euro adhoc: conwert Immobilien Invest AG
quarterly or semiannual financial
statement
conwert Immobilien Invest AG with twofold increase in revenues and
above-average growth in earnings for first half of 2007
Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement.
6-month report
27.08.2007
conwert Immobilien Invest AG with twofold increase in revenues and above-average growth in earnings for first half of 2007
Vienna, 27 August 2007. conwert Immobilien Invest AG (Vienna Stock Exchange: CWI, Reuters: CONW.VI, Bloomberg: CWI AV) continued its dynamic growth during the first half of 2007 and set new records for revenues and earnings. Revenues rose by 99% over the comparable prior year period to EUR 178.35 million. Earnings before interest and tax (EBIT) more than doubled within a single year to EUR 101.61 million and earnings before tax (EBT) increased 161% to EUR 90.09 million. Property assets grew to EUR 2.02 billion. The high quality of the portfolio expansion is also underscored in the increase in book value (NAV) per share, which rose to EUR 15.33 despite a significant increase in the number of shares outstanding and reflects growth of 6% since year-end 2006 (EUR 14.49 per share).
- Record revenues and earnings All revenue indicators showed a significant improvement during the reporting period. In comparison with the first half of 2006, revenues rose by 99% to EUR 178.35 million. Rental income increased to EUR 50.13 million and exceeded the comparable prior year value by 46%. In keeping with the internationalisation of the property portfolio, 44% of rental income is now generated outside Austria compared with 40% in the 2006 financial year. Proceeds on the sale of properties rose from EUR 55.44 million to EUR 128.22 million, or by 131%. The proceeds from the sale of individual objects in the holding and trading portfolios as well as the sale of condominium apartments exceeded the IFRS carrying amounts of these properties by roughly 18%. The resulting profit on these transactions equalled EUR 19.30 million (1-6/2006: gain on sale of EUR 7.93 million or 17% of the profit margin). On a cash basis, the total gain on sale exceeded the acquisition costs of these objects by approx. 22%. The positive development of revenues also supported an improvement in earnings indicators to new six month records. Funds from operations (FFO) rose from EUR 25.80 million in the first half of 2006 to EUR 40.76 million for the reporting period. Earnings before interest and tax (EBIT) more than doubled in comparison with the first six months of 2006 to EUR 101.61 million, also nearly reaching the EBIT recorded for the full 12 months of the previous year (EUR 104.42 million). These factors combined to produce a significant improvement in earnings before tax (EBT) to EUR 90.09 million, which represents an increase of 161% over the first half of 2006. Profit for the period nearly tripled for a year-on-year increase to EUR 67.18 million, whereby this figure includes only minimal cash outflows of EUR 49,000 for income taxes. The above-average growth in earnings, which was realised despite a higher equity ratio of 55% after the capital increase, underscores the earning power of conwert operations. Earnings per share rose from EUR 0.48 to EUR 0.93. Adjusted earnings per share, which includes only cash payments for income taxes, increased from EUR 0.72 to EUR 1.26.
- Excellent financial position and improvement in NAV Gross cash flow increased 72% over the prior year period to EUR 36.00 million. Equity rose by 55% from EUR 857.99 million on 31 December 2006 to EUR 1,333.03 million at the end of the reporting period. The equity ratio equalled 55% as of 30 June 2007, compared with 45% at year-end 2006. This gives conwert an excellent balance sheet structure to pursue the further expansion of business activities. The conwert property indicators showed strong development during the reporting period. The inherent value of the share (NAV/share) rose by 6% from EUR 14.49 at year-end 2006 to EUR 15.33, in spite of the higher number of shares outstanding after the capital increase. The adjusted net asset value per share, which also includes deferred taxes and undisclosed reserves in the property portfolio, equalled EUR 18.79 as of 30 June 2007. The price/earnings ratio equalled 15.38 at the end of the period, and the ratio of the share price to adjusted earnings was 11.35.
- Property portfolio exceeds EUR 2 billion-mark The acquisition of further high-quality objects for the portfolio raised the total volume of property assets above the EUR 2 billion-mark for the first time. During the first six months of 2007, the property portfolio rose from EUR 1.67 billion to EUR 2.02 billion, or by 21%, and now covers 1,238 objects. The total useable space equalled 1,570,050 m², compared with 1,322,412 m² at year-end 2006 and 1,154,332 m² as of 30 June 2006.
- Entry in the Slovakian market After establishing a successful position in the areas of older building renovation and new apartment construction in Hungary and the Czech Republic, conwert has now entered Slovakia, its third market in the CEE region. The company has concluded agreements covering the investment of EUR 29 million in this country over the next two years, and will develop 354 apartments with approx. 28,000 m² in Bratislava and Zilina.
- Continuation of growth course Based on the continued positive market environment, conwert plans to invest EUR 300 - 400 million in the expansion of the property portfolio during the second half of 2007. This will increase property assets to approx. EUR 2.2 - 2.4 billion. In addition to its expansion in Austria and Germany, conwert will also intensify its growth activities in the neighbouring CEE countries. The company has scheduled investments of roughly EUR 110 million for completion in the CEE region by 2009, which involve the revitalisation or construction of nearly 1,200 apartments with approx. 104,000 m². Another key success factor for the development of conwert is the active management of investment properties, which is designed to increase rental income when space is let or prices are adjusted. The Management Board expects a continuation of the positive development recorded by conwert, which will be supported by the company´s strategy to increase earnings and value as well as the attractive conditions on the residential property market. The expansion of the portfolio will also form the basis for an increase in rental income over the prior year. conwert plans to utilise the high level of demand and rising prices on individual submarkets to optimise earnings by accelerating its profitable sales activities. The annual volume of properties sold is forecasted to rise from the current level of approx. 10% of the total property portfolio to 15% over the mid-term, which will also strengthen the internal financing power of the company for new acquisitions. Therefore, the Management Board expects a significant improvement in earnings indicators compared with the previous year.
Selected Key Data
Key company figures in EUR million
1-6 2007 1-6 2006 Change 2006
Rental income 50.13 34.34 46% 79.54
Proceeds from the sale
of properties 128.22 55.44 131% 185.46
Total revenue 178.35 89.78 99% 265.00
Earnings before
interest and tax (EBIT) 101.61 47.46 114% 104.42
Financial results -11.53 -12.90 11% -27.39
Earnings before tax (EBT) 90.09 34.57 161% 77.03
Profit for the period 67.18 23.19 180% 51.67
Profit for the periodd
after minority interests 66.97 23.15 190% 51.82Balance sheet total 2,416.41 1,763.71 37% 1,921.85 Equity 1,333.03 826.62 61% 857.99 Equity ratio in %* 55.2 46.9 - 44.6 Adjusted equity ratio in %** 55.7 47.5 - 45.3
Funds from operations (FFO) 40.76 25.80 58% 64.62
* Equity incl. minority interest ** Equity incl. financing contributions from tenants
Key property figures
30.06.2007 30.06.2006 Change 31.12.2006
Number of objects 1,238 899 38% 981
Rental units 18,506 13,739 35% 15,376
Total usable space in m² 1,570,050 1,154,332 36% 1,322,412
Parking/garage spaces 5,403 3,208 65% 4,298
Property assets in EUR million 2,016,64 1,475,61 37% 1,673,37Key stock exchange figures
30.06.2007 30.06.2006 Change 2006
Earnings per share in EUR 0.93 0.48 94% 0.97
Adjusted earnings per share in EUR 1.26 0.72 74% 1.44
Share price at the end
of the period in EUR 14.30 14.90 -4% 16.40
Book value per share in EUR 15.33 14.00 10% 14.49
Adjusted NAV per share in EUR 18.79 n.a. - 19.19
Number of shares at the end
of the period 85,359,273 58,684,500 45% 58,684.500
Market capitalisation
in EUR million 1,220.64 874.40 40% 962.43
Price/earnings ratio 15.38 31.04 - 16.91
Price/adjusted earnings ratio 11.35 20.64 - 11.39end of announcement euro adhoc 27.08.2007 07:30:00
Further inquiry note:
conwert Immobilien Invest AG, Johann Kowar, Chairman of the Management Board,
T +43 / 1 / 521 45-200, E kowar@conwert.at
Hochegger|Financials, Roland Mayrl, T +43 / 1 / 504 69 87-31,
E r.mayrl@hochegger.com
Branche: Real Estate
ISIN: AT0000697750
WKN: 069775
Index: WBI
Börsen: Wiener Börse AG / official dealing