EANS-Adhoc: conwert shows satisfactory operating development in the first quarter of 2010 -clearly positive results
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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 % 0.90Balance 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 % 15.68Property 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 % 2,517.41) 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