S IMMO AG remains on course for record-setting year
- Substantial value increases, particularly in Germany
- Revaluation gains realised through sales
- Further investments planned in Germany
- Profit for the period increases to EUR 119.8m
The 2016 financial year is set to be another record year for S IMMO. As at the end of the third quarter, the positive trend of the preceding quarters has been reaffirmed and can be attributed to various factors. With the sale of around one third of its German residential portfolio, the company realised the valuation gains of the past years. Success was also achieved in the company’s operating business. Ernst Vejdovszky, CEO of S IMMO AG, had the following comment: “Taking advantage of peaks on our markets and taking profits is a key element of our cycle-oriented strategy. At the same time, we are making purchases on the markets in which we see upside potential.”
Development of earnings
The first three quarters of the financial year 2016 were extremely successful for S IMMO. This was largely due to the revaluation gains, which amounted to EUR 107.6m as at 30 September 2016 (Q3 2015: EUR 16.8m). This development was primarily attributable to the dynamic growth on the German real estate market and sales-related revaluation gains. Key indicators such as EBIT, EBT, and net income for the period increased significantly compared with the same period of the previous year. EBIT climbed to EUR 170.5m (Q3 2015: EUR 76.1m), EBT totalled EUR 118.4m (Q3 2015: EUR 34.6m), and net income for the period amounted to EUR 119.8m (Q3 2015: EUR 28.2m).
In the third quarter of 2016, S IMMO sold part of its German property portfolio. The sale comprised a total of around 1,500 residential units in Berlin and the region of Hamburg. In terms of space, the transaction volume accounts for roughly one-third of S IMMO’s German residential portfolio. The closing for the majority of the properties in Berlin already took place in the third quarter. The transactions for one property in Berlin and the remaining properties that are held for sale as at 30 September are expected to close in late 2016/early 2017. In the interim financial statements as at 30 September, the sale described above makes a positive contribution, primarily to revaluation gains and – due to the reversal of deferred taxes – also to the tax result.
Capital market
At the end of the quarter, the S IMMO share was listed at a price of EUR 9.37, having achieved a year-to-date gain of 14.27%. It thus significantly outperformed both the ATX and the IATX once again. The average target price of the analysis firms that assess the S IMMO share was EUR 10.17 as at 30 September 2016. In the reporting period, the share also posted increased trading volumes as well as growing investor interest from countries such as Switzerland and Hungary.
At the end of September, the Management Board approved the launch of an additional share repurchase programme. The volume is up to 669,171 shares, equivalent to 1% of the current share capital. Prior to the launch of the programme, the company held 190,003 treasury shares, equivalent to around 0.28% of the current share capital. The approved programme started on 04 October 2016 and will run until 09 December 2016.
Outlook
The sale of parts of the German residential portfolio does not change the fact that Germany will remain the focus of S IMMO AG’s investment activities. Over the past three quarters, eight properties with total space of more than 45,000 m² were added to the German portfolio, and additional purchases are planned in the coming months. In addition, the company is working intensively to prepare for exciting development projects in Berlin.
S IMMO is also active in Vienna. Along with the Quartier Belvedere Central development next to the new Vienna Central Station, another project in the fifth district of Vienna is ready to go. In Bucharest, the conversion of the Sun Plaza shopping centre is going according to plan and the construction of the office property The Mark started in the summer.
According to Friedrich Wachernig, member of S IMMO AG’s Management Board, “We can look back at several successful months and are very confident that we will close 2016 with another record result. At this point, we are not resting on our laurels, but are instead working hard to create additional value for our shareholders in the coming years.
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Consolidated income statement for the period 01 January 2016–30 September 2016
in EUR m / fair value method
| 01–09/2016 | 01–09/2015 | |
|---|---|---|
| Revenues | 147.1 | 141.6 |
| thereof rental income | 88.5 | 83.2 |
| thereof revenues from operating costs | 28.3 | 25.4 |
| thereof revenues from hotel operations | 30.2 | 33.0 |
| Other operating income | 2.1 | 2.3 |
| Expenses directly attributable to properties | -48.9 | -42.6 |
| Hotel operating expenses | -22.7 | -23.9 |
| Gross profit | 77.6 | 77.4 |
| Income from property disposals | 192.9 | 15.9 |
| Book value of property disposals | -188.5 | -15.9 |
| Gains on property disposals | 4.4 | 0 |
| Management expenses | -13.2 | -12.2 |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | 68.7 | 65.2 |
| Depreciation and amortisation | -5.9 | -5.8 |
| Results from property valuation | 107.6 | 16.8 |
| Operating result (EBIT) | 170.5 | 76.1 |
| Financing costs | -50.9 | -41.1 |
| Financing income | 2.2 | 0.9 |
| Results from companies measured at equity | 0.5 | 0.8 |
| Participating certificates result | -3.9 | -2.2 |
| Net income before tax (EBT) | 118.4 | 34.6 |
| Taxes on income | 1.4 | -6.4 |
| Consolidated net income for the period | 119.8 | 28.2 |
| of which attributable to shareholders in parent company | 118.6 | 26.5 |
| of which attributable to non-controlling interests | 1.2 | 1.6 |
| Earnings per share (in EUR) | 1.78 | 0.40 |
Due to automatic data processing, this press release may contain apparent mathematical errors in the rounding of figures.
