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S IMMO AG: Half-year results highlight positive trend
· Profit for the period increases to EUR 20.9m
· Considerable improvement in financing costs
· Rental income, EBITDA and EBIT down due to property sales
· Goal: doubling FFO
With the publication of the results for the first half of 2015, stock exchange
listed real estate company S IMMO AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) is
confirming its positive trend and its goals for the current financial year.
Ernst Vejdovszky, CEO of S IMMO AG, has the following comment: "We are on track
with our ambitious plans, and the operating figures are completely in line with
our expectations. Our stated goal is to nearly double our FFO by 2018, raising
it from EUR 21.3m for the whole financial year 2014 to over EUR 40m."
Overall, the profit for the period increased by more than 27% to EUR 20.9m.
Earnings per share climbed to EUR 0.30 - a gain of roughly 36%. This positive
development is largely due to the financing result. The company already started
readjusting its financial structure in 2014. As part of this process, several
bonds were successfully issued, and participating certificates were bought back
and cancelled. Interest rate hedging instruments that were concluded in a higher
interest rate environment and were set to expire in the coming years were also
bought back. At the same time, S IMMO secured the current historically low
interest rate level for an average of roughly ten years for around two thirds of
its financing with variable interest rates.
Development of earnings
During the first six months of 2015, S IMMO AG's total revenues amounted to EUR
92.2m (HY 2014: EUR 93.2m). The rental income included in this figure reflects
the property sales completed since the beginning of 2014 and came to EUR 54.6m
(HY 2014: EUR 56.8m). The gross profit was EUR 50.7m (HY 2014: EUR 54.6m).
Six properties with a total book value of EUR 45.9m (HY 2014: EUR 39.6m) were
sold during the first half of 2015. EBITDA amounted to EUR 43.1m in the first
half of 2015 (HY 2014: EUR 47.0m).
The valuation result increased to EUR 9.7m (HY 2014: EUR 8.9m) during the
reporting period. This was largely due to the asset management activities aimed
at raising the value of the properties along with the steadily improving
sentiment in S IMMO's markets. EBIT totalled EUR 48.9m (HY 2014: EUR 52.2m).
The financing result including the participating certificate result came to EUR
-22.0m (HY 2014: EUR -31.6m) for the reporting period. This significant
improvement can be attributed to lower interest payments and a better foreign
currency result compared to the prior year. As a result, EBT amounted to EUR
26.9m (HY 2014: EUR 20.6m), which is 30.5% higher than the prior-year figure.
Due to the effects described above, the net income for the period edged up by
27.3% to EUR 20.9m (HY 2014: EUR 16.4m). Earnings per share increased by roughly
36% to EUR 0.30 (HY 2014: EUR 0.22).
FFO I, which does not include sales effects and represents the key indicator for
the operating performance of a real estate company, rose by 17.8% in the first
half of 2015, totalling EUR 17.9m (HY 2014: EUR 15.2m).
The S IMMO share significantly outperformed the ATX and the IATX during the
reporting period, with a gain of more than 20%. The share price at the end of
the quarter was EUR 7.45.
In the first half of 2015, both book value per share and EPRA NAV per share
increased compared with the first half of 2014, with the book value of equity
per share improving to EUR 8.44 as at 30 June 2015 (30 June 2014: EUR 7.87) and
EPRA NAV per share advancing to EUR 10.26 (30 June 2014: EUR 9.80).
Outlook for 2015: Investments and a further increase in consolidated net income
S IMMO is confirming its goal to once again increase its consolidated net income
in the current financial year. In addition, it aims to nearly double FFO by
2018, raising it from EUR 21.3m to over EUR 40m. The company's stated goal is
and will continue to be to position the S IMMO share as a reliable dividend-
paying share. In the medium term, the company aims to grow its property
portfolio. Roughly two thirds of the planned volume under the current investment
programme is earmarked for the acquisition of properties and land in Germany.
The management sees tremendous potential in Berlin's commercial real estate
As in the past, hedging interest rate risk is an important part of the company's
strategy. The current historically low interest rate level offers a favourable
environment for real estate companies in general. Therefore, interest rate
hedging instruments that were concluded in a higher interest rate environment
and were set to expire in the coming years were bought back. At the same time, S
IMMO is securing the current interest rate level by concluding new, long-term
hedging arrangements at the current conditions. The very positive effects of
these measures will start to be reflected in operating figures such as cash
flow, FFO I and FFO II in the second half of 2015 and then to their full extent
in the 2016 financial year.
S IMMO Management Board member Friedrich Wachernig sums up the company's outlook
as follows: "Our current investment programme, the hedging measures taken to
secure the current very favourable interest rate level, and the potential for
value increases offered by our portfolio provide ideal conditions for the coming
quarters and for our long-term dividend policy."
S IMMO AG
As Austria's first stock exchange listed real estate investment company, S IMMO
AG has stood for expertise, a strong portfolio, and profitable growth since
1987. The company invests in commercial property (office, retail, and hotel) as
well as residential property in four regions (Austria, Germany, and Central and
Southeastern Europe). S IMMO AG's strategic core shareholders are Erste Group
and Vienna Insurance Group.
Consolidated income statement for the period 01 January 2015 - 30 June 2015
in EUR m / fair value method
Revenues 92.2 93.2
whereof rental income 54.6 56.8
whereof revenues from operating costs 16.7 17.3
whereof revenues from hotel operations 20.9 19.1
Other operating income 1.4 2.3
Expenses directly attributable to properties -27.0 -26.2
Hotel operating expenses -15.9 -14.6
Gross profit 50.7 54.6
Income from property disposals 15.9 39.6
Book value of property disposals -15.9 -39.6
Gains on property disposals 0 0
Management expenses -7.7 -7.6
Earnings before interest,tax, depreciation,
and amortisation (EBITDA) 43.1 47.0
Depreciation and amortisation -3.8 -3.7
Results from property valuation 9.7 8.9
Operating result (EBIT) 48.9 52.2
Financing cost -22.3 -29.8
Financing income 0.7 0.8
Results from companies measured at equity 1.0 0.3
Participating certificates result -1.4 -2.9
Net income before tax (EBT) 26.9 20.6
Taxes on income -6.0 -4.2
Consolidated net income for the period 20.9 16.4
of which attributable to shareholders
in parent company 19.9 14.8
of which attributable to non-
controlling interests 1.0 1.6
Earnings per share (in 0.30 0.22
Key data on properties 30 June 2015
Portfolio properties Number 201
Total useable space million m2 1.2
Gross rental yield % 7.0
Occupancy rate % 91.6
Further inquiry note:
Andreas J. Feuerstein
end of announcement euro adhoc
company: S IMMO AG
sector: Real Estate
indexes: ATX Prime, IATX
stockmarkets: official market: Wien