S IMMO AG: Record half-year results
- Significant value increases, particularly in Germany
- Revaluation gains realised through sales
- Further investments planned in Germany
- Profit for the period increases to EUR 85.5m
The first six months of the 2016 financial year were extremely successful for S IMMO. This was largely due to the revaluation gains, which amounted to EUR 106.9m in the first half of 2016. The dynamic growth on the German real estate market was the primary driver of this development. According to Ernst Vejdovszky, CEO of S IMMO AG, “Berlin’s residential property market has enjoyed highly dynamic development in recent months. We decided to realise a portion of the value increases achieved in our portfolio by selling around 20% of our space in Germany. This is in line with our cycle-oriented strategy and creates value for our investors.
Development of earnings
In the first half of 2016, S IMMO AG’s total revenues amounted to EUR 95.3m (HY 2015: EUR 92.2m), an increase over the prior-year figure. The rental income included in this figure reflects the property purchases completed since the beginning of 2015 and came to EUR 58.5m (HY 2015: EUR 54.6m). Gross operating profit from hotel operations declined to EUR 3.5m (HY 2015: EUR 5.0m) due to the overhaul of the Vienna Marriott Hotel, which resulted in a temporary reduction in room occupancy in the first half of the year.
Property management expenses amounted to EUR 31.2m in the first half of the year (HY 2015: EUR 27.0m). The gross profit was EUR 50.5m (HY 2015: EUR 50.7m). EBITDA came to EUR 43.0m in the first half of 2016 (HY 2015: EUR 43.1m). This slight decrease was due to the temporary decline in the profit from hotel operations. Revaluation gains developed very positively, amounting to EUR 106.9m as at 30 June 2016 (HY 2015: EUR 9.7m). In addition to the continued outstanding development in Germany, both Austria and CEE (Hungarian office properties) contributed to this positive result.
Overall, EBIT was up significantly on the previous year at EUR 145.9m (HY 2015: EUR 48.9m). As a result, EBT amounted to EUR 107.3m (HY 2015: EUR 26.9m). The net profit for the period increased to EUR 85.5m (HY 2015: EUR 20.9m). Earnings per share improved once again and came to EUR 1.27 (HY 2015: EUR 0.30).
Capital market
S IMMO continues to benefit from the current low interest rates. At the end of May, the share price briefly reached EUR 9.00 for the first time since 2007. Despite the turbulent environment on the stock markets, the S IMMO share closed the quarter at EUR 8.40, a gain of 2.44% (ex dividend) compared with the closing price on 31 December 2015.
S IMMO increased the dividend for its shareholders for the fourth time in a row. The payout for the 2015 financial year was 30 cents per share, which equates to a dividend yield of over 3.6% in relation to the closing price on 31 December 2015. This payment was made on 10 June 20
Outlook for 2016
Germany remains an important market for S IMMO. The company bought six properties there at a total price of EUR 9.2m over the first six months of 2016. In addition, purchases amounting to EUR 54.1m for which S IMMO AG will not obtain ownership until after 30 June 2016 were contractually agreed as at the editorial deadline. The company currently sees tremendous potential in office properties in particular. There are also a number of development projects on the agenda: In Bucharest, the development of a promising office property called The Mark is starting. The refurbishment of the Sun Plaza shopping centre is also proceeding according to plan. S IMMO is active on its home market of Vienna as well, including at Quartier Belvedere Central.
According to Friedrich Wachernig, member of S IMMO AG’s Management Board, “We are also extremely optimistic for the second half of the year. We are working intensively on development projects and value-enhancement measures across our portfolio. Several hugely busy quarters lie ahead in which we will extend, develop, and optimise our portfolio.”
Consolidated income statement for the period 01 January 2016–30 June 2016
in EUR millions / fair value method
| 01 – 06/2016 | 01 – 06/2015 | |
|---|---|---|
| Revenues | 95.3 | 92.2 |
| whereof rental income | 58.5 | 54.6 |
| whereof revenues from operating costs | 18.4 | 16.7 |
| whereof revenues from hotel operations | 18.3 | 20.9 |
| Other operating income | 1.3 | 1.4 |
| Expenses directly attributable to properties | -31.2 | -27.0 |
| Hotel operating expenses | -14.9 | -15.9 |
| Gross profit | 50.5 | 50.7 |
| Income from property disposals | 3.9 | 15.9 |
| Book value of property disposals | -3.1 | -15.9 |
| Gains on property disposals | 0.8 | 0 |
| Management expenses | -8.3 | -7.7 |
| EBITDA | 43.0 | 43.1 |
| Depreciation and amortisation | -4.0 | -3.8 |
| Results from property valuation | 106.9 | 9.7 |
| Operating result (EBIT) | 145.9 | 48.9 |
| Financing costs | -36.4 | -22.3 |
| Financing income | 1.1 | 0.7 |
| Results from companies measured at equity | 0 | 1,0 |
| Participating certificates results | -3.3 | -1.4 |
| Net income before tax (EBT) | 107.3 | 26.9 |
| Taxes on income | -21.7 | -6.0 |
| Consolidated net income | 85.5 | 20.9 |
| of which attributable to shareholders in parent company | 84.6 | 19.9 |
| of which attributable to non-controlling interests | 0.9 | 1.0 |
| Earnings per share (EUR) | 1.27 | 0.30 |
