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DEMIRE Deutsche Mittelstand Real Estate AG

Earnings Release Nov 30, 2012

96_10-q_2012-11-30_89a717ad-1297-413d-a556-37c45a441e55.pdf

Earnings Release

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MAGNAT in brief

MAGNAT Real Estate AG is the first Frankfurt-listed real estate company focussing on real estate development in Austria and selected countries within the emerging economies of the Black Sea region.

MAGNAT is an integrated real estate group addressing the entire value chain covering the acquisition, development, and disposal of projects and construction land. The Group also offers real estate management services to third parties.

Key Group figures (unaudited)

in EUR'000 Q1
2012/13
Q1
2011/12*
Profit/loss on rental of real estate inventory 86 908
Profit/loss on asset management 19 33
Profit/loss from investments accounted for using the
equity method
163 –376
Profit/loss before interest and taxes (EBIT) –608 –724
Profit/loss before taxes (EBT) –675 –1,211
Net profit/loss for the period –622 –1,209
Net profit/loss attributable to parent company share
holders –630 –1,269
Basic earnings per share in EUR –0.05 –0.09
Diluted earnings per share in EUR –0.05 –0.09
Q1 FY
2012/13 2011/12
Shareholders' equity 19,604 20,229
Total liabilities 23,536 24,039
Total assets 43,141 44,267
Equity ratio in percent 45.4 45.7
Cash and cash equivalents 2,388 3,589

* adjusted

Interim Report for the 1st Quarter of Fiscal Year 2012/2013

  • Net loss for the reporting quarter halved
  • Results include unrealised fair value adjustments on real estate inventory in an amount of EUR –0.6 million, this charge was completely offset by foreign exchange gains
  • Further reduction of general and administrative expenses
  • Balance sheet ratios remain virtually unchanged, stable equity ratio

Frankfurt am Main, September 3, 2012 –Magnat Real Estate AG ("MAGNAT", ISIN DE000A0XFSF0) reported results for the first three months of fiscal year 2012/2013 (April 1, 2012 to March 31, 2013), which were largely in line with expectations. Due to an accounting change concerning the integration of R-QUADRAT Immobilien GmbH, MAGNAT had retroactively adjusted its financial statements as of April 1, 2010 and for fiscal year 2010/2011. Therefore, in this interim report, the comparable figures for the first quarter of fiscal year 2011/2012 are also presented based on the new accounting. We refer to the statements provided in the consolidated financial statements as of March 31, 2012 regarding the reverse acquisition.

In the first quarter of fiscal 2012/2013, earnings before interest and taxes (EBIT) amounted to EUR –0.6 million following a loss of EUR –0.7 million in the previous year's quarter. The positive earnings development resulted from an improved result from investments accounted for using the equity method as well as a further considerably decline in general and administrative expenses. This was partly offset by a significant reduction in profit on the rental of real estate inventory. Due to the noticeably reduction in financial debt in the previous year, the financial result was almost at break-even in the reporting quarter. Thus, the net loss for period was cut in half from EUR –1.2 million in the previous year to EUR –0.6 million in the reporting quarter.

Key stock market data

Q1 FY FY
2012/13 2011/12 2010/11*
Number of shares outstanding 13,894,651 13,894,651 13,894,651
Market capitalisation in EUR 4,585,235 9,031,523 24,315,639
Earnings per share in EUR –0.05 0.93 –0.74
NAV per share in EUR 1.40 1.44 0.92
Free float (shareholders < 10%) in
percent 55.3 55.3 54.3
Share capital in EUR 13,894,651 13,894,651 13,894,651

* data regarding earnings per share and NAV per share have been adjusted retroactively

Net asset value (NAV) calculation (in EUR million)

NAV No. of
shares
NAV per
share in EUR
NAV per the financial statements as of
June 30, 2012 19.71 13.89 1.42
Effect of exercise of options, convertibles and
other equity interests
Diluted NAV, after the exercise of options,
convertibles and other equity interests
19.71 13.89 1.42
Revaluations
Development of properties held for
investments
Revaluation of other non-current investments
Fair value of tenant leases held as finance
leases
Fair value of trading properties
Fair value of financial instruments
Deferred tax –0.31 –0.02
Goodwill as result of deferred tax
Diluted EPRA NAV 19.40 1.40

In the first quarter of fiscal 2012/2013, the profit on the rental of real estate inventory declined from EUR 0.9 million to EUR 0.1 million. This reduction reflects the sale of the German residential portfolio in the previous year. Consequently, the corresponding revenues and expenses no longer apply as of the fourth quarter of fiscal year 2011/2012.

The profit from asset management decreased slightly from EUR 0.03 million to EUR 0.02 million.

The result from investments accounted for using the equity method improved significantly from a loss of EUR –0.4 million in the previous year's quarter to a profit of EUR 0.2 million in the reporting quarter. This was the result of an improvement in operating performance of the companies accounted for at equity. In addition, there was a positive effect from unrealised fair value adjustments on investments accounted for using the equity method in an amount of EUR 0.3 million (prior year: 0 million).

Other operating income and other effects on earnings included an expense of EUR –0.6 million from unrealised fair value adjustments on real estate inventory, which primarily resulted from currency effects on real estate in the Ukraine. In the previous year's quarter, unrealised fair value adjustments on real estate inventory had amounted to a gain of EUR 0.2 million. The expense in the current quarter was offset by foreign exchange gains on US dollar positions of almost the same amount.

General and administrative expenses improved from EUR –1.2 million in the previous year to EUR –1.0 million thanks to our continued efforts at cost control. In the reporting period, other operating expenses declined noticeably by EUR 0.6 million as against the previous year. However, the previous year had included currency losses in the amount of EUR 0.4 million. In total, earnings before interest and taxes (EBIT) in the first quarter of fiscal year 2012/2013 amounted to EUR –0.6 million compared to EUR –0.7 million in the previous year.

Due to a marked reduction in financial debt in fiscal year 2011/2012, the financial result improved significantly from EUR –0.5 million to EUR –0.1 million in the reporting quarter. Income tax refunds amounted to EUR 0.1 million (prior year: EUR 0 million). Thus, the net loss for the period attributable to parent company shareholders stood at EUR –0.6 million as against EUR –1.3 million in the previous year. Basic and diluted earnings per share amounted to EUR –0.05 following EUR –0.09.

Name MAGNAT Real Estate AG
ISIN DE000A0XFSF0
Ticker symbol M5R (Bloomberg: M5R RK, Reuters: M5RGK.DE)
Number of shares 13,894,651
Free float (shareholders
< 10%) in percent
55.30
General Standard Frankfurt Stock Exchange (Frankfurt and Xetra)
Open Market Berlin, Düsseldorf and Stuttgart
Index C-DAX, DIMAX
Email [email protected]
Web www.magnat.ag

Financial calendar

Publication/event Date
 Annual General Meeting, Frankfurt/Main 29.10.2012
 Interim financial report as of September 30, 2012 30.11.2012
 Q3 interim release as of December 31, 2012 11.02.2013
 Annual report 2012/2013 30.07.2013
MAGNAT fiscal year: April 1 to March 31

Investor Relations

MAGNAT Real Estate AG Investor Relations Lyoner Straße 32 60528 Frankfurt/Main Telephone: +49 (0) 69-719 189 79 36 Fax: +49 (0) 69-719 189 79 11 Email: [email protected] Web: www.magnat.ag

Press Relations edicto GmbH Axel Mühlhaus / Werner Rüppel Telephone: +49 (0) 69-905 50 55 2 Email: [email protected]

Remarks: This interim report is also available in German. The German version of this report is authoritative. More information about the company and the online interim report is available on the Internet at www.magnat.ag. We would be pleased to send you information in printed form on request: [email protected]

In the reporting quarter, MAGNAT's total assets and balance sheet structure remained virtually unchanged compared to the balance sheet date as of March 31, 2012. As of June 30, 2012, total assets amounted to EUR 43.1 million following EUR 44.3 million as of March 31, 2012. Whereas non-current assets increased slightly from EUR 10.4 million to EUR 11.0 million, current assets declined from EUR 30.1 million to EUR 28.4 million. This was primarily the result of a decline in cash and cash equivalents from EUR 3.6 million to EUR 2.4 million. The equity ratio remained stable at 45.4 percent compared to 45.7 percent as at the end of fiscal year 2011/2012. In total, financial debt remained unchanged at EUR 20.2 million.

The net asset value (NAV) calculated according to EPRA requirements amounted to EUR 19.40 million. Based on 13.89 million shares outstanding, this is equivalent to a NAV per share of EUR 1.40 as against EUR 1.44 as at the end of fiscal year 2011/2012.

Outlook

The situation in the real estate markets in which MAGNAT is active, is likely to remain challenging in the current financial year. In view of the unresolved government debt crises in Europe, the outlook for the world economy remains bleak.

Therefore, the key focus of MAGNAT's financial planning remains securing the Group's liquidity as well as implementing measures in order to sustainably improve the Group's earnings situation in the medium term. In addition, MAGNAT will continue to consistently focus the portfolio on the emerging markets of the Black Sea region. MAGNAT's key markets are the Ukraine, Turkey, Georgia, and possibly Romania.

Frankfurt/Main, September 3, 2012

Dr. Marc-Milo Lube Jürgen Georg Faè CEO CFO

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