EANS-Adhoc: conwert Immobilien Invest SE
conwert achieves record revenues in
the first half of 2009 - Clearly positive results also in the second quarter -
Cash earnings +72% to EUR 44 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.
6-month report
26.08.2009
conwert achieves record revenues in the first half of 2009 - Clearly positive results also in the second quarter - Cash earnings +72% to EUR 44 million
+ Strong operating development based on the expansion of the rental and sales business: total revenues +31% to EUR 227.91 million + Clearly positive earnings development in the first half-year 2009: EBITDA +16% to EUR 55.58 million, cash earnings (FFO) +72% to EUR 44.44 million + Revenue and earnings increases expected for 2009 as a whole
Vienna, August 26, 2009. The business development of the publicly listed company conwert Immobilien Invest SE was characterised by a strong operating performance in the first half of 2009. Decidedly positive earnings could be achieved in the first as well as in the second quarter. conwert posted record half-year results in respect to revenues (+31% to EUR 227.91 million), earnings before interest, taxes, depreciation and amortisation (EBITDA, +16% to EUR 55.58 million) and cash earnings (Funds from Operations, FFO: +72% to EUR 44.44 million). This improvement primarily relates to the higher rental income and the increased proceeds from the sale of properties. The company expects an overall positive business development in 2009.
- Strong operating development Due to intensified marketing and sales activities, conwert considerably expanded its rental business as well as sales of properties compared to the first half of 2008. In the rental business, the average rental price in the residential segment rose 5% within one year, whereas total vacancies were reduced by 17%. During the period under review, the sale of apartments more than doubled from the previous year, and proceeds on the sale of properties climbed 55%, to a new record level of EUR 130.20 million. With an average selling price of EUR 2,035 per square meter, the sold properties exceeded the recently assessed values (IFRS book values) by 16%. On a cash basis, a consistently high profit margin of 27% could be realised. In addition to expanding its operating business, conwert implemented a programme designed to optimize the cost and financing structure in the first half of 2009, as planned. The cost reduction and efficiency-enhancement drive initiated at the beginning of the year was completed and showed initial success. As a result, personnel and other operating expenses were down to 12.9% of total revenues in the first half of 2009 from 15.9% in the 2008 financial year. Net debt was further reduced, enabling the equity ratio to rise from 42% at the end of 2008 to 43% as of June 30, 2009.
- Increased rental income and proceeds from property sales Total revenues rose to EUR 227.91 in the first half of 2009, up from EUR 174.00 in the first six months of 2008. This improvement can be attributed to the significant increase in rental income, the strong development in proceeds on the sales of properties, and the stable proceeds from the service segment. The growth in rental income (+11% to EUR 80.34 million) primarily resulted from the reduction in vacancies in Germany and higher rents from new rental contracts in Austria. On a like-for-like basis (unchanged portfolio), the increase amounted to 6%, which demonstrates the very good organic development of rental income. Vacancies were reduced to below 18% for the first time as a result of the consistent implementation of a letting programme. Development vacancies were reduced from 12.67% in the previous year to 8.84%; at roughly 9%, actual vacancies remained stable. Due to the lively demand for freehold flats and apartment houses, proceeds on the sale of properties were up 55% year-on-year, amounting to EUR 130.20 million. The prices realised on these sales once again significantly exceeded the relevant IFRS book values. The related gains totalled EUR 17.5 million (IFRS margin: 16%). Based on acquisition costs, a consistently high profit margin of 27% was achieved. In the current business environment, revenues from property services have emerged as a stable contributor to earnings. Business with third party mandates accounted for EUR 17.37 million in revenues.
- Earnings development: decidely positive results also in the second quarter As in the first quarter, conwert also achieved clearly positive results in the second quarter of 2009 based on a strong operating development. In the first six months of 2009, earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 55.58 million, up from EUR 48.03 million in the comparable prior-year period. Cash earnings also increased considerably. Funds from operations (FFO) rose to a record high level of EUR 44.44 million, an increase of 72% compared to the previous year´s figure of EUR 25.87 million. Thus, on a cash basis, 83% of the FFO in 2008 has already been achieved in the first six months of 2009. FFO/share improved by 77% in a year-on-year comparison, from EUR 0.31 to EUR 0.55. The other earnings indicators were affected by non-cash effects from property valuation in the first half of 2009. Minor impairment losses of EUR 3.12 million in the reporting period caused considerable distortion in comparison to the first half of 2008, when revaluation gains of EUR 44.13 million were recorded. Nevertheless, the operating result (EBIT) was clearly positive, at EUR 47.34 million. The financial results improved on the comparable prior-year period, amounting to EUR -29.80 million (1-6/2008: EUR -33.02 million). The Group profit after income taxes was positive at EUR 13.36 million (1-6/2008: EUR 43.25 million) despite the negative non-cash effects.
- Stable value of conwert´s property portfolio, NAV at EUR 15.56/share At the end of the first half-year 2009, the value of conwert´s property portfolio amounted to EUR 2.52 billion (12/2008: EUR 2.54 billion). Business operations in the period under review focused on optimizing the property portfolio and selected property sales. No significant impairment losses (EUR 3.12 million or 0.1% of total property assets) were carried out in the first half of 2009, based on the valuations carried out by independent experts. Slight valuation gains in Austria were offset by minor impairment losses arising from the particular situation prevailing in Germany and CEE markets. Equity of conwert remained stable and totaled EUR 1,273 million as of June 30, 2009 (12/2008: EUR 1,274 million). The equity ratio increased slightly from 42% to 43%, which is related to the reduction in financing volume (buyback of convertible bonds and debt repayment within the context of property sales). Net assets per share (NAV) amounted to EUR 15.56, basically at the same level as at the end of 2008 (EUR 15.55). Cash and cash equivalents amounted to EUR 65.49 million as at June 30, 2009 (12/2008: EUR 69.92 million).
- Positive outlook for 2009
Despite the generally negative business environment prevailing at the present time, conwert expects an ongoing stable development in the residential property segment. Accordingly, conwert also expects the strong operating development to continue in the second half of the 2009 financial year, featuring increases in rental income and further property sales. In the rental business, growth will predominantly be organic, based on new rentals on a reduction in vacancies. In respect to the sale of properties, conwert will exceed the target volume of EUR 200 million for the year 2009. Attractive new mandates were recently won in the property service segment, thus serving as the basis for a stable development. Declines in the office and commercial property segment should be offset by new contracts with external customers in the residential property business. Moreover, the positive effects of the efficiency-enhancement programme will become more evident in the second half of 2009 than in the past reporting period.
In an unchanged market environment, conwert at present expects a positive operating development in the 2009 financial year and an increase in revenues, EBITDA and cash earnings (FFO) which will clearly exceed the performance achieved in 2008.
The interim report 1-6/2009 of conwert Immobilien Invest SE is available on the corporate Website www.conwert.at.
Earnings Indicators
1-6/2009 1-6/2008 Change
Rental income EUR mill. 80.34 72.25 11%
Proceeds on the
sale of properties EUR mill. 130.20 84.27 55%
Service revenues EUR mill. 17.37 17.47 -1%
Total revenues EUR mill. 227.91 174.00 31%
Earnings before interest, taxes,
depreciation (EBITDA) EUR mill. 55.58 48.03 16%
Earnings before interest
and tax (EBIT) EUR mill. 47.34 87.14 -46%
Funds from Operations (FFO)1) EUR mill. 44.44 25.87 72%
Net Operating Income (NOI) EUR mill. 47.67 42.08 13%
Cash Profit2) EUR mill. 44.34 25.35 75%
Basic earnings / share EUR 0.17 0.49 -66%
Diluted earnings / share EUR 0.17 0.47 -64%
Funds from Operations / share EUR 0.55 0.31 77%Balance Sheet Indicators
6/2009 12/2008 Change
Balance sheet total EUR mill. 2,976.78 3,016.21 -1%
Non-current loans and borrowings EUR mill. 970.34 1,011.13 -4%
Current loans and borrowings EUR mill. 327.59 321.90 2%
Equity EUR mill. 1,273.25 1,274.21 -0,1%
Equity ratio % 42.77 42.25 -
Gearing % 116.46 115.17 -
Book value / share EUR 15.56 15.55 1%Property Indicators
6/2009 12/2008 Change
Number of objects No. 1,699 1,710 1%
Rental units / Parking spaces No. 24,301/7,942 24,931/7,768 -3/2%
Total usable space sqm 1,990,205 2,035,421 -2%
Property assets EUR mill. 2,519.14 2,497.32 1%1) FFO: Earnings before tax (EBT) minus the net gain from fair value adjustments + Difference between cash gains on sale to 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, Johann Kowar, Chairman of the Executive Board,
T +43 / 1 / 521 45-200, E kowar@conwert.at
Peter Sidlo, Head of Corporate Communications - Investor Relations,
T +43 / 1 / 521 45-250, E sidlo@conwert.at,
Hochegger|Financials, Roland Mayrl, T +43 / 1 / 504 69 87-331,
E r.mayrl@hochegger.com
Branche: Real Estate
ISIN: AT0000697750
WKN: 069775
Index: WBI
Börsen: Wien / official dealing