S Immo : Q3 results again impressively demonstrate operational strength

• Rental income rises to EUR 97.3m
• EBIT up 270% to nearly EUR 200m
• Net income for the period increases sevenfold to EUR 160.5m
• EPRA NAV per share at EUR 28.28 as of 30 September 2021

The listed real estate investment company S IMMO AG once again reports strong results as of the end of the third quarter, with net income for the period of EUR 160.5m (Q3 2020: EUR 22.3m). Bruno Ettenauer, CEO of S IMMO AG, commented: "The figures as of 30 September 2021 impressively demonstrate our operational strength and the high quality of our portfolio. Particularly against the backdrop of the ongoing pandemic, it makes us proud that some of our key figures have already improved substantially again and are above pre-crisis levels."

Strong operating result

Rental income rose by around 6.3% over the prior-year period and came to EUR 97.3m (Q3 2020: EUR 91.5m). Higher rental income and the improved gross profit from hotel operations meant that gross profit rose significantly to EUR 81.1m (Q3 2020: EUR 71.5m). EBITDA came to EUR 61.5m (Q3 2020: EUR 57.3m), which represents an increase of 7.3% versus the prior-year period.

Property valuation and strong net income for the period

The result from property valuation improved significantly year-on-year and amounted to EUR 145.3m (Q3 2020: EUR 3.4m). The vast majority of valuations related to the Germany segment (74.5%), followed by Austria (19.9%) and CEE (5.6%). In conjunction with the good operating performance, the result from property valuations led to an increase in EBIT of roughly 270%, from EUR 53.9m to EUR 199.6m.

The financial result also improved significantly year-on-year to EUR -8.3m as of 30 September 2021 (Q3 2020: EUR -28.4m). This can mainly be attributed to significantly improved derivative valuations, positive exchange rate effects and better results from shares measured according to the equity method. In addition, dividend income for the shares held by S IMMO AG in IMMOFINANZ AG was received after the end of the quarter and will have a positive impact on the results for the year as a whole in annual comparison due to the lack of a dividend in the prior year.

Overall, net income for the period increased more than sevenfold year-on-year to EUR 160.5m (Q3 2020: EUR 22.3m). Earnings per share amounted to EUR 2.25 (Q3 2020: EUR 0.31).

Capital market

The Vienna Stock Exchange had a very successful third quarter, as the ATX and the sector index IATX were both clearly in positive territory as of 30 September 2021, with year-to-date performance of 31.6% and 19.1%, respectively. The S IMMO share price increased by 17.7% from the beginning of the year and stood at EUR 19.96 at the end of the quarter. In the weeks that followed, the S IMMO share was back on a good growth path, before the prospect of a fourth lockdown once again dragged down prices on the Vienna Stock Exchange. EPRA NAV per share reached a record level of EUR 28.28, and EPRA NTA came to EUR 27.98.

Investments

In the summer of 2021, S IMMO submitted its shares in CA Immobilien Anlagen AG to Starwood Capital Group's takeover offer and sold them at a price of EUR 37 per share. The generated proceeds of more than EUR 230m before taxes are to be reinvested in cash-flowing properties, among other things, and will thus further strengthen the company's key operating figures such as FFO 1 as well as its long-term ability to pay dividends. In this context, the purchase agreement for the acquisition of BudaPart Gate, an office property in Budapest, was signed at the beginning of November. According to Herwig Teufelsdorfer, CIO of S IMMO AG, "This property, which fully complies with ESG regulations, is fully let, has around 20,000 m² of office space and generates annual rental income of around EUR 4m. The high occupancy rate and the profitability of the property will have an immediate positive impact on our cash flow from next year. I am extremely pleased that we are adding a top property with a high level of quality to our Hungarian portfolio with this acquisition. We are also currently involved in concrete talks about exciting investment opportunities."

Outlook

The goal for 2022 is to achieve further growth. The current focus is on the CEE region, but the company is also actively looking for attractive acquisition opportunities in Germany and Austria.

Friedrich Wachernig, COO of S IMMO AG, is optimistic: "We are very confident that - although we are currently in the midst of the feared fourth wave of the COVID-19 pandemic - this global health crisis will be over next year through increasing vaccination coverage, the further development of medicines and other prevention strategies. S IMMO has proven to be very crisis-resistant in the past year and a half, as is impressively shown by our Q3 results. Acquisitions, project developments and the ongoing intensive work on our portfolio form the basis for continued, long-term growth."

Consolidated income statement for the period 01 January 2021-30 September 2021

in EUR millions / fair value method

	01-09/2021	01-09/2020
Revenues	142.9	129.9
thereof rental income	97.3	91.5
thereof revenues from operating costs	25.8	23.7
thereof revenues from hotel operations	19.9	14.7
Other operating income	2.3	1.9
Property operating expenses	-49.0	-45.6
Hotel operating expenses	-15.2	-14.8
Gross profit	81.1	71.5
Income from property disposals	4.3	45.1
Book value of disposed properties	-4.3	-45.1
Result from property disposals	0.0	0.0
Management expenses	-19.6	-14.2
EBITDA	61.5	57.3
Depreciation and amortisation	-7.2	-6.9
Results from property valuation	145.3	3.4
Operating result (EBIT)	199.6	53.9
Financial result	-8.3	-28.4
Earnings before tax (EBT)	191.3	25.5
Taxes on income	-30.8	-3.1
Consolidated net reslut for the period	160.5	22.3
of which attributable to shareholders in parent company	159.9	22.0
of which attributable to non-controlling interests	0.6	0.3
Earnings per share (in EUR)	2.25	0.31

Download P&L Q3 2021