Sparkassen Immobilien AG

EANS-Adhoc: Sparkassen Immobilien AG
Financial year 2009 - a year of contrasts

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annual report


Ad hoc release    Vienna, 28 April 2010

Sparkassen Immobilien AG Financial year 2009 - a year of contrasts

@@start.t2@@* First ever post-tax full-year loss following market-related property
      * Increase in revenues less directly attributable expenses to EUR 70.9
      * Occupancy rate steady at 90.3%
      * Conversion of participating certificates into shares planned
      * Outlook: strong Q1, cash from operations set to double starting in 2011

For stock exchange listed Sparkassen Immobilien AG (Bloomberg: SPI:AV,  Reuters:@@end@@

SIAG.VI), the financial year 2009 was a successful year operationally.  However, for the first time in the Group´s 22-year history  the  final  results  for  the year were negative, as a result of the effects of the financial crisis and  non- cash property revaluations.

For Sparkassen Immobilien AG the financial year 2009 was a  year  of contrasts. While for 2009 the effects on post-tax results of the financial crisis and  non- cash  revaluations  were  significantly   negative,  the  consistent,    long-term business strategy  produced   satisfactory  operating  results.  Major  operating indicators such as rental income, occupancy rate and cash flow  were  maintained at their existing level or even improved. Starting in the financial   year  2011, the Company will more than  double  its  operating  cash flow,  as  development projects are completed.

Operating results: rental income up, occupancy rate stable at high level The  highly  satisfactory  operating  results  were  primarily attributable  to persisting high occupancy levels.  Despite  the   difficult  market  environment, Sparkassen Immobilien AG has been   successful  in  holding  its  occupancy  rate constant, at 90.3%. The rental yield was  6.65%.  In  the  last  financial  year rental income rose by 2% and property assets  increased  to  EUR 1.901bn   (2008: EUR 1,808bn). As  at  31 December  2009,  Sparkassen   Immobilien  AG´s  property portfolio comprised 256 properties with total lettable space of 1,355,000 m².

The revenues less directly attributable expenses increased to  
EUR 70.9m,  after EUR 70.5m in 2008. Cash flow from operations of
EUR 49.4m was  approximately  at the same level as last year  
(EUR 50.0m).  The  completed  development  projects will be making
their full contribution to  profits  starting  in  the  financial
years 2010/2011.         One-off increases  in  expenses  in  connection
with  the successful completion  of  the  projects  resulted  in  a  
fall  in  Funds  From Operations (FFO) to EUR 22.0m.

Taking advantage of favourable sales opportunities During 2009 six rental properties were disposed of at a  profit.  This  included the Gemini office building in Prague, which was sold  to  Deka   Immobilien  GmbH for a price far in excess of the land acquisition costs and construction  costs. This transaction, with a value of around EUR 110m,  was  not  only  the  biggest sale in the history of Sparkassen Immobilien AG, but also one of  the  Company´s most successful development projects to date.

Increased transparency with EPRA standards The financial statements for 2009 have been  prepared  in  accordance  with  the standards of the European Public Real Estate Association (EPRA). The changes  in presentation affect the income statement and  the  method  of   calculating  NAV. This change as a result of the increased transparency  makes  the  Company  even more attractive to institutional investors, and easier  to  compare  with  other property companies. EBITDA fell from EUR 59.2m to EUR 53.3m. The good operating results  were  outweighed  by  non-cash  property   revaluations  of    EUR 97.2m, resulting in a negative EBIT of EUR 53.1m (2008: positive EBIT of EUR 23.8m).

Sparkassen Immobilien AG´s  cash  reserves  as  at  31 December  2009 stood  at EUR 210m.

All development projects on schedule In spite of the extremely   difficult  market  environment,  in  2009  Sparkassen Immobilien AG was able to continue  all  development  projects  -  the  shopping centres and office buildings Serdika Center in Sofia and Sun Plaza in Bucharest - as planned.  Two  other  projects  -  the  fully  let   student  residence  and geriatric centre in Sechshauser Strasse in Vienna and the  Austria  Trend  Hotel in Bratislava - were successfully completed in 2009 and officially opened.

The two biggest projects in the history of  the  Group  to  date,   the  shopping centres Serdika Center in Sofia and Sun Plaza in   Bucharest,  are  almost  fully let. The biggest shopping centres  in their  respective  countries,  they  were successfully opened in the first quarter of 2010.

s IMMO Share: year-to-date gain of 152.5% Sparkassen Immobilien AG´s share performed outstandingly in  2009,  closing  the year at EUR 5.00  (closing  price  27 April  2010:  EUR  5.10),  a   year-on-year increase of 152.5%. Erste Group and Vienna Insurance Group, two of the  region´s largest established financial  service   providers,  continue  to  be  Sparkassen Immobilien AG´s strategic core shareholders.

Analysts´ interest in the s IMMO Share also continued to  strengthen: Prominent names such as HSBC and SRC Research  have  started   providing  coverage  of  the share. All the analysts have currently issued "buy" recommendations, and  stress as a special strength the balanced portfolio in terms of use type  and  regional spread, the consistently high occupancy rate, the good tenant mix and the  broad spread of investors.

Conversion of participating certificates into shares planned On 22 April 2010 the Management and Supervisory Boards  resolved  on a  further step to standardise the treatment of the two groups of investors  in  Sparkassen Immobilien AG, the shareholders (ISIN AT0000652250),  and  the  holders  of  the participating certificates (ISIN AT0000630694 und ISIN AT0000795737). On 21  May the Annual General Meeting of Sparkassen Immobilien AG will vote on a motion  to offer  participating  certificate  holders    the    option    to     convert    their certificates into ordinary shares during three conversion windows.

The new shares necessary for the conversion will be issued  out  of   conditional capital.  Based  on  the  book  value  of  the   participating  certificates  and depending on the conversion window in question, the subscription price  will  be between 15% and 35% above the current share price of the s IMMO  share  (closing price 27 April 2010: EUR 5,10). Exercising the  conversion  option  enables the participating certificate holders to convert to the significantly more liquid  s IMMO Share. The shareholders in Sparkassen Immobilien AG  benefit  from  a  more transparent capital structure and an increase in market  capitalisation,  making the s IMMO Share more attractive.

Outlook: strong Q1, cash from operations set to double staring in 2011 For Sparkassen Immobilien AG, 2010 will be another good year, which has  already started with a strong first  quarter.  The  years of  project  development  and construction, during which several hundred million euro were not generating  any rental  income,  are   over  and  the  projects  are    contributing    positively. .For 2010, the  Group  is  calculating  on  cash  flows  of    EUR 75-85m    from operations, compared with EUR 49.4m in  2009,  and  for  2011  cash   flows  from operations are expected to be in excess of EUR 100m.

Sparkassen Immobilien AG Sparkassen Immobilien AG (Bloomberg: SPI.AV, Reuters: SIAG.VI) has  been  listed on  the  Vienna  Stock  Exchange for  22 years,  making  it  Austria´s    oldest established real estate investment company. It is a long-term value investor  in

@@start.t3@@residential, office, hotel and retail property in Austria,  Germany,  the  Czech Republic, Slovakia, Croatia, Hungary, Romania and Bulgaria.  As  at  31 December 2009 the total value of the property portfolio was EUR 1.901 billion  and  total lettable space was 1,355,100 m2.

Consolidated income statement for the year ended 31 December 2009

EUR m / fair value basis

|                                                                    |2009            |2008 1)         |
|Revenues                                                        |153.555        |125.682         |
| Rental income                                              | 87.553        | 85.737         |
| Revenues from service charges                    | 29.105        | 23.474         |
| Revenues from hotel operations                  | 36.897        | 16.471         |
|Other operating income                                 | 8.246         | 2.587          |
|Property management expenses                        | -61.192      | -45.207        |
|Hotel operating expenses                              | -29.701      | -12.575        |
|Revenues less directly attributable            | 70.908        | 70.487         |
|expenses                                                        |                  |                    |
|Income from property disposals                    | 152.173      | 52.975         |
|Carrying values of property disposals         | -150.273    | -44.657        |
|Gains on property disposals                         | 1.900         | 8.318          |
|Management expenses                                      | -19.533      | -19.594        |
|Profit before interest, tax, property         | 53.275        | 59.211         |
|valuation adjustments, and depreciation and|                  |                    |
|amortisation (EBITDA)                                  |                  |                    |
|Depreciation and amortisation                      | -9.113        | -4.737         |
|Losses on property valuations                      | -97.238      | -30.682        |
|Operating profit (EBIT)                                | -53.076      | 23.792         |
|Finance costs                                                | -35.541      | -9.552         |
|Participating certificates results              | 11.161        | -6.442         |
|Profit before taxes (EBT)                            | -77.456      | 7.798          |
|Taxes on income                                            | -1.412        | -2.072         |
|Profit on taxes                                            | -78.868      | 5.726          |
| of which attributable to shareholders in  | -78.559      | 5.813          |
|parent        company                                        |                  |                    |
| of which attributable to minority              | -309          | -87              |
|interests                                                      |                  |                    |
|                                                                    |                  |                    |
|Earnings per share                                        | -1.15         | 0.09            |@@end@@

1) Adjusted

|Property indicators          |                    |31.12.2009  |
|Completed properties         |Units            |256              |
|Total usable space            |m2 million    |1,355          |
|Rental yield                      |%                  |6.65            |
|Occupancy rate                  |%                  |90.3            |
|Land bank                          |Units            |6                 |

@@start.t4@@end of announcement                                                 euro adhoc

ots Originaltext: Sparkassen Immobilien AG
Im Internet recherchierbar:

Further inquiry note:
Investor Relations:
Sylwia Milke
Tel.: +43(0)50100-27402
Fax:  +43(0)05100-927402

Corporate Communications:
Bosko Skoko
Tel.: +43(0)50100-27522
Fax:  +43(0)05100-927522

Branche: Real Estate
ISIN:      AT0000652250
WKN:        065225
Index:    ATX Prime, IATX
Börsen:  Wien / official market

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