In 2012/13 Immofinanz Group confirmed the positive operating trend from the past year despite weaker growth in the core markets. Results of operations for the 2012/13 financial year totalled € 542.1 million, which represents an increase of 15.3% or € 71.9 million.
Rental income rose substantially year-on-year by € 70.2 million or 12.0%. Revenues rose by 11.2% to € 869.2 million in 2012/13. Results of asset management were 15.1% higher at € 513.0 million. Results of property sales rose by an impressive 108.3% year-on-year to € 110.8 million. Results of property development amounted to € -18.4 million (2011/12: € 30.1 million), above all due to delays in the Goodzone project in Russia.
“The 2012/13 financial year was characterised by a concentration on the operating business – and we generated more than solid growth rates. Gross cash flow rose by 8.0% to € 408.5 million, and sustainable cash flow (FFO) increased by 27.1% to € 341.0 million or from € 0.27 to € 0.33 per share“, commented Eduard Zehetner, CEO of Immofinanz Group. “The decline of € 160.4 million in net profit resulted primarily from lower positive effects from property valuation which, after an adjustment for foreign exchange effects, fell by € 170.7 million to € 37.9 million“, added Zehetner.
“Our real estate machine gained significant speed during the past year. This is true, above all, for our sales activities, where we set a new record since the beginning of our sales programme with a volume of approx. € 661.3 million. With these results, we exceeded our target of € 1.5 billion by € 153.2 million or 10.2% after three years. This figure does not include properties with a carrying value of € 583.4 million that were classified as held for sale on the balance sheet as of 30 April 2013. Many of these transactions have closed or the contract has already been signed.“
Negative other valuation results of € -33.2 million (incl. foreign exchange effects) led to a decline in operating profit to € 508.9 million (2011/12: € 692.9 million). This decline is attributable to the year-on-year drop of approx. € 170.7 million in positive effects from the foreign exchange adjusted revaluation of properties (from € 208.7 million to € 37.9 million) and a negative non-recurring effect (€ -106.4 million) from the adjustment of the purchase price liability for the acquisition of the Golden Babylon Rostokino shopping center in Moscow. The final purchase price for this shopping center, which was opened together with a joint venture partner in November 2009 and taken over in full during May 2012, is dependent on the net operating income (NOI) generated in the 2013 calendar year. This NOI has risen significantly in recent months because the Golden Babylon Rostokino is almost fully rented. Consequently, the fair value of the property rose by € 135.0 million in 2012/13 and will offset the additional costs from the purchase price adjustment.
Net profit for the 2012/13 financial year equalled € 110.8 million (2011/12: € 271.2 million). The substantial increase in the tax rate to 43.2% (2011/12: 14.9%) resulted primarily from unusually high, non-recurring non-cash effects related to deferred taxes.
Sustainable cash flow per share rose from € 0.27 in 2011/12 to € 0.33 for the reporting year and reflects the sound improvement in the development of the operating business.
The € 0.15 dividend for the 2012/13 financial year is confirmed, subject to the approval of the annual general meeting on 2 October 2013. The net asset value (NAV) per share rose by 4.9% to € 5.51.
The most important goals for the 2013/14 financial year are to significantly increase development activities and generate sound contributions to earnings, but to also create the requirements to raise the real estate machine to a new activity level. “For 2014 we plan to separate the residential property management and development activities in Germany and Austria that are bundled in Buwog from Immofinanz Group and transfer this business to a separate company. This will take place through an initial public offering (IPO) or a spin-off, depending on the relevant market environment at that time. Both options will be designed to establish a fair balance between the interests of the company and shareholders, above all with a view to the potential effects of the individual alternatives on liquidity“, indicated Eduard Zehetner.
The remaining commercial part of Immofinanz Group will concentrate on the highly profitable retail, office and logistics market segments especially in Central and Eastern Eope. Activities will be focused on real estate development, including the development of condominium apartments for sale in Central and Eastern Europe.