EQS-News: IMMOFINANZ with strong performance in a challenging environment: FFO 1 improves by 15%, net profit reaches EUR 249 million

EQS-News: IMMOFINANZ AG / Key word(s): 9 Month figures/Real Estate
IMMOFINANZ with strong performance in a challenging environment: FFO 1
improves by 15%, net profit reaches EUR 249 million

23.11.2022 / 17:49 CET/CEST
The issuer is solely responsible for the content of this announcement.

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IMMOFINANZ with strong performance in a challenging environment: FFO 1
improves by 15%, net profit reaches EUR 249 million

• Like-for-like rental income increased by 7.9% in Q3
• Rental income in Q1–3 2022 stable year-on-year at EUR 216.9 million,
3.4% improvement after adjustment for non-recurring effect
• Leading position in retail park market further expanded to 122
locations through acquisitions and own development projects
• EPRA NTA per share improved to EUR 29.9
• Strong balance sheet with an equity ratio of 58.0% and net LTV of
33.7%

 

 
KEY FIGURES (IN MEUR) Q1–3 2022 Δ IN % Q1–3 2021
Rental income 216.9 0.2 216.4
Results of asset management 168.4 3.2 163.1
Results of property sales 5.0 -79.4 24.1
Results of property development -7.8 n. a. 24.1
Results of operations 117.8 -34.7 180.4
EBIT 186.6 -20.4 234.4
Financial results 122.4 33.3 91.8
Net profit 248.6 -15.9 295.7
FFO 1 (before tax) 115.9 15.4 100.5^1

 
IMMOFINANZ produced very solid results for the first three quarters of
2022 in spite of the challenging environment: Rental income reached a high
EUR 216.9 million, the results of asset management improved by 3.2% to
EUR 168.4 million, and sustainable FFO 1 from the standing investment
business (including the S IMMO dividend) rose by more than 15% to
EUR 115.9 million. Net profit equalled EUR 248.6 million. With an equity
ratio of 58.0% and conservative leverage with a net LTV of 33.7%,
IMMOFINANZ has a strong capital base.

“These excellent results for the first three quarters confirm the high
resilience and earning power of our portfolio. In a challenging
environment, we increased key indicators that included like-for-like
rental income, the results of asset management and FFO 1 and also
strengthened our balance sheet. We are making good progress with the
optimisation of our portfolio and cost structure and have strong brands in
the retail and office business which we intend to grow. The recent
acquisitions and development projects have extended our leading position
in the retail park market in Europe, and our portfolio now covers 122
locations. We believe IMMOFINANZ is well positioned to successfully
continue this value-creating course, also in difficult times,“ explained
Radka Doehring, Executive Chairwoman of IMMOFINANZ.

The attainment of majority control by the CPI Property Group triggered
several non-recurring effects during the reporting period. These effects
include, among others, higher costs in connection with the takeover offers
by the CPI Property Group and S IMMO, the related premature repayment of
corporate bonds due to the change of control, and the resignation of two
Executive Board members.

The results of operations totalled EUR 117.8 million and operating profit,
which was supported by positive property revaluations, amounted to
EUR 186.6 million. In total, IMMOFINANZ generated net profit of
EUR 248.6 million, or earnings per share^of EUR 1.82^2, in the first three
quarters of 2022.

Sustainable FFO 1 from the standing investment business (before tax) rose
by 15.4% to EUR 115.9 million in the first three quarters of 2022 (Q1–3
2021 adjusted: EUR 100.5 million^1). That represents FFO 1 per share of
EUR 0.85^3 (Q1–3 2021 adjusted: EUR 0.81^1, 3) despite being based on a
higher number of shares compared to the previous year.

Occupancy rate at high level

The value of the IMMOFINANZ portfolio rose by 6.5% to EUR 5.5 billion at
the end of September 2022 and covered 260 properties. Standing investments
represent the largest component at EUR 4.9 billion and 2.1 million sqm of
rentable space. The occupancy rate remained high at 94.0% (31 December
2021: 95.1%). The retail properties were practically fully rented at
98.3%. The standing investment portfolio had a gross return of 6.0% based
on IFRS rental income and a return of 6.4% based on invoiced rents. The
return was adjusted to reflect the acquisition of 36 retail properties in
the Czech Republic and Poland in September.

Equity ratio further strengthened

IMMOFINANZ had a robust balance sheet structure with a stronger equity
ratio of 58.0% (31 December 2021: 48.1%) and an improved net loan-to-value
ratio (net LTV) of 33.7% (31 December 2021: 36.7%). Cash and cash
equivalents amounted to EUR 241.7 million and the average financing costs
for financial liabilities (incl. derivatives) equalled 2.1%.

EPRA per share indicators improved

The EPRA NTA per share rose by 2.5% from EUR 29.19 at the end of December
2021 to EUR 29.92 as of 30 September 2022. The IFRS book value per share
improved to EUR 28.30 despite an increase in the number of shares
(31 December 2021: EUR 27.44).

Outlook

Based on the results for the first three quarters of 2022 and the retail
property acquisitions made at the end of September, IMMOFINANZ expects
FFO 1 before tax (including S IMMO dividend) of approximately
EUR 135 million for the full 2022 financial year.

 Results in detail

Rental income was stable in year-on-year comparison at EUR 216.9 million
in the first three quarters of 2022 (Q1–3 2021: EUR 216.4 million).
However, the first three quarters of 2021 were positively influenced by a
non-recurring compensation payment of EUR 6.7 million from a major tenant
for a pandemic-related reduction in space. After an adjustment for this
non-recurring effect, rental income rose by 3.4%. The increase was
supported by the sound development of like-for-like rental income, the
purchase of a STOP SHOP retail park in Italy, and the completion of
development projects which more than offset the sale of properties.
Like-for-like rental income (adjusted for acquisitions, sales and
completions) rose by a solid 7.9% year-on-year in the third quarter of
2022, while a comparison of the first three quarters of 2022 with the
previous year period shows a plus of 6.6%.

Property expenses declined by 13.7% to EUR -37.5 million, above all due to
a substantial reduction in the write-off of rents receivable included in
this position to EUR -1.7 million (Q1–3 2021: EUR -10.9 million). These
write-offs represented support by IMMOFINANZ for its tenants during the
pandemic-related lockdown periods in 2020 and 2021. Maintenance costs
totalled EUR -13.0 million for the reporting period (Q1-3 2021:
EUR -8.5 million). The results of asset management rose by 3.2% to
EUR 168.4 million (Q1–3 2021: EUR 163.1 million).

The results of property sales amounted to EUR 5.0 million (Q1–3 2021:
EUR 24.1 million) and were influenced, above all, by the full write-off of
a EUR -12.9 million purchase price receivable from Russia during the
second quarter. This receivable originated from the sale of the Russian
portfolio in 2017 and was scheduled for settlement in the first half of
2022. As a consequence of the war in Ukraine and the related sanctions
against the Russian Federation together with the accompanying effects – in
particular, the payment restrictions imposed by Russia – management
classified this receivable as uncollectible. IMMOFINANZ holds no other
receivables or liabilities from the sale of the Russian portfolio and is
currently reviewing all legal options to assert this claim. Property sales
totalled EUR 100.2 million and consisted primarily of an office building
in Prague and non-core land in Turkey.

The results of property development equalled EUR -7.8 million (Q1–3 2021:
EUR 24.1 million) and reflect the increase in construction costs for
individual projects, which resulted from changes in the operating
environment.

Other operating expenses increased to EUR -50.9 million as a result of
non-recurring effects (Q1–3 2021: EUR -32.3 million). These expenses
generally involved consulting fees related to the takeover offers for
IMMOFINANZ by the CPI Property Group and S IMMO, expenses due to the
resignation of Dietmar Reindl and Stefan Schönauer from the Executive
Board, and digitalisation projects. The results of operations amounted to
EUR 117.8 million (Q1–3 2021: EUR 180.4 million).

Results from the revaluation of standing investments totalled
EUR 68.8 million (Q1–3 2021: EUR 54.0 million). Retail properties were
responsible for EUR 49.8 million of the value appreciation, which covered
STOP SHOPs as well as VIVO! shopping centers and reflected the
pandemic-related improvement in the market environment. Revaluations in
the standing office investments amounted to EUR 27.4 million and were
supported by positive effects at buildings in Warsaw, Vienna and Prague.
The write-downs of EUR -8.3 million involved miscellaneous properties.
Operating profit (EBIT) equalled EUR 186.6 million (Q1–3 2021:
EUR 234.4 million).

Financing costs declined by 8.7% to EUR -56.5 million (Q1–3 2021:
EUR -61.9 million). The substantial year-on-year increase in other
financial results to EUR 139.7 million (Q1–3 2021: EUR 20.3 million) was
based primarily on the positive valuation of interest rate derivatives
(EUR 147.1 million) in line with the upturn in long-term interest rates
and demonstrates the Group’s effective hedging policy. These factors were
contrasted by costs of EUR -5.6 million for the repurchase of corporate
bonds at 101% of the nominal value as a consequence of the change of
control.

The share of results from equity-accounted investments totalled
EUR 37.0 million for the reporting period. In the first three quarters of
the previous year, this position had been influenced by the strong
positive revaluation of the S IMMO investment (Q1–3 2021:
EUR 131.5 million). The S IMMO investment was responsible for a
proportional earnings share of EUR 33.1 million in the first three
quarters of 2022 (Q1–3 2021: EUR 128.0 million). Financial results
amounted to EUR 122.4 million in the first three quarters of 2022 (Q1–3
2021: EUR 91.8 million).

Profit before tax totalled EUR 308.9 million (Q1–3 2021:
EUR 326.2 million). Income taxes rose to EUR -60.3 million (Q1–3 2021:
EUR -30.5 million), above all due to the increase in deferred tax expenses
that resulted from the positive valuation of interest rate derivatives.
Net profit equalled EUR 248.6 million (Q1–3 2021: EUR 295.7 million) and
represents earnings per share of EUR 1.82^2 (Q1–3 2021: EUR 2.20^2).

The interim financial report by IMMOFINANZ AG for the first three quarters
of 2022 as of 30 September 2022 will be available on the company’s website
under [1] https://immofinanz.com/en/investor-relations/financial-reports
starting on 24 November 2022.

______________________________

1 To improve comparability, the 2021 dividend from S IMMO was adjusted to
show an assumed receipt of EUR 9.7 million in the first three quarters of
2021 instead of the actual payment in the fourth quarter 2021.

2 Earnings per share, number of shares included for Q1–3 2022:
136,493,246; number of shares included for Q1–3 2021: 137,196,443

3 FFO 1 per share, number of shares included for Q1–3 2022: 136,493,246;
number of shares included for Q1–3 2021: 123,293,780

On IMMOFINANZ

IMMOFINANZ is a commercial real estate group whose activities are focused
on the office and retail segments of eight core markets in Europe:
Austria, Germany, Poland, Czech Republic, Slovakia, Hungary, Romania and
the Adriatic region. The core business covers the management and
development of properties, whereby the STOP SHOP (retail), VIVO! (retail)
and myhive (office) brands represent strong focal points that stand for
quality and service. The real estate portfolio has a value of
approximately EUR 5.5 billion and covers 260 properties. IMMOFINANZ is
listed on the stock exchanges in Vienna (leading ATX index) and Warsaw.
Further information under: [2] https://www.immofinanz.com

For additional information contact:

Bettina Schragl
Head of Corporate Communications and Investor Relations
IMMOFINANZ
T +43 (0)1 88 090 2290
M +43 (0)699 1685 7290
[3]communications@immofinanz.com

[4]investor@immofinanz.com
1100 Vienna, Wienerbergstraße 9, Austria
www.immofinanz.com

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23.11.2022 CET/CEST This Corporate News was distributed by EQS Group AG.
www.eqs.com

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Language: English
Company: IMMOFINANZ AG
Wienerbergstraße 9
1100 Vienna
Austria
Phone: +43 (0) 1 88090 – 2290
Fax: +43 (0) 1 88090 – 8290
E-mail: investor@immofinanz.com
Internet: http://www.immofinanz.com
ISIN: AT0000A21KS2
WKN: A2JN9W
Listed: Regulated Unofficial Market in Berlin, Frankfurt, Munich,
Stuttgart; Warschau, Vienna Stock Exchange (Official Market)
EQS News ID: 1495055

 
End of News EQS News Service

1495055  23.11.2022 CET/CEST

References

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3. communications@immofinanz.com
4. investor@immofinanz.com

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