Quarterly Report • Aug 14, 2018
Quarterly Report
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Half-Year Financial Report for the Period 1 January Through 30 June 2018 Overview Key Financial Data
| ACCENTRO Real Estate AG | 1st half-year 2018 1 January 2018 – 30 June 2018 |
1st half-year 2017 1 January 2017 – 30 June 2017 |
|---|---|---|
| Income statement | TEUR | TEUR |
| Consolidated revenues total Group | 97,922 | 42,684 |
| Gross profi t / loss | 19,132 | 14,985 |
| EBIT | 14,349 | 11,200 |
| EBT | 8,658 | 7,533 |
| Consolidated income | 5,746 | 5,755 |
| Interest coverage ratio (ICR)* | 3.79 | 3.96 |
* EBIT adjusted by non-period expenses/income in relation to balance of interest expense and interest income
| ACCENTRO Real Estate AG | 30 June 2018 | 31 December 2017 |
|---|---|---|
| Balance sheet ratios | TEUR | TEUR |
| Non-current assets | 44,938 | 22,179 |
| Current assets | 364,576 | 325,605 |
| Shareholders' equity | 168,613 | 153,697 |
| Equity ratio | 41.2% | 44.2% |
| Total assets | 409,513 | 347,785 |
| Loan to value (LTV)* | 49.5% | 39.4% |
* Net fi nancial debt divided by gross assets
| Company shares | |
|---|---|
| Stock market segment | Prime Standard |
| ISIN | DE000A0KFKB3 |
| German Securities Code Number (WKN) | A0KFKB |
| Number of shares on 30 June 2018 | 30,317,934 |
| Free fl oat | 5.95% |
| Highest price (1 January – 30 June 2018)* | EUR 11.50 |
| Lowest price (1 January – 30 June 2018)* | EUR 7.62 |
| Closing price on 29 June 2018* | EUR 11.50 |
| Market capitalisation on 29 June 2018* | EUR 348,656,241 |
* Closing prices in Xetra trading
Dear Shareholders, Dear Ladies and Gentlemen,
At mid-year, it is time to refl ect on the fi rst six month of 2018, and we can say with pride that they have been quite a success. Our sales and earnings fi gures clearly exceed those of the previous year. And the favourable parameters remain in place. So, the ground is laid for the continuous growth of ACCENTRO.
Revenues rose by 129.4% during the fi rst six months of the year, up to EUR 97.9 million. The extra ordinarily steep increase is associated with our joint venture in Berlin-Hohenschönhausen. During the fi rst half-year of 2018, it contributed c. EUR 42 million to revenues and it will keep off ering signifi cant sales and earnings potential in the future. But even without this transaction, ACCENTRO managed to increase its revenues by over 30%. The earnings before interest and tax (EBIT) amounted to EUR 14.3 million — a substantial increase by 28.1% over prior-year period.
I am pleased by the sustained dynamic of our privatisation business. Here, sales have seen particularly quick growth. At the same time, we successfully continued to pursue our growth strategy in the area of new-build construction. Our collaborative ventures with property developers are beginning to bear fruit. For one thing, the net service income quadrupled year on year as it rose to EUR 1.5 million.
We also have spent the fi rst half-year of 2018 laying a robust foundation for continued fastpaced growth. Our privatisation portfolio has been signifi cantly bolstered by acquisitions in a volume of more than EUR 90 million. At the same time, we bought into auspicious residential property portfolios in the metropolises of Berlin and Hamburg through joint ventures, and thereby secured addition revenue potential for our service business. These transactions were made possible not least by the corporate bond we placed in January 2018 whose proceeds are almost entirely reinvested already. In the same context, we are also looking into alternative options to fi nance our growth.
The positive business development makes us optimistic in regard to the coming months. As the year progresses, we intend to keep expanding our position as market leader among the public companies in Germany's housing privatisation business. Accordingly, we are reaffi rming our forecast for a substantial top line sales growth in the two-digit percentage range, plus for an increase in EBIT to somewhere between EUR 36 million and EUR 40 million.
Kind regards,
Jacopo Mingazzini Management Board
The condensed consolidated interim fi nancial statements of ACCENTRO Real Estate AG on which this report is based have been prepared in accordance with the International Financial Reporting Standards (IFRS) the way they are to be applied in the European Union.
In the course of the 2017 fi nancial year, ACCENTRO Real Estate AG divested itself entirely of its portfolio properties and of any partnership interests in property portfolio companies that it still held, and thereby transformed into a pure trading entity. In the fi nancial statements of the fi nancial years 2016 and 2017, these portfolio properties and interests were recognised as "non-current assets and liabilities held for sale" in the balance sheet while their earnings and expenses were recognised as "net loss or income from discontinued operation" in the income statement. As of the 2018 fi nancial year, reports will no longer include a presentation of the "discontinued operation" or of "non-current assets held for sale."
All monetary fi gures in this report are stated in Euro (EUR). Both individual and total fi gures represent values with the smallest rounding diff erence. Accordingly, adding the values of the individual line items may result in minor diff erences compared to the sum totals posted.
The ACCENTRO Group is a listed property company focusing on residential real estate in Germany. Its business activities are limited exclusively to domestic property, particularly in economically attractive locations, the focus being on Berlin. ACCENTRO AG's activities concentrate on the trading of residential real estate within the framework of housing privatisations. Associated with this line of business is the management of the residential property holdings. The portfolio is not divided into segments.
The business activities of the ACCENTRO Group include the buying and selling of residential properties and individual apartments, especially the retailing of apartments to owner-occupiers and buy-to-let investors within the framework of retail privatisations of housing portfolios. The focus here is on tenant-sensitive housing privatisations. The privatisation services provided by the ACCENTRO Group involve both the retailing of apartments from the proprietary property stock of the ACCENTRO Group and the provision of privatisation services on behalf of third parties.
ACCENTRO AG is the parent company of the ACCENTRO Group. ACCENTRO AG acts as an operationally active holding company for a number of member companies in which the housing stock is concentrated, and for one service company focused on the business of housing privatisation. For companies in which it holds a controlling interest, ACCENTRO AG assumes the top-down responsibilities of corporate controlling, funding, and administration within the ACCENTRO Group. ACCENTRO AG's sphere of ownership includes core divisions such as Legal, Accounting, Controlling, Risk Management, Funding, Purchasing, Asset Management and IT.
The ACCENTRO Group consists of several property holding companies directly managed by ACCENTRO AG that own the real estate holdings of the ACCENTRO Group. All of the property vehicles are consolidated in the consolidated fi nancial statements of ACCENTRO AG. The ACCENTRO Gehrensee GmbH subgroup was sold and fi nally consolidated during the second quarter of 2018. ACCENTRO AG retains only a minority stake of 25% that is recognised among the "equity interests accounted for using the equity method."
ACCENTRO Real Estate AG uses EBIT as fi nancial performance indicator for corporate controlling purposes. Here, the key control variable is the sales performance of the properties, with defi nitive factors such as the number of condominium reservations placed by potential buyers, and the actual sales prices realised. The latter is aggregated both as number of fl ats involved and as sales total. Among the other factors that the control system takes into account are the operating results of each sub-portfolio or of each property. In addition, control variables like the number of new clients as well as viewings and reservations serve as early indicators of the Company's performance.
Factors aggregated on the level of the parent Group include prompt and regular updates on the liquidity position. The liquidity planning for the next 12 months is conducted on a rolling basis. This centrally controlled responsibility helps to monitor the fi nancial stability of the corporate Group. Continuously measuring the liquidity fl ows on the level of each company and the level of the parent Group is an integral part of this control.
In the time passed since their representation in the annual report for the 2017 fi nancial year, there have been no major changes in the macro-economic parameters.
In its economic report no. 44 of June 2018, the IfW Kiel Institute for the World Economy suggested that Germany seems to be taking a breather without interpreting this as a sign for an imminent downturn. Despite the uncertainty stirred up over the intensifying protectionist tendencies in global trade, Germany's domestic economy remains robust. In June, barely 2.3 million members of the German working population were without a job, putting the unemployment rate at 5.0%, the lowest level in years. The IfW continues to predict a year-end GDP growth of 2 percent for 2018.
The business cycle in the advanced economies—the eurozone being one of them—continues to have a positive outlook with its moderate growth rates, according to IfW economic report no. 43 of June 2018, even if its momentum has slowed.
Following the meetings of the ECB's Governing Council on 14 June 2018 and 26 July 2018, the European Central Bank (ECB) announced that it would make no changes to its monetary policy instruments until further notice, but would instead maintain its current trajectory of quantitative easing. Accordingly, the historically low level of interest will remain in place for the time being.
The situation on Germany's housing market has not changed over the past six months. The statements of the Third Report of the German Government on the Housing and Real Estate Economy in Germany and the 2016 Resident Fee and Rent Report published in June 2017 apply now as then: "During the reporting period, the strained situation on the housing markets of numerous cities and regions, which has evolved since 2012, continued to intensify. The dynamic on the housing markets in the largest cities, many campus towns and regions of urban character has persisted, not least because of massive population gains through incoming migration from inside and outside Germany. The housing markets of these locations show supply bottlenecks matched by rising residential rents and prices.
However, the housing market situation still diff ers considerably from one region to the next. Fast-growing regions with housing shortages contrast with other regions that are marked by vacant housing and balanced residential markets in rural, peripheral and economically undeveloped areas where rents and prices are either stagnating or even softening.
There are a variety of reasons for the strong demand in a growing number of German housing markets. The emerging housing shortage of recent years is to a large extent explained by demographic growth as a result of incoming migration from other parts of the country and abroad. Another, equally important demand impulse is generated by the sustained economic boom cycle with corresponding increases in jobs and income. Given the persistently low interest levels and the absence of stable-valued investment alternatives, real estate as buy-to-let investment remains as popular as ever among German and international investors. At the same time, homeownership has become more aff ordable for owner-occupiers due to favourable terms of fi nancing, and this in spite of rising property prices."
The brisk price dynamics during the fi rst six months of 2018 and the persistent supply shortage, which will take many years to roll back, has seriously increased the risk of a bubble developing in the current cycle, although Berlin takes exception to the threat. For the time being, the Management Board is not aware of any signs suggesting an imminent reversal of the price trend in the market segment most relevant to ACCENTRO, and this notwithstanding the increasingly critical media coverage of the real estate price performance.
The developments in the market environment of the ACCENTRO Group remain robust. Notwithstanding the accelerating supply contraction in Berlin, it managed to acquire lucrative real estate portfolios in the German capital. In addition, we keep a close eye on the current developments of the residential property market and have stepped up our eff orts to tap into other German metropolises as well as campus towns and urban economic centres. Our focus lately has been on the Leipzig metro region.
The business performance of the ACCENTRO Group during the fi rst half-year of 2018 was satisfactory. For one thing, sales revenues and letting take-up have developed as planned in 2018 to date. The net income from sales in the amount of EUR 13.5 million were clearly a step up from the prior-year semester with EUR 10.6 million. The EBIT of EUR 14.3 million after EUR 11.2 million at the end of the 2017 reference period is right on target in the eff ort to achieve EUR 36 to 40 million in predicted EBIT by the end of the year.
Against the background of the sales anticipated for the third and fourth quarter of the fi nancial year, the Management Board of ACCENTRO Real Estate AG has reaffi rmed the EBIT forecast it made in the consolidated fi nancial statements of 31 December 2017.
The Company's share capital changed during the reporting period in the sense that 4,984,212 convertible bonds from the issued 2014/2019 convertible bond were converted into 1.056999 shares each, and 123,029 convertible bonds into 1.0139 shares each. Accordingly, the share capital of ACCENTRO Real Estate AG amounted to EUR 30,317,934.00 as of 30 June 2018.
There were no senior staff changes to the Supervisory Board and the Management Board of ACCENTRO Real Estate AG during the reporting period.
The ACCENTRO Group's key revenue and earnings fi gures (2017 fi gures: continuing operation) developed as follows during the fi rst six months of the 2018 fi nancial year:
| H1 2018 | H1 2017 | |
|---|---|---|
| EUR million | EUR million | |
| Revenues | 97.9 | 42.7 |
| EBIT | 14.3 | 11.2 |
| Consolidated income (2017: continuing operation) | 5.7 | 5.8 |
The consolidated revenues of the fi rst semester of the 2018 fi nancial year totalled EUR 97.9 million (reference period: EUR 42.7 million) and therefore clearly exceeded the total of the prior-year reference period. While the fast growth in sales volume did match the forecast, it was not refl ected in the net income from sales nor was it meant to. It was caused by the sale of the ACCENTRO Gehrensee GmbH subgroup. The real estate assets tied up in that subgroup were sold nearly at book value, which is why the revenue of c. EUR 42.3 million generated by the transaction had only a negligible impact on net income. The plots sold (around 41,500 m² in Berlin-Lichtenberg) are earmarked for the development of residential buildings, and the zoning requirements toward this end are currently being sorted out. The sale and purchase agreement specifi es that ACCENTRO stays invested in the ACCENTRO Gehrensee project with a 25% stake and a mezzanine loan, which means that ACCENTRO remains able to participate directly in future project planning achievements.
The earnings before interest and tax (EBIT) for the reporting period equalled EUR 14.3 million (reference period: EUR 11.2 million) and thus moved within the parameters we predicted.
At EUR 1.9 million, the total payroll and benefi t costs increased compared to the reference period with its total of EUR 1.5 million. The increase is due to bonus payments made during Q1 2018 and to the expansion of the workforce in the course of the 2017 fi nancial year and the ongoing fi nancial year.
The net interest result by midyear 2018, having slipped further into the negative range (EUR –5.8 million; reference period: EUR –3.7 million), is explained by the corporate bond over EUR 100 million that was issued in January 2018, which substantially expanded the fi nancial liabilities and coincided with a proportionate increase in interest expenses.
The earnings before taxes equalled EUR 8.7 million, up from EUR 7.5 million by the end of the prior-year semester. Taking into account income taxes of EUR –2.9 million (reference period: EUR –1.8 million), this results in a consolidated income of EUR 5.7 million (reference period: EUR 5.8 million), though it should be added that the tax load is burdened further by taxes unrelated to this accounting period as a result of an external tax audit.
| H1 2018 | H1 2017 | |
|---|---|---|
| EUR million | EUR million | |
| Cash fl ow from operating activities | –53.6 | –31.3 |
| Cash fl ow from investment activities | –14.1 | 3.4 |
| Cash fl ow from fi nancing activities | 92.0 | 20.2 |
| Net change in cash and cash equivalents | 24.3 | –7.7 |
| (+) Increase/(–) decrease in cash and cash equivalents from the acquisition/disposal of fully consolidated companies |
–5.4 | 0.0 |
| Cash and cash equivalents at the beginning of the period | 7.9 | 15.1 |
| Cash and cash equivalents at the end of the period | 26.8 | 7.4 |
Key Figures from the Cash Flow Statement
During the fi rst six months of 2018, the cash fl ow from operating activities amounted to EUR –53.6 million (reference period: EUR –31.3 million). The negative operating cash fl ow by midyear is defi nitively caused by the continued build-up of inventory assets. Taking into account acquisitions worth c. EUR 91.4 million and disposals worth c. EUR 75.2 million, the inventory real estate assets grew by c. EUR 16.3 million on balance. Although it should be taken into account that some of the disposals from the inventory real estate assets during the current period were non-cash items. In conjunction with the deconsolidation of the ACCENTRO Gehrensee GmbH subgroup, properties with a combined book value of c. EUR 42 million were sold, of which EUR 18.5 million had no cash eff ect. For other property sales in a book value of c. EUR 5.1 million, payment was already received in 2017 so that the positive contribution to operating income associated with the disposal is not matched with a corresponding receipt of payment. The balance of advance payments received decreased by a proportionate amount. But the property acquisitions worth c. EUR 91.4 million were generally cash-eff ective. Due to the classifi cation of the properties as trading assets, investments in inventory assets are allocated to the current operations.
During the fi rst half year, the negative operating cash fl ow prior to divestments/reinvestments in the inventory real estate assets was caused primarily by higher tax payments (EUR –7.7 million, prior period: EUR –0.6 million) and an increase in trade receivables. The elevated tax payments are primarily the result of higher set prepayments as well as one-off taxes related to other periods.
The cash fl ow from investment activities amounted to EUR –14.1 million during the reporting period (reference period: EUR 3.4 million). The amount refl ects EUR 11.7 million in investments in minority interests in companies with real estate portfolios in Hamburg, Berlin and Brandenburg an der Havel. A down-payment and incidental costs toward the new ACCENTRO headquarters in Berlin add up to EUR 2.3 million.
The cash fl ow from fi nancing activities amounted to EUR 92.0 million during the reporting period (reference period: EUR 20.2 million) is defi nitively infl uenced by a cash infl ow in the amount of EUR 98.5 million from a corporate bond issued in January and by a cash outfl ow in the amount of EUR 5.2 million toward dividend payments in May 2018 (May 2017: EUR 3.7 million). Borrowings and loan payments going beyond that more or less even each other out.
The balance of changes to cash and cash equivalents that relate to the basis of consolidation, which amount to EUR –5.4 million, result primarily from the sale of the ACCENTRO Gehrensee GmbH subgroup.
Cash and cash equivalents amounted to EUR 26.8 million as of 30 June 2018, compared to EUR 7.9 million by 31 December 2017.
| Key Figures from the Balance Sheet | ||
|---|---|---|
| 30 June 2018 | 31 Dec. 2017 | |
| EUR million | EUR million | |
| Non-current assets | 44.9 | 22.2 |
| Down-payments on owner-occupied plots and buildings | 2.3 | 0.0 |
| Non-current receivables | 15.5 | 2.5 |
| Equity investments and equity-accounted interests | 8.5 | 1.5 |
| Other non-current assets | 18.6 | 18.2 |
| Current assets | 364.6 | 325.6 |
| Inventory assets | 320.3 | 304.0 |
| Receivables | 17.5 | 13.7 |
| Cash and cash equivalents | 26.8 | 7.9 |
| Non-current liabilities | 137.5 | 43.4 |
| Current liabilities | 103.4 | 150.7 |
| Shareholders' equity | 168.6 | 153.7 |
| Total assets | 409.5 | 347.8 |
The total assets increased by EUR 61.8 million since the balance sheet date of 31 December 2017, climbing to a sum total of EUR 409.5 million. The main reason for the rise is the growth in the non-current assets by EUR 22.8 million. The sum includes the down-payment of EUR 2.3 million on the Company's new headquarters in Berlin that was made during the year, the mezzanine loan (EUR 9.8 million) left in place despite the disposal of the ACCENTRO Gehrensee GmbH subgroup, two at-equity investments in a combined total of c. EUR 6.2 million and investments in affi liates undertaken in the course of the year. Other factors that contributed to the growth in total assets included the expansion of inventory assets by EUR 16.3 million, the increase in accounts receivable by EUR 3.8 million, and the growth in cash positions by EUR 18.9 million.
The structure of equity and liabilities as of 30 June 2018 provides a much clearer picture of the timely refi nancing of the ACCENTRO Group than the composition of the equity and liabilities as of 31 December 2017 did because, at year-end, special fi nancial reporting rules required that all fi nancial liabilities subject to a change-of-control provision be recognised as current liabilities. After 30 June 2018, this special disclosure will be omitted, as no fi nancial institution has exercised its special right of termination.
Non-current liabilities were increased substantially by the issuance of a corporate bond in January 2018, which prompted a net cash infl ow in the amount of EUR 98.5 million. This implies an increase by EUR 43.4 million since 31 December 2017 to a new total of EUR 137.5 million. Moreover, non-current liabilities increased due to the aforementioned reclassifi cation eff ects as current fi nancial liabilities were reclassifi ed as non-current ones. Current liabilities declined by EUR 47.3 million to EUR 103.4 million since the end of 2017 (EUR 150.7 million), which is mainly explained by the reclassifi cation eff ects explained above.
During the reporting period, the shareholders' equity of the ACCENTRO Group rose from EUR 153.7 million as of 31 December 2017 to EUR 168.6 million by 30 June 2018. The positive consolidated income of EUR 5.7 million is matched by dividend payments in the amount of EUR 5.2 million. Exercised conversion rights strengthened the shareholders' equity to the tune of EUR 12.8 million. While the shareholders' equity rose in absolute fi gures, the equity ratio dropped from 44.2% to 41.2% as a result of the surge in total assets by EUR 61.7 million.
Since year-end 2017, the balance sheet structure changed as a result of the corporate bond that was issued in January 2018. The loan-to-value ratio (LTV) rose from 39.4% to 49.5% by 30 June 2018.
The economic situation of the ACCENTRO Group remained unchanged during the fi rst six months of the 2018 fi nancial year. The Management Board of ACCENTRO AG therefore reaffi rms its account of the economic situation previously made in the 2017 annual report, which was published on 16 March 2018.
No events of material signifi cance for ACCENTRO Real Estate AG transpired between the balance sheet date of 30 June 2018 and the day on which the fi nancial statements were compiled.
In the annual report for the 2017 fi nancial year, the Management Board of ACCENTRO AG predicted a top line sales growth in the double-digit range for the 2018 fi nancial year, and moreover predicted earnings before interest and tax (EBIT) in a range between EUR 36 million and EUR 40 million. Given the present market situation on the key markets of ACCENTRO AG in combination with the persistently positive macroeconomic signals for 2018, the Management Board of ACCENTRO Real Estate AG reaffi rms its forecasts at this time.
In the time since the start of the 2018 fi nancial year, there have been no material changes to the opportunities and risks relevant for the future business development. The Management Board is aware of no risks to the Company's going concern status. Accordingly, the disclosures made in the Opportunity and Risk Report of the Consolidated Financial Statements as of 31 December 2017 (annual report 2017, pp. 33+) continue to apply.
| ACCENTRO Real Estate AG | 30 June 2018 | 31 Dec. 2017 |
|---|---|---|
| Assets | TEUR | TEUR |
| Non-current assets | ||
| Goodwill | 17,776 | 17,776 |
| Down-payments on owner-occupied plots and buildings | 2,267 | 0 |
| Plant, equipment and EDP software | 369 | 223 |
| Non-current trade receivables | 2,277 | 2,477 |
| Non-current other receivables and other assets | 13,184 | 0 |
| Equity investments | 2,047 | 1,247 |
| Equity interests accounted for using the equity method | 6,488 | 264 |
| Deferred tax assets | 530 | 193 |
| Total non-current assets | 44,938 | 22,179 |
| Current assets | ||
| Inventory property | 320,290 | 304,027 |
| Trade receivables | 5,854 | 1,152 |
| Other receivables and other current assets | 10,237 | 11,568 |
| Current income tax receivables | 1,374 | 984 |
| Cash and cash equivalents | 26,820 | 7,875 |
| Total current assets | 364,576 | 325,605 |
| Total assets | 409,513 | 347,785 |
| ACCENTRO Real Estate AG | 30 June 2018 | 31 Dec. 2017 |
|---|---|---|
| Equity | TEUR | TEUR |
| Subscribed capital | 30,318 | 24,925 |
| Capital reserves | 60,836 | 53,462 |
| Retained earnings | 74,224 | 73,576 |
| Attributable to parent company shareholders | 165,378 | 151,963 |
| Attributable to non-controlling interests | 3,236 | 1,734 |
| Total equity | 168,613 | 153,697 |
| Liabilities | TEUR | TEUR |
| Non-current liabilities | ||
| Provisions | 17 | 17 |
| Financial liabilities | 38,006 | 42,439 |
| Bonds | 98,283 | 0 |
| Deferred income tax liabilities | 1,238 | 969 |
| Total non-current liabilities | 137,544 | 43,426 |
| Current liabilities | ||
| Provisions | 1,651 | 2,271 |
| Financial liabilities | 55,038 | 86,882 |
| Bonds | 1,563 | 12,065 |
| Advanced payments received | 13,544 | 19,613 |
| Current income tax liabilities | 11,112 | 14,591 |
| Trade payables | 5,415 | 2,236 |
| Other liabilities | 15,033 | 13,005 |
| Total current liabilities | 103,356 | 150,662 |
| Total equity and liabilities | 409,513 | 347,785 |
| ACCENTRO Real Estate AG | Q2 2018 01 April 2018 – 30 June 2018 |
Q2 2017 01 April 2017 – 30 June 2017 |
H1 2018 01 Jan. 2018 – 30 June 2018 |
H1 2017 01 Jan. 2017 – 30 June 2017 |
|---|---|---|---|---|
| TEUR | TEUR | TEUR | TEUR | |
| Revenues from sales of inventory property | 63,270 | 19,595 | 91,137 | 38,090 |
| Expenses from sales of inventory property | –58,348 | –13,382 | –77,612 | –27,511 |
| Capital gains from inventory property | 4,923 | 6,213 | 13,525 | 10,579 |
| Letting revenues | 2,555 | 1,883 | 4,970 | 3,826 |
| Letting expenses | –911 | –610 | –1,797 | –1,061 |
| Net rental income | 1,644 | 1,273 | 3,173 | 2,765 |
| Revenues from services | 1,393 | 415 | 1,815 | 768 |
| Expenses from services | –15 | –198 | –269 | –416 |
| Net service income | 1,378 | 217 | 1,546 | 352 |
| Other operating income | 663 | 690 | 889 | 1,289 |
| Gross profi t or loss | 8,607 | 8,393 | 19,132 | 14,985 |
| Total payroll and benefi t costs | –977 | –778 | –1,939 | –1,460 |
| Depreciation and amortisation of intangible assets and property, plant and equipment |
–45 | –21 | –80 | –48 |
| Other operating expenses | –1,642 | –1,272 | –2,765 | –2,277 |
| EBIT (earnings before interest and income taxes) | 5,944 | 6,322 | 14,349 | 11,200 |
| Net income from associates | 60 | 0 | 60 | 0 |
| Other income from investments | 9 | 0 | 18 | 0 |
| Interest income | 9 | 86 | 18 | 236 |
| Interest expenses | –3,092 | –1,871 | –5,786 | –3,902 |
| Net interest income | –3,083 | –1,785 | –5,769 | –3,667 |
| EBT (earnings before income taxes) | 2,931 | 4,537 | 8,658 | 7,533 |
| Income taxes | –1,122 | –1,743 | –2,913 | –1,778 |
| Consolidated income | 1,809 | 2,794 | 5,746 | 5,755 |
| thereof attributable to non-controlling interests | 16 | 22 | –56 | 52 |
| thereof attributable to shareholders of the parent company | 1,793 | 2,772 | 5,802 | 5,703 |
| EUR | EUR | EUR | EUR | |
|---|---|---|---|---|
| Basic net income per share (30,317,934 shares; prior year: 24,906,258 shares) |
0.06 | 0.11 | 0.19 | 0.23 |
| ACCENTRO Real Estate AG | H1 2018 01 Jan. 2018– 30 June 2018 |
H1 2017 01 Jan. 2017– 30 June 2017 |
|---|---|---|
| TEUR | TEUR | |
| Consolidated income (continuing and discontinued operations) | 5,746 | 5,120 |
| + Depreciation / amortisation of non-current assets |
80 | 48 |
| – / + Net income from associates carried at equity | –60 | 0 |
| + / – Increase / decrease in provisions | –619 | –1,083 |
| + / – Other non-cash expenses/income | 5 | 581 |
| + / – Interest expense/interest earned on purchase prices current assets | 0 | 0 |
| – / + Increase / decrease in trade receivables and other assets that are not attributable to investing or fi nancing activities |
–8,798 | –2,585 |
| + / – Increase / decrease in trade payables and other liabilities that are not attributable to investing or fi nancing activities |
–7,625 | 3,371 |
| – / + Income from disposal of investment property | 0 | 41 |
| + / – Other income tax payments | –7,655 | –621 |
| = Operating cash fl ow before de- / reinvestment in trading assets |
–18,927 | 4,872 |
| – / + Increase / decrease in inventories (trading properties) | –34,673 | –36,173 |
| = Cash fl ow from operating activities |
–53,600 | –31,301 |
| thereof continuing operation | –31,586 | |
| thereof discontinued operation | 284 | |
| + Proceeds from disposal of investment property (less costs of disposal) |
0 | 3,500 |
| + Interest received |
0 | 1 |
| – Cash outfl ows for investments in intangible assets |
–114 | –5 |
| – Cash outfl ows for investments in property, plant and equipment |
–2,381 | –41 |
| – Cash outfl ows for investments in investment property |
0 | –165 |
| – Cash outfl ows for investments in non-current assets |
–11,663 | –144 |
| + Cash received from distributions/sales of shares consolidated at equity |
60 | 223 |
| = Cash fl ow from investment activities |
–14,099 | 3,370 |
| thereof continuing operation | 34 | |
| thereof discontinued operation | 3,335 |
Continued on page 15
Continued from page 14
| ACCENTRO Real Estate AG | H1 2018 01 Jan. 2018– 30 June 2018 |
H1 2017 01 Jan. 2017– 30 June 2017 |
|
|---|---|---|---|
| TEUR | TEUR | ||
| – | Dividend payment | –5,154 | –3,731 |
| + | Payments from issuing bonds and raising (fi nancial) loans | 134,994 | 56,087 |
| – | Repayment of bonds and (fi nancial) loans | –36,384 | –43,343 |
| – | Interest paid | –1,430 | –2,346 |
| + | Interest received | 0 | 196 |
| + | Repayment of loans granted | 0 | 13,343 |
| = | Cash fl ow from fi nancing activities | 92,026 | 20,207 |
| thereof continuing operation | 20,207 | ||
| thereof discontinued operation | 0 | ||
| Net change in cash and cash equivalents | 24,326 | –7,725 | |
| + | Increase in cash and cash equivalents from investments in fully consolidated companies | 977 | 0 |
| – | Decrease in cash and cash equivalents from the disposal of fully consolidated companies | –6,358 | 0 |
| + | Cash and cash equivalents at the beginning of the period | 7,875 | 15,143 |
| = | Cash and cash equivalents at the end of the period | 26,820 | 7,418 |
| ACCENTRO Real Estate AG | Subscribed capital |
Capital reserve |
Retained earnings |
Non controlling interests |
Total |
|---|---|---|---|---|---|
| TEUR | TEUR | TEUR | TEUR | TEUR | |
| As of 1 January 2018 | 24,925 | 53,462 | 73,576 | 1,734 | 153,696 |
| Consolidated income | – | – | 5,802 | –56 | 5,746 |
| Other comprehensive income | – | – | 0 | 0 | 0 |
| Total consolidated income | – | – | 5,802 | –56 | 5,746 |
| Change in non-controlling interests | – | – | – | 1,557 | 1,557 |
| Convertible bonds converted | 5,393 | 7,375 | – | – | 12,768 |
| Dividend payment | – | – | –5,154 | – | –5,154 |
| As of 30 June 2018* | 30,318 | 60,837 | 74,224 | 3,235 | 168,613 |
* Adding the values of the individual line items may result in slight diff erences compared to the sum totals posted.
| ACCENTRO Real Estate AG | Subscribed capital |
Capital reserve |
Retained earnings |
Non controlling interests |
Total |
|---|---|---|---|---|---|
| TEUR | TEUR | TEUR | TEUR | TEUR | |
| As of 1 January 2017 | 24,734 | 53,180 | 57,164 | 1,758 | 136,836 |
| Consolidated income | – | – | 5,068 | 52 | 5,120 |
| Other comprehensive income | – | – | 0 | 0 | 0 |
| Total consolidated income | – | – | 5,068 | 52 | 5,120 |
| Changes in non-controlling interests | – | – | – | – | – |
| Convertible bonds converted | 172 | 258 | – | – | 430 |
| Dividend payment | – | – | –3,731 | – | –3,731 |
| As of 30 June 2017* | 24,906 | 53,438 | 58,501 | 1,810 | 138,656 |
* Adding the values of the individual line items may result in slight diff erences compared to the sum totals posted.
ACCENTRO Real Estate AG with its subsidiaries is a listed real estate company whose core business consists of trading residential real estate within the framework of housing privatisations. The Company's registered offi ce is located at Uhlandstr. 165 in 10719 Berlin, Germany. The Company shares are listed on the Frankfurt Stock Exchange for trading on the Regulated Market (Prime Standard).
As of 30 June 2018, ACCENTRO Real Estate AG acted as the operating holding company for a number of property vehicles.
These condensed consolidated interim fi nancial statements were approved for publication by the Company's Management Board in August 2018. The condensed consolidated interim fi nancial statements were not reviewed by an auditor.
It was decided not to include a statement of comprehensive income because there are no other eff ects recognised directly in equity that should be posted with the other comprehensive income.
The condensed consolidated interim fi nancial statements for the fi rst semester of the 2018 fi nancial year were prepared in accordance with the provisions of IAS 34 "Interim Financial Reporting" as adopted by the EU by way of a regulation. The condensed consolidated interim fi nancial statements should be read in conjunction with the consolidated fi nancial statement of ACCENTRO Real Estate AG for the year ended 31 December 2017.
The accounting policies applied in the condensed interim consolidated fi nancial statements are the same as those applied in the preparation of the consolidated fi nancial statements for the year ended on 31 December 2017.
All amounts posted in the balance sheet, income statement, cash fl ow statement, and statement of changes in equity, as well as in the notes and tabular overviews, are quoted in thousand of euros (TEUR), unless otherwise noted. Both individual and total fi gures represent values with the smallest rounding diff erence. Accordingly, minor diff erences may occur between the sum of the individual items posted and the reported totals.
As of 30 June 2018, the condensed consolidated interim fi nancial statements of ACCENTRO Real Estate AG included 25 subsidiaries, one joint venture, and four associates. Compared to the status of 31 December 2017 (28 subsidiaries, two joint ventures, two associates), the basis of consolidation expanded as the fi nancial year progressed to include four companies created for the privatisation unit and two associates by 30 June 2018. No business operations were taken over during that time. For seven companies, the fi nal consolidation was completed.
The internal reporting to the Management Board of ACCENTRO Real Estate AG does not include regional drilldowns or any other segmentation.
There were no related-party transactions during the reporting period.
The ACCENTRO Group employed 44 staff by the end of the semester. The number of employees at the same time a year ago was 38. The plan for the second half-year of 2018 is to keep expanding the workforce.
The fi rst six months of 2018 were characterised by unease on the capital markets over uncertainties concerning the political developments in Italy, the approaching Brexit and a looming trade war as well as concerns about rising interest rates. Germany's DAX stock index, having reached its highest score this year to date on 23 January 2018 with 13,596 points, dropped back to 11,726 points by 26 March 2018. But despite the muted economic expectations in Germany, the DAX rebounded and closed at 12,306 points on 29 June 2018, the last trading day of the fi rst half-year.
The ACCENTRO stock managed to steer clear of the trend during the fi rst six months and reached EUR 11.50, its highest price this year to date, on the last trading day.
The ACCENTRO share price was quoted at EUR 8.16 on the fi rst trading day of 2018 (Xetra). Although it proved impossible to maintain this level during the fi rst quarter of 2018, the share price rallied during the second quarter and rose to EUR 11.50 by 29 June 2018, the fi nal trading day of H1 2018. With a market capitalisation of EUR 348.7 million, this also represents the highest value of the fi rst half-year of 2018.
The average daily trading volume (Xetra) of ACCENTRO stock during the fi rst six months of 2018 was 5,178 units. Overall, 0.65 million shares of ACCENTRO Real Estate AG were traded in the Xetra trading system between 2 January and 29 June 2018. The rather low trading volume is mainly due to the fact that the Company's free fl oat equals a relatively low 5.95% of the total.
The market capitalisation of ACCENTRO AG rose by EUR 139.1 million during Q1 2018, growing from EUR 209.6 million to EUR 348.7 million. In addition to a 40% growth in share price, the conversion of the bulk of the 2014/2019 convertible bond issued in March 2014 proved to be decisive. This also explains the sharp increase of the stock in circulation by 5,393,031 units.
Given the massive increase in the number of units, the 40% hike of the share price during the fi rst half-year of 2018 is a reassuring sign.
By the close of Q2 2018, the subscribed capital of ACCENTRO Real Estate AG totalled EUR 30.32 million. It broke down into 30,317,934 no-par value bearer shares.
This is up from 24,924,903 shares and a share capital of EUR 24,924,903 at the start of the fi nancial year on 1 January 2018.
As of 30 June 2018, a total of 88.95% of the ACCENTRO AG stock was held by Brookline Real Estate S.à r.l., while ADLER Real Estate AG owned 5.10% of the shares and the free fl oat accounted for the remaining 5.95%.
| Stock market segment | Prime Standard |
|---|---|
| ISIN | DE000A0KFKB3 |
| German Securities Code Number (WKN) | A0KFKB |
| Number of shares on 30 June 2018 | 30,317,934 |
| Free fl oat | 5.95% |
| Highest price (1 January – 30 June 2018)* | EUR 11.50 |
| Lowest price (1 January – 30 June 2018)* | EUR 7.62 |
| Closing price on 29 June 2018* | EUR 11.50 |
| Market capitalisation on 29 June 2018* | EUR 348,656,241 |
* Closing prices in Xetra trading
In the 2018 fi nancial year as in previous years, regular disclosures and the dialogue with the capital market had a key priority. This year, ACCENTRO Real Estate AG will attend the following fi nancial analyst events:
The corporate development of ACCENTRO Real Estate AG is continuously monitored by analysts. The latest analyst assessments returned the following ratings for the ACCENTRO stock:
I hereby certify to the best of my knowledge, and in accordance with the applicable accounting principles, that the consolidated interim fi nancial statements of the half-year fi nancial report give a true and fair account of the assets, liabilities, fi nancial position, and profi t or loss of the Group, and that the Group interim management report includes a fair review of the development and performance of the Group's business and state of aff airs, together with a description of the principal opportunities and risks associated with the Group's prospective development for the remanining fi nancial year.
Berlin, 9 August 2018
Jacopo Mingazzini Management Board
| 6 September 2018 | SRC Forum Financials & Real Estate, Frankfurt am Main |
|---|---|
| 27 September 2018 | 7th Baader Investment Conference |
| 6 November 2018 | Quarterly Statement for the period 1 January – 30 September 2018 |
| 26 – 28 November 2018 | German Equity Forum, Frankfurt am Main |
| 11/12 December 2018 | Munich Capital Markets Conference, Munich |
All dates are provisional. For the fi nal dates, please check our website: www.accentro.ag.
This interim report contains specifi c forward-looking statements. A forward-looking statement is any statement that does not relate to historical facts and events. This applies, in particular, to statements relating to future fi nancial earning capacity, plans and expectations with respect to the business and management of ACCENTRO Real Estate AG, growth, profi tability and the general economic and regulatory conditions and other factors to which ACCENTRO Real Estate AG is exposed.
Forward-looking statements are based on current estimates and assumptions made by the company to the best of its knowledge. Such forward-looking statements are based on assumptions and are subject to risks, uncertainties and other factors that may cause the actual results including the net asset, fi nancial and earnings situation of ACCENTRO Real Estate AG to diff er materially from or disappoint expectations expressed or implied by these statements. The business activities of ACCENTRO Real Estate AG are subject to a number of risks and uncertainties that may also cause a forward-looking statement, estimate or prediction to become inaccurate.
This translation of the original German version of the Half-Year Financial Report of ACCENTRO Real Estate AG for the fi rst six months of the 2018 fi nancial year has been prepared for the convenience of our English-speaking shareholders.
The German version is authoritative.
Our fi nancial reports are also available as downloads at www.accentro.ag or may be requested free of charge by writing to ACCENTRO Real Estate AG, Uhlandstr. 165, 10719 Berlin, Germany.
ACCENTRO Real Estate AG Uhlandstr. 165 10719 Berlin, Germany Phone: +49 (0)30 887 181 - 0 Telefax: +49 (0)30 887 181 - 11 E-Mail: [email protected] Home: www.accentro.ag
Jacopo Mingazzini
Axel Harloff , Hamburg
ACCENTRO Real Estate AG Investor & Public Relations Phone: +49 (0)30 887 181 - 799 Telefax: +49 (0)30 887 181 - 779 E-Mail: [email protected]
Goldmund Kommunikation, Berlin www.goldmund-kommunikation.de
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