CA Immo continues to focus on Class A office buildings and triples consolidated net earnings
- Rental income decreased slightly by approx. 2% to €62.2 m mainly due to portfolio sales (31.3.2021: €63.6 m)
- Recurring earnings (FFO I) of €29.2 m (€0.29 per share) approx. 7% below the previous year's value
- Operating result (EBITDA) rose by approx. 6% year-on-year thanks to strong sales performance and lower indirect expenses
- High revaluation result of €98.3 m generated mainly by ongoing development of projects under construction and land reserves in Germany (31.3.2021: €63.3m)
- Consolidated net profit more than tripled to €136.9 m (31.3.2021: €41.4 m)
- Net asset value EPRA NTA per share at €41.51 after €40.05 as of 31.12.2021 (+4%)
With profitable sales of non-strategic properties and good progress in the implementation of the development pipeline, CA Immo's operating performance remained stable in the first quarter, seamlessly from the previous quarters. The strong sales result combined with lower indirect costs led to an increase in operating profit of around 6%. In addition, a significant increase in revaluation result helped to more than triple consolidated net income compared with the previous year.
The path of continuous improvement in quality, profitability and sustainability through own project developments, flanked by targeted portfolio acquisitions and sales, was continued in the first quarter. In total, CA Immo sold two hotels and an older office building in the first three months of the year and at the same time acquired a high-quality office building in a prime Düsseldorf city center location. The value of total property assets increased further from €6.3 bn to €6.4 bn, thanks in part to the positive revaluation result.
Results of the 1st quarter 2022
FFO I, key indicator for the recurring earnings power of the Group, which is reported before tax and adjusted for the sales result and other non-sustainable effects, decreased slightly by 6.9% to €29.2 m (31.3.2021: €31.4 m). FFO I per share amounted to €0.29 as at the reporting date (31.3.2021: €0.34 per share). FFO II, including property sales result, other non-recurring earnings effects and after tax, is an indicator of the Group's overall profitability and totalled €22.9 m compared to €30.0 m in 2021. FFO II per share stood at €0.23 per share (31.3.2021: €0.32 per share).
CA Immo recorded a 2.1% decrease in rental income to €62.2 m in the first quarter. This development is mainly related to the sale of non-strategic properties as part of the strategic capital rotation program. The decline in rental income due to disposals and slightly lower occupancy of investment properties totaling €3.0 m year-on-year was not fully offset by project completions in the course of 2021 (+€1.1 m) and the purchase of Kasernenstrasse 67 in Duesseldorf (+€0.6 m).
Net rental income after the first three months was €48.6 m (1Q 2021: €50.5 m), a year-on-year decline of 3.8%.
Property sales result
The result from property trading and construction services was €8.0 m as at the reporting date (31.3.2021: €1.4 m). The result from the sale of investment properties amounted to €0.1 m as at 31.3.2022 (31.3.2021: €3.0 m).
Indirect expenses amounted to €–11.3 m after the first three months and were thus 23.7% below the previous year's level (31.3.2021: €–14.8 m), due in particular to lower personnel expenses.
At €46.5 m, earnings before interest, taxes, depreciation and amortisation (EBITDA) were 6.2% above the previous year's level of €43.8 m.
The revaluation result stood at €98.3 m as of the reporting date and was thus significantly higher compared to the reference value of the previous year (31.3.2021: €63.3 m). The positive development in the first quarter was primarily attributable to revaluations of development projects under construction and land reserves in Berlin and Frankfurt amounting to around €76 m.
At €161.0 m, the Earnings before interest and taxes (EBIT) was 45.3% and thus substantially higher than the previous year's result (31.3.2021: €110.8 m), mainly due to the increase in the revaluation result and result from joint ventures.
The financial result totalled €19.8 m after the first three months (31.3.2021: €–42.1 m). This decrease is mainly attributable to a positive valuation effect of the Company's interest rate derivatives amounting to €30.0 m (31.3.2021: €8.0 million). The convertible bond was almost completely converted in 2021. The Group's financing expenses amounted to €–10.4 m, 14.9% below the previous year's value for 2021 (€–12.3 m). This decline resulted, among other things, from the conversion of the convertible bond and the repayment of corporate bonds.
Earnings before taxes (EBT) totalled €180.8 m and stood significantly above the previous year's figure of €68.7 m, largely because of the higher revaluation result, joint venture result and the positive financial result. Income tax expense amounted to €–14.3 m as at the reporting date (31.3.2021: €–2.2 m).
The consolidated net profit of €136.9 m was 231% higher than the previous year's figure of €41.4 m. Earnings per share amounted to €1.36 (31.3.2021: €0.45 per share).
Balance sheet strength and high liquidity
CA Immo continues to have an extremely robust balance sheet with a solid equity ratio of 47.3% (31.12.2021: 46.3%) and cash and cash equivalents of €565.7 m (31.12.2021: €633.1 m). The net asset value EPRA NTA was €41.51 per share as at the reporting date (after €40.05 as at 31.12.2021).
Increase in portfolio quality through capital rotation
In the first quarter of 2022, CA Immo profitably sold two hotels in Germany, an older office building in Budapest and plots in the Mainzer Zollhafen district development (joint venture). On the investment side, the high-quality office building "Kasernenstrasse 67" with around 10,400 sqm in a prime inner city location was acquired at the beginning of the year to strengthen the fourth German core market of Düsseldorf. The value of total property assets increased further from €6.3 bn to €6.4 bn, thanks in part to the positive revaluation result. Around 60% of the portfolio is attributable to Germany, the largest single market.
Value creation through the development of land and Class A buildings will continue to be a key success factor for our business model. Of our four projects currently under construction with a total investment volume of around €1 bn and an average pre-letting rate of around 80%, two office buildings will be completed in 2022: the ONE high-rise project in Frankfurt and the Grasblau office building near Potsdamer Platz in Berlin. After completion, both buildings will be transferred to our portfolio and will contribute positively to portfolio quality and rental income.
In addition, the successful sale of non-strategic real estate as part of the strategic capital rotation program should again lead to a strong EBITDA-generating sales result and a corresponding inflow of liquidity.
Due to the Ukraine crisis and other changing conditions such as rising inflation and interest rate reversals, general price increases and bottlenecks in global supply chains, a forecast at the present time is subject to a high degree of uncertainty. CA Immo plans to specify its annual financial target for the 2022 financial year as part of its half-year results in August 2022.
The Interim Q1 2022 Report of CA Immobilien Anlagen AG is available at: www.caimmo.com/en/investor-relations/financial-reports/