EANS-Adhoc: S IMMO AG earnings more than doubled in the first half of 2011
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6-month report
29.08.2011
S IMMO: earnings more than doubled in the first half of 2011
Net income for the period doubled to EUR 10.1m
EBIT up by 70.6% to EUR 51.3m
Operating cash flow up by 81.9%
Occupancy rate at impressive 91.2%
Stock exchange listed S IMMO AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) has
excellent results to report for the first half of 2011. Compared with the same
period last year, rental income, gross profit and EBIT have all increased
significantly.
Gross profit up by more than 30% compared with the first half of 2010
Rental income for the first half of 2011 was more than satisfactory at
EUR 61.7m (first half of 2010: EUR 48.2m). The buildings in Vienna´s Viertel
Zwei, acquired last December, contributed fully to earnings for the first time.
The growth in rental income was also partly attributable to income from
development projects that were completed during the last financial year.
The continuing positive trend in hotel business in Vienna and Budapest was
reflected in the performance of S IMMO´s hotels. Income from hotel operations
increased from EUR 17.0m to EUR 19.6m. Despite a slight increase in expenses of
hotel operations, profits in the first half of 2011 were up by 25% to EUR 4.2m.
Overall, gross profit for the first half of 2011 rose 30.5% to EUR 54.5m
compared with EUR 41.8m in the same period last year.
EBIT up by more than 70%
In the first half of 2011, S IMMO disposed of four properties in Vienna and
Berlin as well as four apartments in the mixed residential and office building
Neutor 1010 in Vienna. The gains on property disposal amounted to EUR 3.9m and
were a major contribution to raising the EBITDA from EUR 36.8m to EUR 49.5m, an
increase of 34.7% compared with the same period last year. EBIT was up by
70.6% to EUR 51.3m (first half of 2010: EUR 30.1m).
As at 30 June 2011, financing costs amounted to EUR 32.0m, including a non-cash
foreign exchange loss of EUR 3.4m. The loss was a result of the decline of the
EURO against currencies in Central and Southeastern Europe (Romanian leu,
Hungarian forint, Czech crown and Croatian kuna). The overall net income for
the period doubled compared with the same period last year and amounted to EUR
10.1m.
Operating cash flow up by 81.9%
Compared with the first half of 2010, S IMMO achieved a significant increase in
funds from operations (FFO), which jumped 31.6% to EUR 21.6m. The Group´s
excellent performance was also reflected in improved NOI, which rose from
EUR 38.7m to EUR 50.2m. Operating cash flow for the first half year was
EUR 51.3m, an increase of 81.9% compared with the same period last year.
EPRA NAV, the net asset value of the share calculated in accordance with the
guidelines of the European Public Real Estate Association, was also up again to
EUR 8.54 per share, compared with EUR 8.34 per share at the end of 2010.
244 properties: portfolio worth more than EUR 2bn
As at 30 June 2011, the Group owned a total of 244 properties - mostly in
European Union capitals and large German cities. At balance sheet date, the
property portfolio had a market value of EUR 2,005.9m with total let floor
space of over 1,400,000 m². The portfolio is diversified by region as well as
by property use type, with approximately 60% of the property portfolio in
Western Europe and the remaining 40% in Central and Southeastern Europe. A
detailed breakdown by region shows that 31.5% of the portfolio is in Austria,
28.3% in Germany, 21.1% in SEE and 19.1% in CEE. By property use type, the
portfolio is made up of office properties (35.7%), retail properties (26.5%),
residential properties (23.9%) and hotels (13.9%). Rental yield is a very
satisfactory 6.6%.
Successes in asset management and focus on development projects
S IMMO´s active asset management also proved effective in the first half of
2011. Despite the extremely difficult economic environment in some countries, S
IMMO achieved outstanding letting successes in the first half of this year. For
example, the Company was able to acquire renowned companies such as H&M and
Diesel as tenants for the shopping centres Sun Plaza and Serdika Center. The
overall occupancy rate of the portfolio is at a very satisfying 91.2%.
For development projects, the Company´s focus in the second half of 2011
continues to be on preparing the development sites for construction. Currently,
the process of acquiring zoning permissions is underway, including permission
for the new urban development, Quartier Belvedere. This will be located at the
new Vienna Central Station, where one of Europe´s largest innercity development
projects is taking shape. A unique office, residential and retail quarter is to
be built on a total area of 550,000 m². In cooperation with Erste Group
Immorent and PORR Solutions, S IMMO is developing a prominent sub-project. The
working title for the project, with 136,000 m² of gross floor space, is
"Quartier Belvedere Central". The development will comprise a mix of offices,
hotels and retail space, and will be constructed in several stages. Zoning
permission is expected to be granted for the beginning of 2012, and the
construction permit later in the same year.
S IMMO Share trading at far below NAV
S IMMO Share closed at EUR 4.632 at the end of the first half of 2011 and did
not escape the effect of stock exchange developments of recent weeks. At the
same time the traded volume has doubled - a reflection of the markets´
volatility. The poor performance of the S IMMO Share is clearly the result of
the upheavals in international capital markets, however, the Management is
anything but satisfied with the Share´s current discount to net asset value.
Continuing to stress obvious upside potential of S IMMO Share as well as
achieving Share inclusion into the relevant industry indexes and simplifying
the capital structure are on the agenda for the next months. The Group
therefore started another repurchase programme for S IMMO INVEST participating
certificates, and since the beginning of the year has repurchased approximately
8.5% of the certificates.
Outlook
S IMMO´s operating performance is completely in line with plans, and at this
time Management expects the second half of the year to be equally successful.
The Group will continue its building refurbishment programme in Germany, where
over the last twelve months the occupancy rate rose from 86% to 90% and rental
income grew by 3.3% in spite of disposals. S IMMO will also leverage the
potential for growth in SEE
countries, in particular, as soon as these countries have fully recovered from
the economic crisis. The economic growth predicted for this region over the
next few years is very encouraging.
Consolidated income statement for the six months ended 30 June 2011
EUR m / fair value basis
| |01 - 06/2011 |01 - 06/2010 |
|Revenues |102.3 |79.4 |
| Rental income |61.7 |48.2 |
| Revenues from service charges |21.0 |14.1 |
| Revenues from hotel operations |19.6 |17.0 |
|Other operating income |4.3 |3.1 |
|Expenses directly attributable to properties |-36.7 |-26.9 |
|Hotel operating expenses |-15.4 |-13.7 |
|Revenues less direct expenses |54.5 |41.8 |
|Income from property disposals |18.3 |57.7 |
|Carrying value of property disposals |-14.4 |-55.1 |
|Gains on property disposals |3.9 |2.6 |
|Management expenses |-8.9 |-7.6 |
|Earnings before interest, tax, depreciation and |49.5 |36.8 |
|amortisation (EBITDA) | | |
|Depreciation and amortisation |-4.8 |-5.0 |
|Gains / losses on property valuation |6.6 |-1.7 |
|Operating result (EBIT) |51.3 |30.1 |
|Financing costs |-32.0 |-18.5 |
|Participating certificates results |-6.8 |-5.0 |
|Net income before taxes (EBT) |12.5 |6.6 |
|Taxes on income |-2.4 |-1.5 |
|Net income for the period |10.1 |5.0 |
| of which attributable to shareholders in parent |7.3 |6.2 |
|company | | |
| of which attributable to non-controlling interest|2.8 |-1.2 |
| | | |
|Earnings per share (EUR) |0.11 |0.09 |
|Property information | |30 June 2011 |
|Standing properties |units |244 |
|Total let floor space |m² |1,440,837 |
|Gross rental yield |% |6.6 |
|Occupancy rate |% |91.2 |
Further inquiry note:
Investor Relations:
Andreas J. Feuerstein
Phone: +43(0)50100-27556
Fax: +43(0)05100-927556
E-mail: andreas.feuerstein@simmoag.atwww.simmoag.at
Corporate Communications:
Bosko Skoko
Phone: +43(0)50100-27522
Fax: +43(0)05100-927522
E-mail: bosko.skoko@simmoag.atwww.simmoag.at
end of announcement euro adhoc
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issuer: S IMMO AG
Friedrichstraße 10
A-1010 Wien
phone: +43(0)50100-27550
FAX: +43(0)050100-927559
mail: office@simmoag.at
WWW: www.simmoag.at
sector: Real Estate
ISIN: AT0000652250
indexes: ATX Prime, IATX
stockmarkets: official market: Wien
language: English