S Immo: Good operational performance in the first quarter

  • Net income for the period increases by 143% compared to the previous year to reach 24.1 million euros
  • EPRA NAV increases to EUR 29.31 per share
  • EBIT up 12.0% to €20.4 million
  • Significant improvement in gross profit from hotel operations to 1.3 million euros
  • Revenues increase by around 33% to 57.0 million euros

The listed real estate investment company S IMMO AG again achieved a strong operational performance in the first quarter of 2022. Bruno Ettenauer, CEO of S IMMO AG, commented on the results: “Although we would have liked a better start year, the first quarter was relatively spared the effects of the war in Ukraine and the start of the reversal in interest rates. With sales up around 33%, we once again succeeded to bring the net result for the period to 24.1 m This corresponds to an increase of more than 140% compared to the previous year, which is explained not only by good operational performance, but also by the effects of valuation and non-recurring effects The current environment presents us with many challenges, but we believe that we are very well equipped thanks to our quality and diversified portfolio, our proven business model and our financial structure. extremely stable carrier.”

Marked increase in revenue and gross margin

In the first quarter, the operating result increased significantly and the gross profit increased by approximately 28% to 29.8 million euros. In conjunction with non-cash valuation effects in the financial and tax result, a significant increase in profit for the period was achieved for the first quarter. Revenues increased by around 33% to €57.0 million (Q1 2021: €43.0 million). This change is explained on the one hand by the increase in rental income and income from operating expenses and on the other hand by the increase in income from hotel operations.

Rental income increased by around 12% compared to the same period last year and amounted to EUR 35.8 million (Q1 2021: EUR 32.0 million). Property management expenses increased to €19.7 million (Q1 2021: €18.3 million), partly because the number of rental properties increased. Including the income from hotel operations, the gross profit therefore amounts to 29.8 million euros (Q1 2021: 23.2 million euros). This corresponds to an increase of approximately 28% compared to the same period of the previous year.

Significant improvement in hotel gross operating margin

Revenues from hotel management increased significantly compared to the first quarter of 2021 and amounted to 9.2 million euros (Q1 2021: 1.9 million euros). Gross profit from hotel activities improved to €1.3m (Q1 2021: -€1.3m), reflecting in particular the less severe restrictions related to the pandemic compared to the previous year.

Significantly higher net income for the period

Although the real estate valuation result amounted to -0.7 million EUR (Q1 2021: 2.5 million EUR) in the first quarter of 2022, the EBIT increased by approximately 12% to reach EUR 20.4 million (Q1 2021: EUR 18.2 million).

The financial result improved to a net result of 1.7 million euros (Q1 2021: -5.4 million euros), mainly due to positive valuations of derivatives. Due to a one-off effect in the area of ​​deferred taxes related to the eco-social tax reform, the total tax charge improved from -2.9 million EUR to 2.0 million EUR. As a result of these effects, the net income for the period increased by more than 140% to reach 24.1 million euros in the first quarter of 2022.

Capital market

In an environment dominated by uncertainties where the international indices were almost continuously in the red, the S IMMO share performed well and closed the first quarter at a price of 22.15 EUR and a performance since the start of the year of 1.84%. The EPRA NAV per share amounts to 29.31 per share at the end of the first quarter of 2022.

Focus on core business

Although geopolitical developments and events surrounding the COVID-19 pandemic are beyond the influence of S IMMO AG, they are closely monitored and the company’s strategies are adapted if necessary. After the successful sale of the 12.69% stake in IMMOFINANZ AG at the start of the year, S IMMO believes that it has a comfortable cash cushion for the coming months. The focus is again fully on the core business of acquiring, leasing and managing profitable properties in order to strengthen long-term cash flow. Along with the acquisition of other prominent properties, such as BudaPart Gate in Budapest at the end of 2021 and the planned closure of EXPO Business Park in Bucharest in the second quarter of 2022, the possibility of recognizing part of the strong valuation result in the German residential portfolio is under review. Herwig Teufelsdorfer, CIO of S IMMO AG, said: “The geographic diversification of our portfolio has proven to be extremely crisis-resistant, which is why we want to keep it in the same constellation as in the past. At the same time, we are considering investment opportunities in the Austrian market, which has been very stable lately.”

Update on CPI Property Group’s takeover bid

S IMMO’s shareholding was further strengthened in the first quarter of 2022. On April 14, 2022, CPI Property Group SA, which now holds 42.55% of the capital, requested the convening of an Extraordinary General Meeting to decide on removal of the right to vote. cap. With regard to the mandatory offer that CPI intends to announce to the shareholders of S IMMO after the registration of the amendment of the articles of association in the Austrian commercial register, we were able to negotiate an increase in the offer price from EUR 22.00 to EUR 23.50. We consider the granting of a right of withdrawal at the price of 23.50 euros as a fair consideration for the removal of the voting right ceiling. The proposal to remove the cap on voting rights will be voted on under item 1 of the agenda at the General Meeting of S IMMO on June 01, 2022.

Outlook for 2022

In addition to the ongoing pandemic, the first quarter of 2022 has been shaped by several events that will largely determine the course of the rest of the year, and at this point it remains to be seen how they will evolve going forward. . Friedrich Wachernig, COO of S IMMO AG, explained: “The war in Ukraine and the ongoing interest rate recovery since the first quarter have created a significantly more uncertain environment than at the end of 2021 in many respects. We have the advantage of being in a very stable position in terms of financing. The cash and cash equivalents generated by the profitable sale of IMMOFINANZ AG shares at the start of the year allow us to wait for favorable market phases and to exploit opportunities at the right time.”

Consolidated income statement for the period 01 January 2022 – 31 March 2022

in millions of EUR / fair value method

01-03/2022

01-03/2021

Revenue

57.0

43.0

of which rental income

35.8

32.0

of which revenue from operating expenses

12.0

9.1

of which hotel operating income

9.2

1.9

Other exploitation products

0.5

1.7

Expenses directly attributable to buildings

-19.7

-18.3

Hotel running costs

-8.0

-3.2

Gross profit

29.8

23.2

Proceeds from real estate disposals

0

0

Book value of assets sold

0

0

Capital gains or losses on real estate disposals

0

0

Management fees

-6.3

-5.1

EBITDA

23.5

18.1

Depreciation and amortization

-2.4

-2.4

Real estate valuation results

-0.7

2.5

Operating result (EBIT)

20.4

18.2

bottom line

1.7

-5.4

Net income before tax (EBT)

22.1

12.8

Income taxes

2.0

-2.9

Net income for the period

24.1

9.9

of which attributable to shareholders of the parent company

24.04

9.9

of which attributable to non-controlling interests

0.05

0.02

Earnings per share (in EUR)

0.34

0.14

Download P&L Q1 2022

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