U.S. Markets open in 5 hrs 59 mins

Edited Transcript of IIA.AT earnings conference call or presentation 28-Aug-19 10:59am GMT

Half Year 2019 Immofinanz AG Pre-Recorded Earnings Presentation

Wien Sep 13, 2019 (Thomson StreetEvents) -- Edited Transcript of Immofinanz AG earnings conference call or presentation Wednesday, August 28, 2019 at 10:59:00am GMT

TEXT version of Transcript


Corporate Participants


* Oliver Schumy

IMMOFINANZ AG - CEO & Chairman of the Management Board




Oliver Schumy, IMMOFINANZ AG - CEO & Chairman of the Management Board [1]


Ladies and gentlemen, it is my pleasure to update you on the successful first half of the financial year for IMMOFINANZ.

These are the key figures. Our occupancy rate remained stable at a very high level of around 95%, which also puts us among the market leaders internationally. Our rental income increased by almost 11% in total to EUR 131.8 million. Adjusted for acquisitions, sales and completions, it rose by more than 3% in the second quarter. This is also a very encouraging increase which was driven by higher rents.

The results of asset management, our most important operational earnings pillar, improved by more than 6% to EUR 101 million. Operating profit came to EUR 203.4 million, more than 60% above the level of the prior year. Our properties have increased significantly in value, which is reflected in the revaluation results.

Overall, the net profit for the period more than doubled to approximately EUR 185 million. The financial results also benefited from the good performance of our S IMMO holding. We are very pleased with this as it shows that we made the right investment. The development of our sustainable funds from operations, a key profitability indicator in our sector, also underlines our improved earnings power. FFO 1 from the standing investment business rose by more than 20% to EUR 59 million. Furthermore, we can also highlight a very solid financial profile. Our cash and cash equivalents amounted to approximately EUR 560 million at the end of June. And our gearing based on net loan-to-value is very robust at under 40%, and we are further reducing our financing costs, which now come to 1.99%, including hedging expenses. So you can see we are very well underway.

This is also reflected by the investment-grade rating assigned to IMMOFINANZ at the start of the year by the international rating agency, Standard & Poor's global ratings. The rating is BBB- and carries a stable outlook. This is for the first time in our company's history and an important sign of quality.

Let's now take a look at our portfolio. This grew to over EUR 4.5 billion in the first half of the year and now comprises 214 properties. The largest part, around 90% or EUR 4.1 billion, is made up of standing investments. The gross return on this is 6.3%, a solid level by international standards.

In recent months, we have also once again increased the size of our standing investment portfolio through project completions. In our Düsseldorf office property FLOAT, which comprises around 30,000 square meters, the tenant, Uniper, has already fully moved in. We have also completed the expansion of our STOP SHOP in the city of Trebíc in the Czech Republic. The retail park now has a rentable space of almost 22,000 square meters, making this our largest STOP SHOP. And very importantly, the property is fully let.

As announced, we have also significantly strengthened our position as one of the leading providers of premium office solutions through acquisitions. In January, we purchased a 50% share in the Na Príkope 14 building in the center of Prague and are now, as a result, the sole owner of this fully let property in a top city center location.

In July, we took 2 further important steps in terms of growth. With the Warsaw Spire, we now own the tallest office tower in Warsaw. This is an ideal combination of top quality with many distinguished tenants and optimal infrastructure. The property has a value of EUR 386 million, and the expected rental income is approximately EUR 19.6 million per annum. This is equivalent to a rental return of 5.1%, which is a very good level for Warsaw and for this premium property. In Prague, we have added Palmovka Open Park, comprising almost 26,000 square meters to our office portfolio. This first-class office location will contribute around EUR 4.4 million in annual rental income. In line with our commitment, we have also once again strengthened our position as a leading retail park operator in Europe and acquired 6 fully let sites in Slovenia and Poland. Including the recently opened STOP SHOP in the Serbian city of Sremska Mitrovica and 2 further projects in Poland, we have reached our goal for 2019 of expanding the STOP SHOP portfolio substantially to around 90 locations. With these purchases in the office and retail sectors, we are heading towards a property portfolio well of around EUR 5 billion.

We have taken numerous steps to further strengthen our sustainable earnings power. Against this background and in view of the very good performance in the first half of the year, we are raising our outlook for FFO 1 before tax for the 2019 financial year and now expect more than EUR 115 million. On a year-on-year basis, this would be respectable growth of over 35%, so we are making very good progress.