Warimpex Finanz- und Beteiligungs AG

EANS-Adhoc: Financial year 2008: Warimpex boosts sales - difficult conditions dampen profit

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annual report


Financial year 2008: Warimpex boosts sales - difficult conditions dampen profit

@@start.t2@@. Revenues up by 16 per cent to EUR 94.4 million
      . Higher interest rates, non-scheduled  write-downs  and  value  adjustments
         cause loss for the year
      . Hotel portfolio expanded by three hotels and 382  rooms  for  a  total  of
         eighteen hotels with 2,699 rooms
      . Development potential still strong in the hotel sector in secondary cities
         in CEE, SEE and Russia

|Key figures in EUR millions                                    |2008        |2007 |Change
|Total revenues                                                         |94.4        |81.2 |+16%
|Gains from the sale of project companies                |13.9        |31.5 |-56%
|EBITDA                                                                      |29.4        |57.0 |-48%
|EBIT                                                                         |-3.4        |47.2 |-
|Profit for the year                                                 |-29.4      |33.7  -
|Earnings/loss per share in EUR                                |-0.81      |0.95 |-

|Number of hotels                                                      |18          |15    |+3
|Number of rooms (adjusted for proportionate share |2.699      |2.317|+382
|of ownership)                                                                         |
|Number of office and commercial properties            |6            |7      |-1
|Number of hotel development projects                      |7            |12    |-5

|                                                                              |31.12.2008|31.12.2007
|Gross asset value (GAV)                                          |666.7      |614.8|+8%
|Triple net asset value (NNNAV)                                |301.9      |387.4|-22%
|NNNAV per share in EUR                                            |8.4         |10.8 |-22%@@end@@

Vienna, 27 April 2009 - Even under the turbulent conditions  in   2008,  Warimpex Finanz- und Beteiligungs AG was able to boost its revenue by 16 per cent to  EUR 94.4 million in year-on-year comparison. Despite this  growth,  the  profit  for the year fell considerably compared to 2007. The construction of the four  hotel projects that are currently under development (the andel's in Berlin opened  in March 2009) is proceeding according to schedule.

Revenues from the operation of hotels increased by 21 per  cent  from EUR  71.6 million to EUR 86.7 million in 2008 due to the higher   average  weighted  number of hotel rooms. The  hotel  portfolio  grew by  three  hotels  to  a  total  of eighteen, and the average number of available rooms increased by 34 per cent.

EBITDA from the operation of hotels remained essentially  unchanged   from  2007. The primary reasons for the narrower margin  were  the   lower  occupancy  rates, especially in Prague, and changed exchange rates.  In  2008,  the  Polish  zloty appreciated by over 20 per   cent  against  the  euro,  for  example.  All  hotel operating costs are incurred in the local currency, while the  room  prices  are usually set in euro. The  Development  &  Asset  Management  segment, which  is responsible for property development and sale, is subject to greater  variations because its results are dependent on the sale of properties.  In  spite  of  the generally difficult conditions for real estate  transactions  in  the  reporting period, we were able to sell three properties at very good terms: a 10 per  cent share  in   the  Airport  City  development  project  in  St.  Petersburg,  Villa Margareta in Karlovy Vary, and the Pauler office building in   Budapest.  All  in all, sales proceeds were lower than in  2007,  and the  segment's  EBITDA  fell significantly. Consolidated EBITDA fell by 48 per cent from EUR 57.0 million  to EUR 29.4 million.

The values of properties  fell  considerably  because  of   significantly  higher yields and lower estimated free cash flows from hotel operations. As  a  result, non-scheduled write-downs were made on  properties  in  the  fourth  quarter  of 2008. Impairments on goodwill in the amount of EUR 19.8 million were  recognized because an external opinion showed a lower recoverable amount than the   carrying value on the reporting date. Taking into account the   scheduled  write-downs  of EUR 13 million, EBIT came in at -EUR 3.4 million. The financial result  amounted to -EUR 26 million, bringing the overall  result  for  the  year  to  -EUR  29.4 million.

Real estate assets Warimpex Group's real estate portfolio comprised twenty-four properties  at  the end of December 2008, of which eighteen were hotels with  over  3,800  rooms  in total (2,699 when adjusted for the proportionate share  of  ownership)  and  six office buildings with a total of 32,000 square metres of  utilisable  area. The Group also holds a large number of properties and development projects in  eight countries in Central and especially Eastern Europe, with  a  focus  on  Hungary, Germany, the Czech Republic, Poland and Russia.

The NNNAV shows the net value  of  the  Group.  CB  Richard  Ellis'   semi-annual valuation as of 31 December 2008 showed a 22 per cent decrease in the NNNAV  per share in year-on-year comparison because   of  significantly  higher  yields  and lower estimated  free  cash   flows  from  hotel  operations.  This  value  is  a snapshot, however, and at EUR 8.4 per share is roughly 85 per cent  higher   than the current share price. Outlook The opening of the angelo in Plzen and the expansion of the angelo in  Bucharest at the end of the third quarter of 2008, the opening of the  andel's  in  Berlin in the first quarter of 2009 and the upcoming opening of  the  andel's  in   Lodz and the angelo in Ekaterinburg is expected to boost the operating cash  flow  in Warimpex's Hotels & Resorts segment. The number  of  rooms  held  by  the  Group (when adjusted  for  the   proportionate  share  of  ownership)  is  expected  to increase by 683 to roughly 3,400 in 2009 as a  result  of  the  opening  of  new hotels.

Warimpex still sees great potential  in  the  hotel  sector  above   all  in  the secondary cities in CEE, SEE and Russia,  both  for  the tourism  and  business travel segments,  and  expects  that   occupancy  rates  will  be  constant.  The successful joint ventures with Vienna International are also being continued.

"More restrictive criteria in the award of financing in the  sector   will  cause delays in hotel  projects  that  are  not  fully   financed  in  2009,  and  will considerably slow the growth of the number of beds in CEE. However,  demand  for high-quality hotels is as high as ever. This creates  very  positive  conditions for  our   existing  hotels  and  the  hotels  that  we  currently    have     under construction. The hotel industry is also generally early cyclical. While  office properties are let out over the long term, and react  more  slowly  to  economic downturns and upswings, hotel rooms are let out anew every day. This means  that hotels are hit more quickly during a downturn, but  that  they  can  also  react immediately when the trend turns  and  that  room  rates  can  be   raised  again immediately when demand increases. Higher room  rates   combined  with  increased occupancy can  bring  massive  revenue   growth,"  concluded  Franz  Jurkowitsch, chairman of Warimpex's Management Board.

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ots Originaltext: Warimpex Finanz- und Beteiligungs AG
Im Internet recherchierbar: http://www.presseportal.ch

Further inquiry note:
Warimpex Finanz- und Beteiligungs AG
Phone: +43 1 310 55 00
Christoph Salzer
Daniel Folian, mailto:investor.relations@warimpex.com

Branche: Real Estate
ISIN:      AT0000827209
Index:    ATX Prime
Börsen:  Wiener Börse AG / official market

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