S IMMO AG: Positive trend continues in first quarter
- Rental income increases
- Further revaluation gains in Germany
- EPRA NAV at EUR 22.27 per share as of 31 March 2019
- Purchases in Germany and CEE
The listed real estate investment company S IMMO AG continued its positive trend in the first quarter of 2019 and saw further improvements in key figures. Ernst Vejdovszky, CEO at S IMMO AG, had the following comment: “S IMMO is once again on course for substantial growth in the current financial year. We achieved a significant increase in revenues and a further improvement in key operating figures. This demonstrates the effectiveness of our daily work and strengthens our confidence in our sustainable strategy.”
Strong operational performance
Following the transition year of 2018, total revenues saw an increase of 9.9% compared with the same period last year and amounted to EUR 47.8m (Q1 2018: EUR 43.5m). This development can be attributed to an increase in rental income to EUR 28.4m (Q1 2018: EUR 24.6m) and an increase in revenues from hotel operations to EUR 11.1m (Q1 2018: EUR 10.0m). The rental improvement reflects the acquisitions in the Germany segment and the good like-for-like performance. Property management expenses increased to EUR 15.7m (Q1 2018: EUR 14.4m). Overall, gross profit improved to EUR 24.0m (Q1 2018: EUR 21.6m), which corresponds to an increase of 11.1%.
Increase in EBITDA by 13.1% and rise in the results from property valuation
At EUR 4.5m (Q1 2018: EUR 4.3m), management expenses were in line with the prior-year level, which meant EBITDA improved by 13.1% year-on-year and amounted to EUR 19.5m (Q1 2018: EUR 17.3m). In the first quarter of 2019, the results from property valuation amounted to EUR 9.9m (Q1 2018: EUR 9.4m) and were primarily attributable to revaluations in the Germany segment. Combined with the higher EBITDA, this resulted in an increase in EBIT to EUR 27.4m (Q1 2018: EUR 24.9m).
Development of net income for the period
The financial results were primarily characterised by higher non-cash expenses from derivatives in the amount of EUR 4.6m and totalled EUR -9.7m (Q1 2018: EUR -6.7m). Nevertheless, EBT was maintained at nearly the prior-year level thanks to the solid operational performance and came to EUR 17.7m (Q1 2018: EUR 18.1m). Net income for the period increased to EUR 15.1m (Q1 2018: EUR 14.7m). As a further consequence, earnings per share increased to EUR 0.23 (Q1 2018: EUR 0.22) and were thus higher than last year.
Capital market and key figures
In the first quarter of 2019, the international capital markets showed a clear upward trend. In this environment, the S IMMO share also displayed an impressive performance of more than 25% and thus outperformed the ATX (10.5%) and IATX (14.4%). The EPRA NAV rose to EUR 22.27 per share in the reporting period – a significant increase over the prior-year figure of EUR 17.79 as of 31 March 2018. FFO I also advanced from EUR 9.8m in the first quarter of 2018 to EUR 10.8m as of 31 March 2019.
In May 2019, S IMMO AG successfully placed a corporate bond with a volume of EUR 150m. Along with refinancing the 2014–2019 bond, the proceeds will be used for acquisitions.
The company is examining options for purchases in all of its markets. In Germany, S IMMO is primarily investing in larger cities with promising demographic and economic development. In addition, it has acquired large-scale plots of land in the area surrounding Berlin. The company currently has an area of around one million square metres in Berlin’s commuter belt, which offers development and growth potential on a long-term basis. In CEE, the company has already purchased plots in Bucharest and Budapest in the current financial year.
According to Friedrich Wachernig, a member of the S IMMO AG’s Management Board, “We are currently making investment decisions that will benefit us in the short, medium and long term. This includes both revenue-generating portfolio properties as well as land and properties with development potential. We are securing long-term earnings opportunities – with sound reason and focused vision.”