CA Immo achieves FFO I annual target 2022 and increases net asset value
- Increased rental income (+6% to €213.8 m) despite property disposals reflects recent portfolio additions, higher occupancy rate and rent indexations in the portfolio
- Net profit of €75.5 m down 84% on previous year, mainly burdened by the negative revaluation result of €–94.1 m
- Recurring Earnings (FFO I) almost stable at €125.3 m (–2% yoy), annual target of >€125 m achieved
- Increase in net asset value: IFRS NAV per share up 3% to €33.71 (2021: €32.68)
- Continuous dividend policy: Proposal of a dividend of € 1.00 per share for the financial year 2022.The payout amount exceeding the base target of 70% of FFO I reflects the profitable sales activity within the strategic capital rotation programme.
Vienna, March 22, 2023. CA Immo, a real estate group specializing in high-quality office space, successfully held its ground in a challenging market environment in the 2022 business year. Rental income increased by 6.3% to €213.8 m, recurring earnings (FFO I) of €125.3 m exceeded the annual target of > €125 m. Recent portfolio additions, rent indexations and higher portfolio occupancy more than offset the effects of portfolio disposals. At €75.5 m, consolidated net income was 84% below the record figure of the previous year and was burdened, among other things, by the negative revaluation result (€–94.1 m after €537.4 m in 2021). Based on this positive operating result, CA Immo will put a dividend distribution of €1.00 per share to the vote at the Annual General Meeting to be held on May 4, 2023.
Silvia Schmitten-Walgenbach, CEO of CA Immo: "We made good progress in the consistent implementation of our strategic capital rotation programme in the previous year. Despite the increasingly difficult market environment, we were able to successfully conclude the announced sale of our Romanian platform, among other things. At the same time, we have set the course for future rental growth – especially through our value-creating development activity in Germany. Our two construction projects completed in 2022 for our own portfolio – the ONE office and hotel high-rise in Frankfurt and the Grasblau office building in Berlin – will already strengthen rental income by a total of around €27 m per year when fully let. We are thus continuing to focus on our core market Germany and at the same time enhancing the quality of the portfolio and significantly improving our liquidity position. This makes CA Immo even more resilient in times when the general conditions for the real estate sector are changing rapidly and stability and quality are more than ever decisive success factors."
Strategic capital rotation programme to further improve portfolio quality
The company made important progress in implementing its strategic capital rotation programme in 2022. In total, properties worth more than €530 m were successfully placed on the market; the sales prices achieved were on average significantly above book value. These sales were offset by the purchase of a high-quality office building in Düsseldorf and the completion of two German office projects with a total investment volume of around €516 m, which are now part of the CA Immo investment portfolio.
Thanks to this active portfolio management, CA Immo was able to further improve the quality, location, age structure, and thus the overall resilience and sustainability of the portfolio last year and significantly strengthen its liquidity position. The company is thus very well positioned and has significantly increased its stability and resilience as well as its further options for action in light of a more difficult market environment.
Annual result 2022 1)
CA Immo recorded a 6.3% increase in rental income to € 213.8 m in 2022. This development is mainly related to portfolio additions and rising rental income from the investment portfolio – among other things due to the higher occupancy rate and rent indexations, which compensated for portfolio sales.
Indirect expenses decreased significantly by 15.2% to €–47.5 m (2021: €–56.0 m). The decline is reflected in almost all expense types, which is due to the optimisation of business activities and the focus on core markets.
Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to €149.5 m, down 21.0% on the previous year's figure of €189.4 m. This decline compared to the previous year is mainly due to an exceptionally high sales result in the previous year.
In total, the revaluation result in 2022 amounted to €–94.1 m and was thus significantly lower than in the previous year (2021: €537.4 m). The result reflects the significantly changed market environment for office properties compared with the previous year. The economic consequences of the Covid-19 pandemic and the effects of the war in Ukraine led to higher inflation and – related to this – significantly higher interest rates and lower economic growth. This has impacted property markets in the form of lower demand for rental space, declining transaction volumes, and cautious forecasts, which led to declining property valuations by the external appraisers in the fourth quarter of 2022 as part of the semi-annual valuation process.
Earnings before interest and taxes (EBIT) totaled €74.4 m and therefore is significantly reduced to the previous year´s figure of €725.2 m (–89.7%), particularly due to the negative revaluation result.
The financial result for 2022 was €43.5 m, compared to €–74.4 m last year. This increase is mainly attributable to a positive result from derivatives amounting to €90.3 m (2021: €–25.9 m).
At €75.5 m, consolidated net income for the period was –84.3% below the previous year's figure of €479.8 m. Earnings per share amounted to €0.75 (2021: €4.89 per share).
Property assets of €5.9 bn
As a result of the active portfolio management and high sales volume, the value of total property assets decreased by 5% during the year to €5.9 bn (compared with €6.3 bn in the previous year). The overall portfolio consists of investment properties with a book value of €5.0 bn (84%), properties under development accounting for €0.6 bn (10%) and short-term real estate assets worth €335.1 m (6%). The largest regional segment is Germany, which accounts for 66% of the total portfolio, followed by CEE (26%) and Austria (8%). The occupancy rate of the investment portfolio increased slightly to around 89.9% (December 31, 2021: 88.9%).
Strong balance sheet and rising asset values
In view of its long-standing positive business development and conservative balance sheet and financing policy, CA Immo has an extremely robust balance sheet with a solid equity ratio of 46.8% (2021: 46.3%), a net LTV of 32.5% (2021: 31.1%) and high cash reserves (cash and cash equivalents: €823.8 m).
The net asset value (IFRS NAV) per share was €33.71 as of December 31, 2022, compared to €32.68 at year-end 2021 – an increase of 3.2%. EPRA Net Tangible Assets (NTA) per share stood at €40.31 as of the reporting date, slightly above the 2021 value of €40.05.
During 2022, the real estate markets were increasingly negatively affected by general economic and political developments. In particular, the rapid rise in interest rates due to high inflation poses challenges for the real estate industry, which are reflected among other things in a significant weakening of the real estate investment markets. This prevailing uncertainty and volatility will continue to shape the real estate sector in 2023. In view of these fundamental macroeconomic changes, CA Immo will continue to focus on securing or increasing its competitiveness and resilience. To this end, the company is focusing on three main areas: increasing portfolio quality and focusing on core markets through the sale of non-strategic properties, accelerating the transformation into a sustainable company, and increasing efficiency at all levels.
Annual target 2023
For the 2023 financial year, an EBITDA of over €200 m is expected on the basis of profitable sales as part of the strategic capital rotation programme, which would result in a significant increase compared to the figure for 2022 (€149.5 m). 2) The annual target for the recurring result (FFO I) is expected to be announced as part of the first quarter reporting in May 2023.
The annual report 2022 of CA Immobilien Anlagen AG is available at: https://www.caimmo.com/en/investor-relations/financial-reports/.
1) The Romanian portfolio was sold in November 2022. The earnings (after taxes) of the Romanian portfolio in 2022 as well as the comparative figures are presented as a discontinued operation in a separate line in the consolidated income statement as of December 31, 2022. Romanian earnings contributions are therefore included in the net profit, but not in the remaining income statement figures. The comparative figures for 2021 have been adjusted accordingly. Balance sheet figures as at 31.12.2021 are shown including Romania.
2) Based on transactions signed and closed to date.