CA Immo continues stable operating development, consolidated net profit more than doubles
- Recurring earnings (FFO I) of €100.1 m (€1.03 per share) 4% below the previous year's value
- Rental income stable at €175.8 m (30.9.2020: €177.6 m)
- Successful capital rotation programme generates strong sales result of €32.8 m (30.9.2020: €24.9 m)
- Operating result (EBITDA) of €160.0 m up 18% on the previous year's figure
- Positive revaluation result of €185.2 m reflects, among other things, successful project pre-letting and strong investor demand in Germany (30.9.2020: €–21.5 m)
- Strong consolidated net profit of €190.8 m 117% above the previous year´s figure (30.9.2020: €88.0 m)
- Net asset value EPRA NTA per share at €41.81 after €40.09 as of 31.12.2020 (+4%)
- Value of property assets at €5.9 bn (+5% at year-end 2020)
- Significant improvement in balance sheet and financing ratios since the beginning of the year (equity ratio at 50.2% after 45.9% as at 31.12.2020)
- FFO I annual target for 2021 of around €128m is confirmed; FFO I for 2022 from today´s perspective below the target of €140 m
- Strategic options for the core market of Romania being evaluated, including a potential sale of the entire portfolio
Andreas Quint, CEO of CA Immo: "After the first nine months of 2021, we can present an unchanged stable operating performance record, which is primarily characterised by successfully completed sales transactions and good progress in the implementation and pre-letting of the development pipeline. All sales in the reporting period were concluded at prices that were significantly higher than the book values of the properties sold. During the same period, we were able to add a total of three of our own project completions to the portfolio. Our strategic capital rotation programme is thus running very profitably and contributes significantly to earnings growth and to securing the long-term value and competitiveness of our portfolio.”
Results of the first nine months of 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, stood at €100.1 m after the first nine months of 2021, 4.4% below the previous year´s figure of €104.7 m. FFO I per share amounted to €1.03 as at the reporting date (30.9.2020: €1.13 per share). FFO II, including the sales result and after tax an indicator of the overall profitability of the Group, totalled €105.1 m compared to €94.9 m in 2020 (+10.8%). FFO II per share stood at €1.08 per share (30.9.2020: €1.02 per share).
CA Immo recorded a slight decline in rental income of 1.0% to €175.8 m in the first nine months of 2021. This development is related to the property sales of the past quarters, which could not be fully compensated by the positive rental contributions from project completions and acquisitions of investment properties in the same period. Net result from rent totalled €152.8 m after the first nine months (30.9.2020: €159.5 m), a decline of 4.2% year-on-year. This decline is based, among other things, on a positive effect in the 1st half of 2020 in the amount of €3.7 m in connection with proceedings decided in favour of CA Immo regarding the payment of building taxes (release of provisions for property-related taxes). The Covid-19 pandemic impacted net rental income by €–2.8 m in the first nine months of 2021.
Property sales result
The result from property trading and construction services was €6.9 m as at the reporting date (30.9.2020: €6.1 m). The result from the sale of investment properties amounted to €32.8 m as at 30.9.2021 (30.9.2020: €24.9 m). The sale of a non-strategic plot in Düsseldorf in the second quarter generated the major part of this result.
Indirect expenses amounted to €–39.8 m after the first nine months and were thus 33.0% below the previous year's level (30.9.2020: €–59.4 m). The previous year´s figure included a provision for possible court fees in connection with the action for damages brought by CA Immobilien Anlagen AG in the second quarter of 2020 regarding the privatisation of the federal housing companies (BUWOG). Adjusted for this one-off effect of around €26.0 m, among others, the indirect expenses of the previous year were €–32.9 m.
As a result of the developments outlined above, earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 17.5% to €160.0 m (compared to €136.1 m in 1-3Q 2020). Adjusted, among other things, for the above-mentioned provision for the BUWOG lawsuit in the amount of approximately €26.0 m in 2020, EBITDA as of 30 September 2021 is 3.2% above the previous year's value.
The revaluation result of €185.2 m was significantly above the previous year´s value (30.9.2020:
€–21.5 m). Among other things, the positive revaluation of the "Upbeat" development project in Berlin, which was fully let in March 2021 even before the start of construction, made a significant contribution to this.
At €344.1 m, the Earnings before interest and taxes (EBIT) was substantially higher than the previous year's result (30.9.2020: €110.7 m), mainly due to the increase in the revaluation result.
The financial result totalled €–68.1 m after the first nine months (30.9.2020: €9.7 m). This large deviation compared to the previous year is mainly due to a negative derivative valuation of the convertible bond issued in October 2017 (which has been fully converted in the meantime) in the amount of
€–46.2 m (30.9.2020: €56.2 m).
Earnings before taxes (EBT) totalled €276.0 m and were thus significantly higher than the previous year's figure of €120.4 m, primarily due to the higher revaluation result. Taxes on earnings were
€–85.2 m as at the reporting date (30.9.2020: €–32.4 m) mainly due to increased deferred taxes. Due to the developments described above, the consolidated net profit of €190.8 m was substantially higher than the previous year's figure of €88.0 m. Earnings per share amounted to €1.96 (30.9.2020: €0.95 per share).
Balance sheet strength and high liquidity
Convertible bonds with a nominal value of €200.0 m were converted over the reporting period, a significant factor for the increase in the equity ratio to 50.2% (31.12.2020: 45.9%) as well as an improvement in all balance sheet and financing ratios. As at the key date, CA Immo has cash and cash equivalents of €847.2 m (31.12.2020: €934.9 m).
Portfolio optimization through strategic capital rotation continued
CA Immo continued its strategic capital rotation programme in the 3rd quarter of 2021. A number of property sales, which were already successfully completed in the 1st quarter (including the sale of the BBC 1 and 2 office complex in Bratislava and several sales of non-strategic plots in Germany), were followed in the 3rd quarter by the sale of a smaller office building in Budapest. At the same time, two office buildings were added to the portfolio as planned with the completion of the Missouri Park and Mississippi House office projects in Prague. Including the ZigZag office project in Mainz, which was completed in the first quarter, CA Immo added three self-developed office buildings to its own portfolio in the first nine months. The value of total property assets stands at €5.9 bn (+5% compared with year-end 2020). Around 57% of the portfolio (based on book value) is attributable to Germany, the largest single market (30.12.2020: 54%), around 9% account for Austria and 34% for the CEE region. The Group-wide occupancy rate fell to 90.0% (31.12.2020: 94.8%), which is primarily due to declines in occupancy in the Hungarian and Serbian portfolio. The net asset value EPRA NTA per share (diluted) was €41.81 as at the reporting date (after €40.09 as at 31 December 2020).
The FFO I annual target for 2021 of around €128 m is confirmed. The successful sale of non-strategic assets as part of the strategic capital rotation program is also expected to lead to a strong EBITDA-accretive sales result and a corresponding inflow of liquidity.
The continuous sales activity of non-strategic assets, combined with weaker letting momentum should generate FFO I for 2022 which, from today´s perspective, will be below the target of €140 m. This development is largely driven by ongoing uncertainties and delays in the letting markets, especially in connection with the recent worsening of the Covid-19 pandemic in our core markets. The final impact of the pandemic and its economic consequences cannot be conclusively assessed in light of the recent increase in negative developments, but are subject to ongoing evaluation by CA Immo.
In addition, the Management Board and Supervisory Board of CA Immo have decided to start evaluating all strategic options for the core market of Romania, including a potential sale of the entire portfolio.
As a result of the dynamic developments described above, the Management Board intends to specify the FFO I target for the 2022 business year in the first half of next year.
The Interim 1-3Q 2021 Report of CA Immobilien Anlagen AG is available at: www.caimmo.com/en/investor-relations/financial-reports/