conwert Immobilien Invest SE

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Financial Figures/Balance Sheet / conwert: results for 1-9/2008 supported by solid operational development - EBIT of EUR 108.27 million below prior year level (EUR 137.70 mill.) due to decline in ...

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9-month report


conwert: results for 1-9/2008 supported by solid operational development - EBIT of EUR 108.27 million below prior year level (EUR 137.70 mill.) due to decline in revaluations- clearly positive cash earnings

Vienna, 26.11.2008. conwert Immobilien Invest SE (Vienna Stock Exchange: CWI, Reuters: CONW.VI, Bloomberg: CWI AV) recorded sound operational development for the first nine months of 2008 in an environment made challenging by the liquidity and financial crisis. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 21% year-on-year to EUR 68.67 million. This growth was supported above all by the growth of rental income, which increased 43% to EUR 110.06 million. However, earnings before tax (EBIT) fell to EUR 108.27 million (1-9/2008: EUR 137.70 mill.) due to a decline in revaluation income. Cash earnings (FFO) and cash profit were clearly positive at EUR 35.49 million and EUR 34.89 million, respectively. Net assets (NAV) per share increased 9% to EUR 16.89. Property assets totalled EUR 2.60 billion as of 30 September 2008.

Sound development of rental income

The core rental business recorded stable growth during the first nine months of 2008: in comparison with the prior year, rental income rose by 43% to EUR 110.06 million. This increase was supported above all by a reduction in vacancies and higher prices on new rentals, and to a lesser extent by the expansion of space. The excellent organic development of rental income is underscored by a like-for-like analysis (unchanged property portfolio in comparison with the first nine months of 2007), which shows an increase of 9%. The difficult operating environment on property investment markets led to a decline in portfolio transactions during the reporting period. As a result, proceeds on the sale of properties fell to EUR 105.46 million from the above-average prior year value of EUR 171.21 million. However, property sales in the last three months of this year should exceed the level of the first three quarters. The prices realised on these sales exceeded the relevant IFRS figures, even under the current challenging market conditions. The related gains totalled EUR 13.87 million, while the selling margin equalled 15% based on the IFRS values. The cash margin based on the acquisition price amounted to 28%. The property services segment generated revenues of EUR 49.26 million for the first three quarters of 2008, for an increase of 14% over the preceding quarter. Of this total, EUR 27.82 million were recorded with companies outside the conwert Property Group. The provision of property services generated revenues of EUR 243.33 million during the first nine months (1-9/2007: EUR 248.40 mill.).

Clearly positive profitability indicators and cash earnings

Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose from EUR 56.72 million in the first three quarters of 2007 to EUR 68.67 million for the reporting period. The revaluation of properties that is required by IFRS was again clearly positive at EUR 47.18 for the first nine months of 2008 due to the high quality of these objects and a further increase in earnings on the existing portfolio but as expected, these fair value adjustments failed to match the comparable prior year level (EUR 80.98 mill.). Lower revaluation gains and proceeds from the sale of properties were responsible for a decline in earnings before interest and tax (EBIT), which fell from EUR 137.70 million to EUR 108.27 million. Financial results were clearly negative at EUR -56.98 million (1-9/2007: EUR -21.09 mill.) due to the negative share of profit from ECO Business-Immobilien AG (EUR -4.185 mill.) and higher interest rates on new financing. These developments also had an impact on earnings before tax (EBT), which decreased 56% to EUR 51.29 million (1-9/2007: EUR 116.61 mill.). Cash earnings, which exclude non-cash effects, were clearly positive for the reporting period. In spite of a decrease in proceeds on the sale of properties and a further decline in financial results, funds from operations (FFO) and cash profit were clearly positive at EUR 35.49 million (1-9/2008: EUR 39.24 mill.) and EUR 34.89 million (1-9/2007: EUR 38.45 mill.), respectively. Net assets (NAV) per share rose 9% to EUR 16.89 (1-9/2007: EUR 15.52).

Outlook on 2008

The conwert Property Group is well-equipped to deal with this difficult market environment because of its high value added, diversification and opportunities for organic growth. However, the group will be unable to completely disengage from the external influence of the financing sector or the current market-based reservation that has led to a decline in property transactions. In order to support the further growth of organic earnings, conwert will continue to concentrate on the intensive management and development of the existing property portfolio. conwert therefore expects a continuation of the steady year-on-year increase in rental income, but sales activities will still be influenced by volatility. Proceeds from trading activities remained below expectations for the first three quarters of 2008, and will therefore presumably fail to meet the target for 10-15% of the total portfolio that was announced in June of this year. However, property sales in the last three months of this year should exceed the level of the first three quarters. The property portfolio, including the selective acquisition and sale of objects, should equal approx. EUR 2.5 billion at the end of 2008. The sound development of business in the property services segment should continue during the fourth quarter. However, conwert expects a decline in internal revenues from the management companies because of the cutback in property transactions. Therefore, revenues from the property services segment will grow less dynamically than originally forecasted. The continuing difficult conditions on financial and capital markets lead to expectations of a temporary slowdown in the pace of growth originally forecasted for the conwert Property Group in 2008. Despite strong development in the rental business and the new service activities, operating results for the full 2008 financial year will not match the record prior year results because of lower proceeds from the sale of properties and revaluation gains as well as higher financing costs. Against the backdrop of this market situation, conwert expects solid results for the 2008 financial year.

The report by conwert Immobilien Invest SE on the first three quarters of 2008 is available in German and English on the website under

Key Company Figures

@@start.t2@@1-9/2008      1-9/2007        Change          2007
Rental income                    EUR mill.      110.06          77.18         + 43%        109.49
Proceeds from the
  disposal of properties  EUR mill.      105.46         171.21         - 38%        252.47
Service revenues                EUR mill.        27.82                 -                -          1.16
Revenues                            EUR mill.      243.33         248.40          - 2%        363.11
Earnings before interest,
  taxes, depreciation and
  amortisation (EBITDA)    EUR mill.        68.67          56.72         + 21%         75.53
Earnings before interest
    and tax (EBIT)              EUR mill.      108.27         137.70         - 21%        172.53
Earnings before tax (EBT) EUR mill.        51.29         116.61         - 56%        145.15
Funds from operations
    (FFO) 1)                        EUR mill.        35.49          39.24         - 10%         62.41
Cash profit 2)                  EUR mill.        34.89          38.45          - 9%         60.10
Equity                                EUR mill.  1,385.32      1,351.48          + 3%    1,407.25
Equity ratio                                 %         44.65          53.71                -         47.7
Gearing                                         %        107.02          62.91                -         85.8@@end@@

Key Property Figures

@@start.t3@@Number of objects                        Nr.        1,708          1,387          + 23%        1,590
Rental units                                Nr.      24,968         19,963          + 25%      23,283
Parking spaces                            Nr.        7,825          5,508          + 42%        6,832
Total usable space                      m²  2,045,549    1,661,015          + 23% 1,896,898
Property assets                 EUR mill.  2,602.66      2,146.69          + 21%  2,345.25@@end@@

Key Stock Exchange Figures

@@start.t4@@Basic earnings/share                 EUR          0.46          1.15            - 59%         1.46
Diluted earnings/share              EUR          0.46          1.15            - 60%         1.44
Adjusted earnings/share 3)        EUR          0.62          1.52            - 59%         1.82
Book value/share                        EUR         16.89         15.52              + 9%        16.25
Adjusted NAV/share 4)                EUR         21.61         19.89              + 9%        20.78
Funds from operations/share      EUR          0.43          0.51            - 16%         0.79@@end@@

1) FFO: Earnings before tax (EBT) - net gain on the adjustment of fair value + cash gains on the sale of properties in relation to IFRS gains on sale 2) Cash profit: FFO - actual taxes paid 3)Earnings per share after an adjustment for income taxes paid 4)Book value per share after an adjustment for unrecognised appreciation in the property portfolio and deferred taxes

This report contains forward-looking estimates and statements that were made on the basis of the information available at this time. These forward-looking statements are usually described in terms such as "expect", "estimate", "plan", "reckon", "assume", "should", "supposed to", "can", etc. 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.

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ots Originaltext: conwert Immobilien Invest SE
Im Internet recherchierbar:

Further inquiry note:
conwert Immobilien Invest SE, Johann Kowar, Chairman of the Executive Board
T +43 / 1 / 521 45-200, E

Peter Sidlo, Head of Corporate Communications - Investor Relations,
T +43 / 1 / 521 45-250, E

Hochegger|Financials, Roland Mayrl, T +43 / 1 / 504 69 87-31,

Branche: Real Estate
ISIN:      AT0000697750
WKN:        069775
Index:    WBI
Börsen:  Wiener Börse AG / official dealing

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