Immofinanz: Increase in net profit for the first half-year

Immofinanz generated net profit of 132.2 million Euro in the first half of the 2015/16 financial year (H1 2014-15: 3.4 million Euro), according to the company official release.

2015-12-18 17:16:17

This increase was supported primarily by positive effects from property valuation. The results of operations totaled EUR 68.3 million (H1 2014/15: 155.3 million Euro) and resulted from a decline in rental income to 160.3 million Euro (H1 2014/15: 213.2 million Euro) that was caused by temporary rent reductions in Moscow and the planned sale of properties. Another contributing factor was the increase in other operating expenses to -53.5 million Euro (H1 2014/15:-27.4 million Euro ) as a non-recurring effect for the settlement of legal proceedings by investors.

"Immofinanz results of operations for the first half of 2015/16 were influenced, above all, by two factors: on the one hand, we have the continuing tense political and economic situation in Russia, which has led us to grant temporary rent reductions to the tenants in our Moscow shopping centers. We are reviewing and renegotiating these agreements on a regular basis, but the situation remains challenging and estimates for the future course of the Russian economy are still connected with considerable uncertainty. On the other hand, we addressed the difficult and prolonged issue of investors lawsuits in recent months and achieved an out-of-court settlement. That creates legal security and puts an end to the uncertainty surrounding the length of the court proceedings and the related costs", explained Oliver Schumy, CEO of IMMOFINANZ. Most of the expenses connected with the termination of the legal proceedings initiated by investors are covered by provisions in the consolidated financial statements of the company. The difference of approx. EUR 28.1 million was recognised as an expense in the financial statements for the first half of the 2015/16 financial year.

Adjusted rental income fell by 5.9 per cent from the first quarter of 2015/16 to 70.1 million Euro in the second quarter, but was generally stable excluding Moscow. The occupancy rate in the standing investment portfolio was 82.8 per cent. "Our focus for the management of the standing investments is unchanged – we want to improve our operating performance and raise the occupancy rate", emphasized CEO Schumy. "In the office segment, our investments are designed to further increase the quality of our offering in order to meet the rising demands in our East European core markets. In the retail sector, we are expanding our market position through the roll-out of our successful STOP.SHOP. and VIVO! brands."

With the sale of the entire logistics portfolio, Immofinanz has also taken an important step to further strengthen its positioning as a leading commercial property company for the office and retail sectors. "The liquidity released by the sale will be invested in the expansion of our portfolio in Germany, where we recently announced another milestone project with the development of the new corporate headquarters for trivago in the Dusseldorf Medienhafen", added CEO Schumy.

The Immofinanz properties in Romania represent 14.6 per cent of the company total portfolio, including 73 properties (17 standing investments, 11 developments and 45 pipeline projects) with a carrying amount of 907.1 million Euro (649.2 million Euro standing, 28.3 million Euro developments, 229.6 million Euro pipeline). The expected fair value after completion of the current Group's development projects in Romania amounts to 117.7 million Euro.

In the first half of the 2015/16 financial year, rental income in Romania presents itself stable and totals 22.2 million Euro (previous period: 22.5 million Euro), which accounts for 13.9 per cent of the Group's total rental income. Romanian results of operations amount to 21.8 million Euro and represent 31.9 per cent of Immofinanz total results of operations. Operating profit (EBIT) in Romania amounts to 34.8 million Euro.