EANS-Adhoc: Sparkassen Immobilien AG: final results 2008 Profit despite difficult environment
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annual report
29.04.2009
Stock exchange listed Sparkassen Immobilien AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) closed 2008 - an economically extremely difficult year - with a clear profit despite devaluations, and boosted both revenues and rental income.
In comparison with the previous year Sparkassen Immobilien AG's revenues and rental income both grew by 14%, to EUR109.2m and EUR85.7m respectively. The Group exceeded its revenue forecasts considerably. This positive performance is attributable to additional property purchases and new lettings. Analysis of rental income by region shows that the majority of rents (71%) continued to come from Austria and Germany. By property use type, rental income from residential property has shown the greatest increase. The acquisition of additional residential buildings in Germany, which are generally less dependent on economic fluctuations, increased the proportion of residential rental income from 22% in the previous year to 33% in the year under review.
Market turbulence and the general sector trends led to Sparkassen Immobilien AG devaluing its portfolio by a total of EUR101.7m. The German portfolio was devalued by 8% and the CEE portfolio by 13.5%. A major part of these writedowns was made good by increases in value elsewhere, so that the net writedown amounted to EUR-30.7m. The valuation gains were largely the result of successful completion of the Gemini commercial and office property in Prague and the consequent revaluation from at cost to current market value, as well as profitable asset management activities, such as the conversion of the Novotel hotel in Bucharest.
The sale of eight properties from the property portfolio in 2008 brought gains of EUR8.3m. The assets were sold on average 19% in excess of the most recent estimated values.
EBITDA fell by 25%, from EUR78.9m to EUR59.2m. The target EBIT for 2008 of EUR36-48m was not attainable because of the marked deterioration in the market environment in the last quarter of the year. Actual EBIT for 2008 of EUR23.8m was nonetheless still significantly positive (2007: EUR100m). The decrease was predominantly a consequence of valuation write-downs, compared with gains of EUR41.1m in the previous year, leading to a valuation difference of EUR71.8m compared to the previous year. The net financing cost fell back from EUR-20.5m to EUR-9.6m, reflecting the greatly increased financing income in the form of interest income, currency gains and income from interests.
EBT fell from EUR35.4m to EUR7.8m. The consolidated net profit for the year was EUR5.7m. Sparkassen Immobilien AG's net operating income (NOI) rose from EUR64.5m to EUR67.9m, an increase of 5%. The NOI margin (NOI/revenues) stood at 60%. Cash flow from operations rose from EUR49.4m to EUR50.0m. Funds from operations (FFO) fell by 22%, and for the year under review amounted to EUR34.2m (2007: EUR43.8m).
Sparkassen Immobilien AG's property portfolio in financial 2008 grew by 9% to 1,511,400 m2 and 263 properties, mainly as a result of the acquisition of 34 standing properties in Germany and six properties in Austria, Croatia and Slovakia. The value of the portfolio at the end of 2008, at EUR 1.78bn, was 15% higher than at the end of the previous year. Development projects, which are recognised at cost of construction, made up 16% of the total value of the portfolio.
Residential property made up 44% of the standing portfolio, with the balance consisting of office properties (28%), commercial properties (17%), hotels (7%) and other properties (4%). More than half of the rental property is in Germany, with 27% of the portfolio in Austria and the remaining 22% in Slovakia, the Czech Republic, Croatia, Romania and Hungary. With the exception of a single office property in EU candidate country Croatia, all Sparkassen Immobilien AG's properties are in EU states.
The occupancy rate of the rental portfolio at balance sheet date remained unchanged, at 91%. The average gross rental yield (rent divided by market value) for all countries together at 31 December 2008 was 6.7%.
The accumulated investment in development projects at 31 December 2008 totalled EUR160.8m. The following are currently under construction: a residential and office building on Neutorgasse (Vienna), a student hall of residence on Sechshauser Strasse (Vienna), shopping centres Sun Plaza (Bucharest) and Serdika Center (Sofia), an office building Galvaniho 4 (Bratislava) and Hotel Vysoká (Bratislava).
With a 74% loss over the course of the year, s IMMO share still performed better than the I-ATX, but the year end closing price was down to EUR1.98 (2007: EUR7.73). The NAV (net asset value) at the end of 2008 was EUR8.9 per share (2007: EUR9.7), which combined with the lower share price meant a discount to NAV of 78% at balance sheet date. Earnings per share fell from EUR0.38 to EUR0.09. At EUR134.9m, market capitalisation was down 73% down on the value at the beginning of the year under review. Since the end of 2008, the market price of s IMMO share has improved considerably, with a year-to-date (as at 28 April 2009) performance of + 81.8%.
With Vienna Insurance Group, Sparkassen Immobilien AG gained a second important core shareholder alongside Erste Group in September 2008. The networks, expertise and integrity of both Companies - two of the largest financial services institutions in the region - strengthen the future development of Sparkassen Immobilien AG.
In the interests of a lean, easy-to-understand management structure, in 2008 the most important management functions and staff were brought inside the Company and integrated internally. In the process, the services provided by the Group's external partner, Immorent AG, were re-negotiated and embodied in a new management agreement. Bringing management in-house was entirely without cost to Sparkassen Immobilien AG's shareholders.
Sparkassen Immobilien AG's strategic focus in 2009 will be on optimisation of the existing portfolio, proactive asset management, completion of development projects under construction, and concentration on favourable opportunities for property purchases and sales. The property portfolio will grow to roughly EUR2bn in 2010.
Consolidated income statement for the year ended 31 December 2008 EUR m / fair value basis
|01.01. - 31.12. |01.01. - 31.12. |Change %
|2008 |2007|Revenues |109.2 |95.9 |+ 14 |whereof rental income |85.7 |75.0 |+ 14 |Revaluation of properties |(30.7) |41.1 | |Other operating income |6.5 |3.9 | |Gains on property disposals |8.3 |12.6 | |Operating revenue |93.3 |153.5 |(39) |Depreciation and amortisation |(4.7) |(3.9) | |Other operating expenses |(64.8) |(49.6) | |Operating profit (EBIT) |23.8 |100.0 |(76) |Finance costs |(9.6) |(20.5) | |Expenses of Participating |(6.4) |(44.2) | Certificates |Profit before tax (EBT) |7.8 |35.4 |(78) |Taxes on income |(2.1) |(6,7) | |Consolidated net profit |5.7 |28.7 |(80)
Property information as at 31 December 2008
|Number of properties |263 | |Total lettable space (m2) |1,511,400 | |- Austria |339,900 | |- Germany |602,700 | |- CEE |568,800 | |Property portfolio at fair value (EURm) |1,778.0 | |Occupancy rate |91% | |Average rental yield |6.7% |
end of announcement euro adhoc
Further inquiry note:
Investor Relations:
Rebecca Reichmann
Tel.: +43(0)50100-27402
Fax: +43(0)05100-927402
mailto:rebecca.reichmann@s-immoag.at
wwww.sparkassenimmobilienag.at
Corporate Communications:
Bosko Skoko
Tel.: +43(0)50100-27522
Fax: +43(0)05100-927522
mailto:bosko.skoko@s-immoag.at
wwww.sparkassenimmobilienag.at
Branche: Real Estate
ISIN: AT0000652250
WKN: 065225
Index: ATX Prime, Immobilien-ATX
Börsen: Wiener Börse AG / official market