CA Immo continues earnings and portfolio growth in Q1 2021
- Recurring earnings (FFO I) of €31.4 m (€0.34 per share) 5% above the previous year's value
- Net rental income increased by 2% to €50.5 m (31.3.2020: €49.6 m)
- Operating result (EBITDA) of €43.8 m up 13% on the previous year's figure
- Positive revaluation result of €63.3 m reflects, among other things, the profitable development activities in Germany (31.3.2020: €–11.1 m)
- Strong consolidated net profit of €41.4 m, up 24% year-on-year (31.3.2020: €33.5 m)
- Net asset value EPRA NTA per share at €41.14 after €40.09 as of 31.12.2020 (+3%)
- Annual target for 2021 envisages sustainable earnings (FFO I) of >€128 m
Supported by sustained portfolio growth in 2020 and the completion of profitable property sales and successful project pre-letting in the first quarter of 2021, CA Immo is starting 2021 with an extremely positive first quarterly result. All key financial figures were increased compared to the previous year, and the value of property assets rose to €5.7 bn. The outlook and annual targets are correspondingly positive: A sustainable result (FFO I) of at least €128 m is expected for 2021, and FFO I of at least €140 m for the post-pandemic financial year 2022.
Andreas Quint, CEO of CA Immo: "Despite the ongoing Covid-19 pandemic, we were able to continue on our path of consistent value creation and increase in the first quarter of 2021. This continued solid and successful operational performance confirms the strategic path we have taken so far of organic growth through our own project developments, flanked by targeted portfolio acquisitions and disposals. This dynamic portfolio management will ensure and further increase the attractiveness and profitability of our real estate portfolio while maintaining a high standard of sustainability.”
Results of the 1st quarter 2021
FFO I, key indicator for the sustainable earnings power of the Group, which is reported before tax and adjusted for the sales result and other non-sustainable effects, increased by 4.5% to €31.4 m (31.3.2020: €30.0 m). FFO I per share amounted to €0.34 as at the reporting date (31.3.2020: €0.32 per share). FFO II, including the sales result and after tax an indicator of the overall profitability of the Group, totalled €30.0 m compared to €15.9 m in 2020. FFO II per share stood at €0.32 per share (31.3.2020: €0.17 per share).
CA Immo recorded a 1.8% increase in rental income to €63.6 m in the first quarter. This positive development is related to the portfolio growth of the past quarters. Net rental income totalled €50.5 m after the first three months (31.3.2020: €49.6 m), an increase of 1.9% year-on-year. The Covid-19 pandemic had a negative impact of €1.2 m on the net rental income as of the balance sheet date. This mainly relates to individual value adjustments and, to a lesser extent, rent reductions, which are, however, offset by opposing effects from incentive agreements (rent-free periods).
Property sales result
The result from property trading and construction services was €1.4 m as at the reporting date (31.3.2020: €0.2 m). The result from the sale of investment properties amounted to €3.0 m as at 31.3.2021 (31.3.2020: €–0.1 m).
Indirect expenses amounted to €–14.8 m after the first three months and were thus 15.6% above the previous year's level (31.3.2020: €–12.8 m).
At €43.8 m, earnings before interest, taxes, depreciation and amortisation (EBITDA) were 12.9% above the previous year's level of €38.8 m.
The revaluation result stood at €63.3 m as of the reporting date and was thus significantly better compared to the reference value of the previous year (31.3.2020: €–11.1 m). The "Upbeat" development project in Berlin was responsible for the positive development in the first quarter. In March 2021, one of the largest leases in the company's history was signed with Deutsche Kreditbank AG (DKB) for around 35,000 sqm of usable space. The 100% pre-letting thus achieved gives the starting signal for the development of this high-quality office building in Berlin's Europacity with a planned investment volume of around €300 m.
At €110.8 m, the Earnings before interest and taxes (EBIT) was 324.1% and thus substantially higher than the previous year's result (31.3.2020: €26.1 m), mainly due to the increase in the revaluation result.
The financial result totalled €–42.1 m after the first three months (31.3.2020: €20.5 m). The Group's financial expenses, an important component of the sustainable result, amounted to €–12.3 m and were thus 7.4% above the previous year's value for 2020 (€–11.4 m). The result from derivatives amounted to €–29.4 m (31.3.2020: €35.7 m). The 2021 value includes a derivative valuation of the convertible bond issued in October 2017 of €–37.4 m (31.3.2020: €41.5 m). This instrument consists of a debt component and, due to the repayment option in cash of CA Immo, an embedded derivative that must be separated. The embedded derivative of the convertible bond is reported at fair value. In contrast, the interest rate development over the first quarter of 2021 led to a positive valuation effect of the company's interest rate derivatives in the amount of €8.0 m (31.3.2020: €–5.8 m).
Earnings before taxes (EBT) totalled €68.7 m and were thus significantly higher than the previous year's figure of €46.6 m, primarily due to the higher revaluation result. Income tax expense amounted to €–27.3 m as at the reporting date (31.3.2020: €–13.1 m). The consolidated net profit of €41.4 m was 24% higher than the previous year's figure of €33.5 m. Earnings per share (undiluted) amounted to €0.45 (31.3.2020: €0.36 per share).
Balance sheet strength and high liquidity
CA Immo continues to have an extremely robust balance sheet with an equity ratio of 45.5% (31.12.2020: 45.9%) and cash and cash equivalents of €1,057.9 m (31.12.2020: €934.9 m). The net asset value EPRA NTA was €41.14 per share as at the reporting date (after €40.09 as at 31.12.2020).
Continued portfolio growth
CA Immo continued its strategic capital rotation programme in the first quarter of 2021. A number of property sales were successfully concluded – for example, the company withdrew from the small secondary market of Slovakia with the sale of the BBC 1 office building in Bratislava and sold a number of non-strategic properties in Germany at attractive conditions. At the same time, CA Immo was able to take over another self-developed office building into its own portfolio with the completion of the ZigZag office project in Mainz. Compared to the end of 2020, the value of total property assets increased slightly to €5.7 bn as at 31 March 2021, of which around 55% is attributable to Germany, the largest single market.
Outlook and earnings target
CA Immo expects a sustainable result of at least €128 m or €1.27 per share for the business year 2021 (annual target 2020 > €126 m). This target reflects, on the one hand, currently expected effects on earnings and continuing uncertainties in connection with the Covid-19 pandemic and, on the other hand, effects from property sales as part of the strategic capital rotation programme. As in the previous year, dynamic portfolio management should ensure or further increase the attractiveness of the property portfolio. The associated sales contribution from non-strategic properties should lead to a positive development of the overall operating result and an EBITDA above the previous year's value.
CA Immo is investing sales proceeds generated as part of this strategic capital rotation in the value-enhancing continuation of its first-class German development pipeline and in attractive portfolio acquisitions. Based on this sustainable organic portfolio growth, FFO I of more than €140 m is expected for the 2022 business year (> €1.39 per share).
The Interim Q1 2021 Report of CA Immobilien Anlagen AG is available at www.caimmo.com/en/investor-relations/financial-reports/