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conwert Immobilien Invest SE

EANS-Adhoc: conwert shows satisfactory operating development in the first quarter of 2010 -clearly positive results

  ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
  distribution. The issuer is solely responsible for the content of this
  announcement.
3-month report
26.05.2010
Vienna, 26 May 2010. conwert Immobilien Invest SE (Vienna Stock  
Exchange:  CWI, Reuters:  CONW.VI,  Bloomberg:  CWI  AV)  recorded  a
satisfactory   operating development with stable rental income and 
service revenues in the first  quarter of 2010. Attractive prices and
high margins were realised again on the  sale  of properties. 
However, a lack of package transactions caused the proceeds  on  the 
sale of properties to fall below the prior-year level.  Revenues  
thus  amounted to EUR 92.7 million versus EUR 115.4 million  in  the 
first  quarter  of  2009. Earnings  before  interest,  taxes,  
depreciation  and   amortisation   (EBITDA) equalled  EUR  24.9  
million  (1-3/2009:  EUR  26.9  million),  earnings  before interest 
and taxes (EBIT) EUR 22.2 million (EUR 24.2 million).
+ Stable rental income and service revenues
conwert  took  advantage  of  the  persisting  strong  demand  for   
residential properties in the first quarter of 2010. As a result  of 
new  rentals  and  the sale of objects, vacancies were reduced from 
18.3% in the first quarter of  2009 to 17.3% now. At the same time, a
newly constructed  development  of  6,000  sqm was completed in 
Slovakia in the first quarter and  handed  over  to  the  sales 
department for new rentals. On a  like-for-like  basis  rental  
income  grew  by 2.8%, thus clearly above  the  inflation  rate.  
Therefore,  rental  income  was retained at a stable level of EUR 
39.2  million  (1-3/2009:  EUR  40.0  million) despite the sale of 
completely developed objects let at market prices.
In the first quarter, when demand is traditionally  weaker,  the  
focus  of  the selling business was placed on  the  high-profit  sale
of  freehold  flats  and smaller individual properties. The  
properties  were  again  sold  significantly above IFRS book values: 
the profit margin amounted to 17%,  thus  exceeding  the prior-year 
level of 13%. The related gains based on  IFRS  values  equalled  EUR
6.7 million. Based on the acquisition cost, a cash profit  of  EUR  
9.4  million was realised. However, as  opposed  to  the  previous  
year,  no  major  package transactions took place in the reporting 
period. Therefore the proceeds  on  the sale of properties fell from 
EUR 67.3 million to EUR 45.3 million.
conwert recorded a stable development of service revenues in the 
first  quarter. Overall, revenues in this segment were up 15%  on  
the  previous  year  to  17.3 million, which  was  primarily  
attributable  to  the  progressing  transfer  of portfolio properties
to  the  company´s  own  property  management.  Third-party business 
accounted for 47% or EUR 8.2 million.
+ Positive key earnings figures and cash earnings
Due to the satisfactory development of  operating  business,  conwert
generated clearly positive results in the first quarter of 2010. 
However, the  decline  in sales volume could  not  be  compensated  
completely  by  the  focus  on  highly profitable single transactions
on the earnings side. In  addition,  conwert  had realised an 
extraordinary  positive  effect  on  earnings  of  EUR  7.8  million 
through the buy-back of convertible bonds in the first quarter of 
2009, so  that the key earnings figures have now fallen short of the 
high level of  the  prior- year period. Earnings before  interest,  
taxes,  depreciation  and  amortisation (EBITDA) amounted to EUR 24.9
million (1-3/2009: EUR 26.9 million).  As  in  the previous year, the
valuation result was neutral  (EUR  -0.2  million  after  EUR -0.1 
million), so that earnings before interest and taxes  (EBIT)  of  EUR
22.2 million (1-3/2009: EUR 24.2 million) were realised.  The  
financial  result,  at EUR -16.8 million, was below the prior-year 
figure of EUR -13.6 million.  Profit after income taxes was positive 
at EUR 4.1 million (1-3/2009: EUR 7.4  million). Basic earnings  per 
share  amounted  to  EUR  0.05  (1-3/2009:  0.08).  conwert generated
funds from operations (FFO) to the amount  of  EUR  13.0  million  
(1- 3/2009/ EUR 23.9 million).
+ Stable-value property portfolio - book value at EUR 15.84 per share
As of 31 March 2010 the  equity  of  conwert  remained  stable  at  
EUR  1,266.6 million compared with the end of 2009 (EUR 1,279.9 
million). The  equity  ratio, at  41%,  was  at  an  unchanged  high 
level  (12/2009:  43%).  Cash  and  cash equivalents equalled EUR 
165.0  million  as  of  31  March,  thus  significantly exceeding the
figure of EUR 61.6 million at year-end 2009.
Net assets per share (NAV/share) increased from EUR 15.68 at  
year-end  2009  to EUR 15.84. The share price was thus still roughly 
45% below the NAV.
+ Positive outlook for 2010 - Sales transactions under preparation
conwert expects the stable development to continue in the  
residential  property markets in Austria and Germany. Especially 
metropolitan regions  should  benefit from the expected economic 
upswing and  the  continuous  population  growth.  In addition to the
existing excess demand, prices and  rents,  above  all  in  good 
locations, will increase further as new construction activities are  
still  low. Moreover, demand  for  high-quality  residential  
properties  as  an  inflation- protected form of investment continues
to be strong.
In this environment, conwert expects an ongoing positive  business  
development. conwert will continue to reduce vacancies in the 
property  portfolio.  Moreover, benchmark rents, which were raised by
3.8% as of 1 April 2010 in  Austria,  will have an additional 
positive effect on rental income.  Several  transactions  are 
currently  being  prepared  in  the  sale  of  properties  segment.  
Therefore, increasing revenues are to be expected for the second  
quarter.  For  the  whole year 2010 conwert still plans revenues from
the sale of  properties  of  roughly 10% of the current property 
portfolio, or EUR 275 million. The  margins  on  the sale of 
properties are expected to match the historic levels reached so far 
(10- 15% IFRS profit margin). Overall, purchases are expected to 
exceed sales in  the financial year 2010.
In the property service segment, the focus is placed on a further  
expansion  of third-party business. Especially in the area of  asset 
management  for  foreign funds conwert sees further growth 
opportunities.
Provided  that  the  current  turbulences  in  the  capital  markets 
have   no
sustainable impact on  the  real  economy  and  the  financing  options  of  the
property  sector,  conwert  expects  the  positive  operating   development   to
continue. Accordingly, an earnings development that will build  on  the  success
of the year 2009 is expected for the year 2010.
The Interim Report 1-3/2010 of conwert Immobilien Invest SE is available on  the
website www.conwert.at.
Earnings Indicators
                                       1-3/2010   1-3/2009   Change   1-12/2009
Rental income                 EUR mill.   39.2        40.0     -2 %       162.3
Proceeds on the sale
   of properties              EUR mill.   45.3        67.3    -33 %       361.3
Service revenues              EUR mill.    8.2         8.1     +1 %        36.6
Total revenues                EUR mill.   92.7       115.4    -20 %       560.1
Earnings before interest,
   taxes, depreciation
   and amortisation (EBITDA)  EUR mill.   24.9        26.9     -7 %       105.0
Earnings before interest
   and taxes (EBIT)           EUR mill.   22.2        24.2     -8 %        94.9
Funds from operations (FFO)1) EUR mill.   13.0        23.9    -46 %        72.6
Net operating income (NOI)    EUR mill.   23.3        23.6     -1 %        94.6
Cash profit2)                 EUR mill.   13.0        23.8    -46 %        68.0
Basic earnings / share        EUR         0.05        0.08    -38 %        0.29
Diluted earnings / share      EUR         0.05        0.08    -38 %        0.29
Funds from operations / share EUR         0.16        0.29    -45 %        0.90
Balance sheet indicators
                                           3/2010     3/2009    Change  12/2009
Balance sheet total           EUR mill.   3,056.8    3,006.8     +2 %   2,962.5
Non-current loans and
   borrowings                 EUR mill.     978.9    1,007.7     -3 %     968.3
Current loans and borrowings  EUR mill.     289.8      323.3    -25 %     320.8
Equity                        EUR mill.   1,266.6    1,261.7      -     1,279.9
Equity ratio                  %              41.4       42.0      -        43.2
Gearing                       %             118.7      120.3      -       115.0
Book value (NAV)/ share       EUR           15.84      15.39     +3 %     15.68
Property indicators
                                           3/2010      3/2009   Change  12/2009
Number of objects            No.            1,746       1,696    +3 %     1,752
Rental units                 No.           24,576      24,659    +0 %    24,548
Total usable space           sqm        2,019,795   2,033,158    -1 % 2,018,254
Property assets              EUR mill.    2,533.2     2,543.6    +0 %   2,517.4
1) FFO: Earnings before tax (EBT) minus the net gain from fair value 
adjustments + difference between cash gains on sale and IFRS gains on
sale     + depreciation + non-cash parts of financial result and 
investment costs 2) Cash profit: FFO minus actual income taxes paid
end of ad-hoc-announcement ==========================================
This report contains forward-looking estimates and statements that 
were made on the basis of the information available at this time. 
Forward-looking statements reflect the point of view at the time they
are made. We would like to point out that the actual circumstances 
and, consequently, the actual results realised at a later date may 
differ from the forecasts presented in this report for a variety of 
reasons.
end of announcement                               euro adhoc

Further inquiry note:

conwert Immobilien Invest SE
Johann Kowar, CEO
T +43 / 1 / 521 45-200
E kowar@conwert.at

Peter Sidlo, Head of Corporate Communications - Investor Relations
T +43 / 1 / 521 45-250
E sidlo@conwert.at

Metrum Communications
Roland Mayrl
T +43 / 1 / 504 69 87-331
E r.mayrl@metrum.at

Branche: Real Estate
ISIN: AT0000697750
WKN: 069775
Index: WBI
Börsen: Wien / official market

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