash from operations set to double starting in 2011
For stock exchange listed Sparkassen Immobilien AG (Bloomberg: SPI:AV, Reuters: SIAG.VI), the financial year 2009 was a successful year operationally. However, for the first time in the Group’s 22-year history the final results for the year were negative, as a result of the effects of the financial crisis and non-cash property revaluations.
“For Sparkassen Immobilien AG the financial year 2009 was a year of contrasts,” commented Holger Schmidtmayr, member of Sparkassen Immobilien AG’s Management Board, at the annual results press conference for 2009. While for 2009 the effects on post-tax results of the financial crisis and non-cash revaluations were significantly negative, our consistent, long-term business strategy produced satisfactory operating results. Major operating indicators such as rental income, occupancy rate and cash flow were maintained at their existing level or even improved. Starting in the financial year 2011, we will more than double our operating cash flow, as our development projects are completed,” stresses Schmidtmayr.
Operating results: rental income up, occupancy rate stable at high level
The highly satisfactory operating results were primarily attributable to persisting high occupancy levels. Despite the difficult market environment, Sparkassen Immobilien AG has been successful in holding its occupancy rate constant, at 90.3%. The rental yield was 6.65%. In the last financial year rental income rose by 2% and property assets increased to EUR 1.901bn (2008: EUR 1,808bn). As at 31 December 2009, Sparkassen Immobilien AG’s property portfolio comprised 256 properties with total lettable space of 1,355,000 m².
The revenues less directly attributable expenses increased to EUR 70.9m, after EUR 70.5m in 2008. Cash flow from operations of EUR 49.4m was approximately at the same level as last year (EUR 50.0m). The completed development projects will be making their full contribution to profits starting in the financial years 2010/2011. One-time increases in expenses in connection with the successful completion of our projects resulted in a fall in Funds From Operations (FFO) to EUR 22.0m.
Taking advantage of favourable sales opportunities
During 2009 six rental properties were disposed of at a profit. This included the Gemini office building in Prague, which was sold to Deka Immobilien GmbH for a price far in excess of the land acquisition costs and construction costs. “This transaction, with a value of around EUR 110m, was not only the biggest sale in the history of Sparkassen Immobilien AG, but also one of our most successful development projects to date,” explained Ernst Vejdovszky.
Increased transparency with EPRA standards
The financial statements for 2009 have been prepared in accordance with the standards of the European Public Real Estate Association (EPRA). The changes in presentation affect the income statement and the method of calculating NAV. Management Board member Ernst Vejdovszky: “This change as a result of the increased transparency makes us even more attractive to institutional investors, and easier to compare with other property companies.”
EBITDA fell from EUR 59.2m to EUR 53.3m. The good operating results were outweighed by non-cash property revaluations of EUR 97.2m, resulting in a negative EBIT of EUR 53.1m (2008: positive EBIT of EUR 23.8m).
Sparkassen Immobilien AG’s cash reserves as at 31 December 2009 stood at EUR 210m.
All development projects on schedule
In spite of the extremely difficult market environment, in 2009 we were able to continue all our development projects – the shopping centres and office buildings Serdika Center in Sofia and Sun Plaza in Bucharest – as planned,” emphasised Friedrich Wachernig, Sparkassen Immobilien AG Management Board member, in the press conference. Two other projects – the fully let student residence and geriatric centre in Sechshauser Strasse in Vienna and the Austria Trend Hotel in Bratislava – were successfully completed in 2009 and officially opened. “Given the challenging economic situation, we are particularly proud of this achievement. Very few businesses in 2009 had the financial strength to continue with projects of this size without additional project funding, and then to bring them to a successful conclusion,” said Wachernig.
The two biggest projects in the history of the Group to date, the shopping centres Serdika Center in Sofia and Sun Plaza in Bucharest, are almost fully let. The biggest shopping centres in their respective countries, they were successfully opened in the first quarter of 2010. “These two new jewels in the portfolio shine especially brightly,” said Wachernig about the significance of the two shopping centres.
s IMMO Share: year-to-date gain of 152.5%
Sparkassen Immobilien AG’s share performed outstandingly in 2009, closing the year at EUR 5.00 (closing price 27 April 2010: EUR 5.10), a year-on-year increase of 152.5%. Erste Group and Vienna Insurance Group, two of the region’s largest established financial service providers, continue to be Sparkassen Immobilien AG’s strategic core shareholders.
Consolidated income statement for the year ended 31 December 2009 EUR m / fair value basis
|Rental income|| |
|Revenues from service charges|| |
|Revenues from hotel operations|| |
|Other operating income|| |
|Property management expenses|| |
|Hotel operating expenses|| |
|Revenues less directly attributable |
|Income from property disposals|| |
|Carrying values of property disposals|| |
|Gains on property disposals|| |
|Management expenses|| |
|Profit before interest, tax, property valuation |
adjustments, and depreciation and amortisation
|Depreciation and amortisation|| |
|Losses on property valuations|| |
|Operating profit (EBIT)|| |
|Finance costs|| |
|Participating certificates results|| |
|Profit before taxes (EBT)|| |
|Taxes on income|| |
|Profit on taxes|| |
| of which attributable to shareholders in parent |
|of which attributable to minority interests|| |
|Earnings per share (EUR)|| |
|Property indicators|| |
31 December 2009
|Completed properties|| |
|Total usable space|| |
|Rental yield|| |
|Occupancy rate|| |
|Land bank|| |