S IMMO AG publishes Q3 results
“The third quarter shows a strong and operationally extremely successful result for S IMMO,” comments Herwig Teufelsdorfer, Member of the Management Board. “We succeeded in significantly raising rental income, and gross profit is considerably above the prior year’s level. Our strategy of withdrawing from the German residential property market and increasingly investing in higher-yielding properties has an extremely positive impact on our earning power.”
Operational highlights:
- Like-for-like rent increased by 4.21%.
- Result from hotel operations increased by 63% to EUR 13.5m, reflecting the ongoing strong rebound in travel activity.
- Since the start of the sales programme in autumn 2022, sales contracts had been signed for a total of 170 German properties with a total volume of EUR 621m (as of 30 September 2023). Disposal plans for other properties with a total value of over EUR 335m are being reviewed on an ongoing basis.
- Q3 saw the successful acquisition of Vienna Twin Towers with a rental income of more than EUR 12m per year.
Financial highlights:
- EPRA NRV per share amounted to EUR 28.35.
- Rental income increased to EUR 142.8m.
- Total revenues increased to EUR 242.5m.
- Gross profit of EUR 130.1m
- EBITDA was EUR 105.7m, up by more than 38% compared to the previous year
- FFO I at EUR 75.0m
- At the beginning of the third quarter, S IMMO successfully issued another green bond with a volume of EUR 75m, a term of 5 years and a coupon of 5.5%.
“S IMMO’s operational performance was outstanding, while market-related property revaluations of EUR -88.2m led to a net result for the period of EUR -19.6m,” says Radka Doehring, Member of the Management Board. “We strongly believe in our current strategy with the acquisitions executed in recent quarters already making a decisive contribution to earnings.”
Post-Q3 events and updates
With the share price being significantly below the IFRS NAV, S IMMO also decided to launch a share buyback programme at the beginning of October. The volume totals up to 736,088 shares (that equals roughly 1% of the current share capital), the purchase price must not exceed EUR 15.00.
At the end of October, S IMMO acquired further office properties at Wienerberg in Vienna with a gross lettable area of around 81,000 m² and annual rental income of EUR 8.4m and disposed of Adlerhof in Vienna being Austria’s largest apartment building transaction to date in 2023.
At the end of November, S IMMO AG acquired a portfolio totalling 11 properties from Czech Property Investments, a.s. ("CPI AS"), a subsidiary of CPI Property Group S.A., in the Czech Republic. The purchase comprises seven office properties, three commercial properties and a plot of land with a total lettable area of around 138,000 m², a property value of around EUR 481m and an annual rental income of around EUR 29m.
The result in detail
Total assets
As of 30 September 2023, S IMMO Group’s total assets amounted to EUR 3,824.0m (31 December 2022: EUR 3,774.4m). Despite the sales made primarily in Germany, the total assets increased due to acquisitions in CEE and Austria on the one hand and a significantly higher amount of cash and cash equivalents on the other. As of 30 September 2023, cash and cash equivalents amounted to EUR 596.7m (31 December 2022: EUR 246.9m)
Equity and EPRA NRV
Equity not including non-controlling interests decreased slightly to EUR 1,684.8m (31 December 2022: EUR 1,697.2m). The book value per share amounted to EUR 23.89 as of 30 September 2023 (31 December 2022: EUR 24.07). The equity ratio reached 46.0% at the end of the third quarter (31 December 2022: 47.2%). EPRA NRV per share amounted to EUR 28.35.
Total revenues
In the first three quarters of 2023, total revenues increased significantly from EUR 185.1m in the same period of the previous year to EUR 242.5m. This increase is mainly due to acquisitions of leased properties in CEE. Rental income amounted to EUR 142.8m (Q3 2022: EUR 112.7m). Revenues from operating costs also increased to EUR 49.9m (Q3 2022: EUR 34.0m) due to acquisitions and current inflation trends.
Property operating expenses
Property expenses were as well influenced by transactions and inflationary environment, increasing from EUR 56.4m to EUR 78.0m, mainly as a result of higher expenses for operating costs.
Result from hotel operations
The result from hotel operations rose to EUR 13.5m (Q3 2022: EUR 8.3m) due to significantly higher revenues from hotel operations, which amounted to EUR 49.8m in the first three quarters of 2023 (Q3 2022: EUR 38.3m). This represents an increase of 63%.
Administrative expenses
Administrative expenses for the first three quarters of 2023 amounted to EUR 24.5m (Q3 2022: EUR 23.3m).
Property valuation
The property valuation result was negative at EUR -88.2m (Q3 2022: EUR 27.3m), mainly due to the current difficult economic conditions.
Financial result and tax expenses
The financial result declined year on year from EUR 15.5m to EUR -25.1m, mainly due to non-cash remeasurement effects. Tax expenses decreased from EUR -12.8m to EUR -4.9m.
Consolidated income statement for the period
01 January 2023 - 30 September 2023
in EUR m / fair value method
| 01-09/2023 | 01-09/2022 | |
| Revenues | 242.5 | 185.1 |
| thereof rental income | 142,8 | 112,7 |
| thereof revenues from operating costs | 49,9 | 34,0 |
| thereof revenues from hotel operations | 49,8 | 38,3 |
| Other operating income | 2,0 | 1,1 |
| Property operating expenses | -78,0 | -56,4 |
| Hotel operating expenses | -36,4 | -30,0 |
| Gross profit | 130,1 | 99,7 |
| Income from property disposals | 584,2 | 0,0 |
| Book value of disposed properties | -584,2 | 0,0 |
| Result from property disposals | 0,0 | 0,0 |
| Management expenses | -24,5 | -23,3 |
| EBITDA | 105,7 | 76,4 |
| Depreciation and amortisation | -7,0 | -7,3 |
| Results from property valuation | -88,2 | 27,3 |
| Operating result (EBIT) | 10,4 | 96,4 |
| Financial result | -25,1 | 15,5 |
| Earnings before tax (EBT) | -14,7 | 111,9 |
| Taxes on income | -4,9 | -12,8 |
| Consolidated net result for the period | -19,6 | 99,1 |
| thereof attributable to shareholders in the parent company | -13,0 | 98,9 |
| thereof attributable to non-controlling interests | -6,6 | 0,1 |
| Earnings per share (in EUR) | -0,2 | 1,4 |
