S IMMO AG: Record result leads to dividend increase
Net income more than doubled to EUR 77.2m.
- Dividend expected to be raised to EUR 0.30
- EBT up 88%
- EPRA NAV advances to EUR 11.75
Stock exchange listed S IMMO AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) has confirmed the preliminary figures released on 31 March 2016. The company once again delivered a record result in the 2015 financial year – net income more than doubled, coming in at EUR 77.2m. Ernst Vejdovszky, CEO of S IMMO AG, comments: “The positive development on the German real estate market played a key role in this success. In addition, the consistent reduction of our financing costs also had a very positive impact. Based on these results, we will propose a dividend distribution of EUR 0.30 at the Annual General Meeting.”
Friedrich Wachernig, member of S IMMO AG’s Management Board, adds: “It is our stated goal to continue on a course of profitable growth and increase the company’s net worth for our shareholders over the long run. In the 2016 financial year, we expect to see a further improvement in FFO, which in simplified terms represents cash flow after interest.”
Development of gross profit
S IMMO generated rental income of EUR 111.7m in 2015 (2014: EUR 111.8m). The sales completed over the past two years have naturally led to a reduction of rental income in annual comparison. Revenues from hotel operations (Vienna Marriott and Budapest Marriott Hotel) improved to EUR 45.5m (2014: EUR 42.1m). Higher room occupancy and an increase in room rates contributed to this positive development. As a result, S IMMO’s total revenues amounted to EUR 190.7m in 2015, slightly higher than in the previous year (2014: EUR 188.5m). Gross profit totalled EUR 105.2m (2014: EUR 105.7m).
Acquisitions in Germany
In the 2015 financial year, S IMMO sold six properties in Germany and Austria with a total book value of EUR 45.9m (2014: EUR 51.6m). At the same time, S IMMO bought 24 properties in Germany and one property in Vienna at a total purchasing price of EUR 140.5m during the reporting period.
EBIT increases thanks to very strong revaluation gains
EBITDA for the 2015 financial year came to EUR 88.7m (2014: EUR 89.8m). Revaluation gains developed very positively in 2015, amounting to EUR 84.6m as at 31 December 2015 (2014: EUR 56.6m). This was due to both the asset management activities aimed at raising the value of the properties and the steadily improving sentiment on the German real estate market. Properties in Germany accounted for EUR 73.1m (2014: EUR 33.4m) of the revaluation gains. As a result, EBIT improved to EUR 165.7m (2014: EUR 138.7m), an increase of 19.4%.
Improvement in financing result
The financing result including the participating certificate result amounted to EUR -53.4m as at 31 December 2015 (2014: EUR -79.2m). This significant improvement can be attributed to, among other factors, the improved results from derivatives, lower interest payments, and a better foreign currency result compared with the prior year.
Net income at record level
Consequently, EBT came in at EUR 112.3m (2014: EUR 59.5m), an increase of 88.6% over the previous year. On balance, S IMMO ended the 2015 financial year with a net income of EUR 77.2m (2014: EUR 33.8m). Earnings per share also improved significantly and came to EUR 1.17 (2014: EUR 0.46).
Success on the capital market
The S IMMO share had an outstanding year in 2015: On 31 December, the share was listed at EUR 8.20, an increase of 32.90%. Adding the distributed dividend of EUR 0.24 to the closing price results in a performance of 36.79%. The ATX delivered annual performance of 11.16%, while the industry index IATX gained 17.59%. Consequently, the S IMMO share significantly outperformed both indices.
The Management Board feels that the further improvement in the business results justifies an increase in the dividend. Therefore, a proposal to raise the dividend to EUR 0.30 per share will be submitted to the Annual General Meeting on 03 June 2016. The positioning of the S IMMO share as a sustainable dividend-paying stock is in line with the company’s long-term strategy.
Outlook for 2016
In the 2016 financial year, S IMMO expects to see a further improvement in FFO (funds from operations) compared with 2015. The company expects to achieve value enhancements in the existing portfolio once again in 2016 through targeted asset management, successful letting, refurbishment measures, and positive developments in some of our core markets, particularly in Berlin. In terms of investments, S IMMO sees the greatest potential in Germany, especially for office properties and plots of land offering development opportunities. The company is evaluating rezoning measures, refurbishment projects, and the development of spaces on plots of land already in the portfolio.
In Vienna, the company is involved in office development projects at Vienna Central Station. Construction will start on one of these projects this spring. In addition, construction will start on the office project The Mark in the heart of Bucharest’s main business district. The renovation of Sun Plaza shopping centre has also already begun in Bucharest. According to Ernst Vejdovszky, “Overall, we expect 2016 to be a good year – for the real estate industry in general and for S IMMO in particular.”
Consolidated income statement according to IFRS for the period 01 January 2015–31 December 2015 in EUR m
01 – 12/2015
01 – 12/2014
thereof rental income
thereof revenues from operating costs
thereof revenues from hotel operations
Other operating income
Expenses directly attributable to properties
Hotel operating expenses
Income from property disposals
Book value of property disposals
Gains on property disposals
Depreciation and amortisation
Gains on property valuation
Operating result (EBIT)
Participating certificates results
Net income before tax (EBT)
Taxes on income
Consolidated net income
of which attributable to shareholders in parent company
of which attributable to non-controlling interests
Earnings per share (EUR)