The listed real estate investment company S IMMO AG ended the first half of 2021 on a very positive note with a net income for the period of €137.3 million (HY 2020 €16.1 million). Bruno Ettenauer, CEO of S IMMO AG, commented: “The current half-year results provide impressive confirmation of S IMMO’s growth potential. Despite the continuing challenges of the pandemic, we were able to generate a strong operating result and marked value increases in the existing portfolio. The highly successful sale of the CA Immo shares in July also represents an important step towards increasing cash flow on a long-term basis.”
Increase in revenues and gross profit
In the first half of the year, total revenues increased year on year from €87.8 million to €91.1 million. This improvement can be attributed to acquisitions and to careful operational management of the existing portfolio. While rental income improved from €60.6 million to €63.9 million, the hotel GOP improved to €2.2 million (HY 2020: €0.1 million). In total, gross profit improved from €45.7 million to €53.2 million.
According to Friedrich Wachernig, Member of S IMMO AG’s Management Board, “The past few months have generally shown that the portfolio of S IMMO, which is diversified by region and type of use, has proved its resilience in times of crisis. Particularly the operational efforts and the intensive work on our properties and with our tenants are having a decisive positive impact. The high quality of our existing properties is a key success factor.”
Increase in EBITDA, significant positive valuation result
Management expenses in the first half of the year included a range of non-recurring effects, among other things the expenses in connection with the unsuccessful takeover offer by IMMOFINANZ AG, and amounted to €13.6 million (HY 2020: €9.6 million). Despite these effects, EBITDA rose by roughly 9.6 percent to €39.6 million (HY 2020: €36.1 million).
The result from property valuation returned to the level seen in 2019, coming in at a very satisfying amount of €131.5 million (HY 2020: €10.2 million). Around 72 percent of the value increases were attributable to the German portfolio, around 22 percent to Austrian properties and roughly 6 percent to the CEE segment. Consequently, EBIT also increased significantly to €166.3 million (HY 2020: €41.8 million).
Significant increase in net income for the period and earnings per share
The financial result also improved considerably year-on-year to €-2.2 million as of 30 June 2021 (HY 2020: €-21.8 million). This substantial increase is mainly attributable to dividend income for the investment in the CA Immobilien Anlagen AG shares, which was not paid until the second half of the year in 2020, as well as to significantly improved derivative valuations, positive exchange rate effects and higher results from shares measured according to the equity method. Tax expenses mainly reflect the increase in deferred taxes in connection with the positive property valuation. Overall, net income for the period increased more than eightfold year-on-year to €137.3 million (HY 2020: €16.1 million). Earnings per share rose to €1.93 (HY 2020: €0.22).
Capital market
The S IMMO share turned in a year-to-date performance of 19.1 percent in the first half of the year. The analyst firms’ average price target is €24.08 as of 23 August 2021.
Outlook for 2021
In July 2021, S IMMO AG submitted its shares in CA Immobilien Anlagen AG to Starwood Capital Group’s takeover offer and thus sold them at a price of €37 per share. The sale generated a cash inflow of roughly €230 million (before taxes) and a disposal gain of almost €100 million throughout the investment period. These funds are now to be used for direct property investments.
Herwig Teufelsdorfer, Member of S IMMO AG’s Management Board, noted: “We are currently examining acquisition options very intensively – particularly in Budapest and Bucharest, there are a number of exciting investment opportunities for which we are holding specific discussions. The goal is to acquire properties that will immediately generate cash flow and make a valuable contribution to earnings. This will ensure our company’s ability to pay dividends and form the basis for further growth.”
