EANS-Adhoc: conwert Immobilien Invest SE
conwert presents successful half-year
report: EBIT climbs 9% to EUR 51.7 million
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.
25.08.2010
conwert presents successful half-year report: EBIT climbs 9% to EUR 51.7 million
+ Second quarter sees rising revenues in all areas as against first quarter of 2010 + Strong positive earnings performance: EBIT up 9% year-on-year to EUR 51.7 million in first half-year + Successful ECO acquisition to increase value and income from third quarter
Vienna, 25 August 2010. Listed company conwert Immobilien Invest SE has concluded the first half of 2010 with an encouraging interim balance sheet. The residential property company significantly improved on its satisfactory operating performance in the opening quarter of the year in the second quarter of 2010. The strong demand for residential property and the push in sales activities had a positive impact on all business areas. For example, conwert recorded 5% growth in rental income (EUR 41.3 million), 62% growth in revenues from the sale of properties (EUR 73.3 million) and 30% growth in service revenues (EUR 10.7 million) in the second quarter of 2010 as against the first three months of the financial year.
With this strong operating development in the second quarter of 2010, the previous year´s earnings levels were maintained or even outperformed in the first six months of 2010. With revenues down slightly on the previous year at EUR 218.0 million in the first half of 2010 (1-6/2009: EUR 227.9 million) conwert generated a year-on-year rise in EBIT of 9% to EUR 51.7 million.
The full inclusion of ECO Business-Immobilien in consolidation will improve value and income from the third quarter of 2010 onwards: Thus, conwert is anticipating a positive earnings effect of around EUR 35-50 million from first-time consolidation.
Increase in rental income and service revenues
conwert increased its rental income by 0.2% year-on-year to EUR 80.5 million in the first half of 2010. In the reporting period, conwert made up for the lack of rental income due to the sale of a total of 636 units with its successes in asset management.
In sales business, conwert increased its revenues significantly in the second quarter of 2010 to EUR 73.3 million, a rise of 62% as against the first three months of 2010. As, unlike in the previous year, there were no major package transactions in the first quarter of 2010, disposal proceeds declined to EUR 118.6 million in the first six months after EUR 130.2 million. Sales were again significantly higher than their IFRS carrying amounts. The IFRS profits amounted to EUR 14.3 million with a profit margin of 14%. Based on total investment costs, conwert generated a cash profit of EUR 20 million with a profit margin of 20%.
conwert´s service revenues increased from EUR 33.2 million to EUR 37.1 million in the first half of 2010. EUR 18.9 million of this was generated in business with third parties, an increase of 9% on the previous year´s figure of EUR 17.4 million. The second quarter of 2010 went particularly well, with major agency and asset management orders in Austria and Germany being realised in revenues.
Positive earnings figures and cash earnings
conwert generated strong positive earnings in the first half of 2010. Thanks to the strong operating development, the earnings level was maintained or even exceeded in spite of the lack of non-recurring income from the buy-back of convertible bonds (EUR 0.5 million after EUR 10.2 million in the first half of 2009). conwert generated EBITDA of EUR 50.6 million on lower revenues (1-6/2009: EUR 55.6 million). The value of conwert properties, the success of asset management and the further improvement in the market environment were reflected in the gain on remeasurement of EUR 6.2 million after EUR 3.1 million in the same period of the previous year. conwert´s EBIT increased by 9% to EUR 51.7 million (1-6/2009: EUR 47.3 million). The financial result was down on the previous year at EUR 34.3 million (1-6/2009: EUR 29.8 million). Nonetheless, EBT was clearly positive and stable year-on-year at EUR 17.4 million (1-6/2009: EUR 17.5 million). conwert´s profit after tax rose by 4% to EUR 14.0 million. Basic earnings per share were also roughly on par with the previous year´s level at EUR 0.15 (1-6/2009: EUR 0.17). In addition, solid figures were achieved for operating cash in the first six months: conwert generated EUR 47.2 million in net rental income (NRI) (1-6/2009: EUR 48.1 million) and funds from operations of EUR 27.4 million despite the lack of income from the buy-back of convertible bonds (1-6/2009: EUR 44.4 million).
Stable value in property portfolio - NAV of EUR 15.20 per share
In the first half of 2010, the property portfolio grew by EUR 103.6 million as against 31 December 2009 to EUR 2,261 million. As at 30 June 2010, the portfolio consisted of 1,787 properties with total usable space of 2.05 million sqm.
Total assets increased by 5% as against 31 December 2009 to EUR 3,107.9 million. The reported equity of conwert increased as a result of the resale of treasury shares in particular from EUR 1,279.9 million as at the end of 2009 to EUR 1,296.7 million as at 30 June 2010. At 42%, the equity ratio remained at a high level (December 2009: 43%). However, net asset value per share declined year-on-year from EUR 15.68 at the end of 2009 to EUR 15.20 as at the reporting date on account of the higher number of shares (resale of 6,296,699 treasury shares). Nonetheless, the share price is still around 40% below NAV.
Confirmation of positive outlook for 2010
conwert expects the stable development for the residential property markets in Austria and Germany to continue. Metropolitan regions in particular should benefit from the expected economic upswing and the continuous population growth. In addition to the existing excess demand, prices and rents will increase further as new construction activity is still low, particularly in good locations. Moreover, demand for high-quality residential properties as an inflation-protected form of investment is still strong.
In this environment, conwert is anticipating that operating business developments will remain positive. conwert will also reduce the vacancies in its property portfolio. Rental income in the second half of the year will exceed the level for the first half on account of new leases, rent hikes and new acquisitions.
Several transactions are currently being prepared in the property sales segment. For 2010 as a whole, conwert is therefore still planning 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 achieved to date (10-15% IFRS profit margin). Overall, the property portfolio will grow significantly as against the end of 2009 as a result of the absorption of the ECO-Immobilien portfolio.
The property service segment will focus on a further expansion of third-party business. conwert feels there are further growth opportunities in the area of asset management for foreign funds in particular.
If the capital market and real economy continue to develop in a stable manner as forecast, conwert is anticipating a continuation in its positive operating business development. In addition, the full inclusion of ECO in consolidation will improve value and income from the third quarter of 2010 onwards. The positive earnings performance of 2009 should therefore be outstripped in the 2010 financial year with corresponding income opening the door for dividend payments.
The Financial Report 1-6/2010 of conwert Immobilien Invest SE can be found on the website www.conwert.at.
Earnings indicators
1-6/2010 1-6/2009 Change 1-12/2009
Rental income EUR mill. 80.5 80.3 - 162.3
Proceeds on the sale
of properties EUR mill. 118.6 130.2 -9% 361.3
Service revenues EUR mill. 18.9 17.4 9% 36.6
Total revenues EUR mill. 218.0 227.9 -4% 560.1
EBITDA EUR mill. 50.6 55.6 -9% 105.0
EBIT EUR mill. 51.7 47.3 9% 94.9
FFO 1) EUR mill. 27.4 44.4 -38% 72.6
Net Rental Income (NRI) EUR mill. 47.2 48.1 -2% 94.6
Cash profit2) EUR mill. 26.8 44.3 -40% 68.0
Basic earnings / share EUR 0.15 0.17 -12% 0.29
Diluted earnings / share EUR 0.15 0.17 -12% 0.29
Funds from operations / share EUR 0.34 0.55 -38% 0.90Balance sheet indicators
6/2010 6/2009 Change 12/2009
Balance sheet total EUR mill. 3,107.9 2,976.8 4% 2,962.5
Non-current loans/borrowings EUR mill. 1,006.2 970.3 4% 968.3
Current loans and borrowings EUR mill. 268.8 327.6 -18% 320.8
Equity EUR mill. 1,296.7 1,273.2 2% 1,279.9
Equity ratio % 41.7 42.8 - 43.2
Gearing % 120.6 116.5 - 115.0
Book value (NAV)/share EUR 15.2 15.56 -2% 15.68Property indicators
6/2010 6/2009 Change 12/2009
Number of objects No. 1,787 1,699 5% 1,752
Rental units No. 24,720 24,301 2% 24,548
Total usable space sqm 2,048,719 1,990,205 3% 2,018,254
Property assets EUR mill. 2,621.0 2,519.1 4% 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
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,
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