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Accentro Real Estate AG

Quarterly Report Feb 12, 2013

12_10-q_2013-02-12_bb7c6890-a9aa-4ac7-9d11-4336a28237c8.pdf

Quarterly Report

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Half-Year Financial Report

1 July 2012 – 31 December 2012

Overview Key Financial Data

ESTAVIS AG 2nd quarter 12/13
1 Oct. 2012 –
31 Dec. 2012
2nd quarter 11/12
1 Oct. 2011 –
31 Dec. 2011
1st half-year 12/13
1 July 2012 –
31 Dec. 2012
1st half-year 11/12
1 July 2011 –
31 Dec. 2011
Revenues and earnings TEUR TEUR TEUR TEUR
Revenues 9,711 19,943 18,040 28,630
Total operating performance 9,476 16,175 19,870 26,113
EBIT –35 1,458 17 2,548
Pre-tax profit –876 529 –2,614 596
Net profit –842 398 –2,670 423
ESTAVIS AG 31 December2012 30 June 2012
Structure of assets and capital TEUR TEUR
Non-current assets 80,635 80,859
Current assets 73,370 96,406
Equity 55,941 59,048
Equity ratio 36.3% 33.3%
Total assets/equity and liabilities 154,005 177,264

ESTAVIS AG

Prime Standard
DE000A0KFKB3
A0KFKB
14,759,352
44.2%
2.06 EUR
1.62 EUR
1.80 EUR
EUR 26.6 million

* Closing prices in Xetra trading

Content

  • 3 Letter to the Shareholders
  • 5 The ESTAVIS Share
  • 7 Interim Management Report
  • 12 Consolidated Balance Sheet
  • 14 Consolidated Income Statement
  • 15 Consolidated Statement of Comprehensive Income
  • 16 Consolidated Cash Flow Statement
  • 17 Consolidated Statement of Changes in Equity
  • 18 Selected Disclosures on Condensed Consolidated Interim Financial Statements
  • 23 Responsibility Statement
  • 24 Financial Calendar
  • 24 Forward-looking Statements
  • 25 Credits

Dear Shareholders, Dear Ladies and Gentlemen,

Since the start of the 2012/13 financial year, we have consistently pushed the reorientation of ESTAVIS forward, and did clear important mile stones in the strategic business areas "Portfolio" and "Trade." In the "Portfolio" segment, we expanded our residential real estate portfolio substantially by making several acquisitions. Since we concentrated on properties that will generate positive contributions to operating income from the start, our investments have simultaneously created the basis for stable long-term earnings, a considerable improvement of results, and continued growth.

In the "Trade" segment, our subsidiary Accentro GmbH concluded the 2012 year with recordbreaking sales figures, making it the most successful year in its history. It sold a total of 1,137 apartments, which implies a year-on-year increase by 23%. This brought brokered property sales to a total amount of EUR 85.3 million, up from EUR 66.5 million in 2011. Worth noting is the fact that the share of foreign buyers in Berlin has remained at a high level of 30%, and that more than two thirds of the apartments sold were occupied, thus being acquired as investment rather than for owner-occupation. The high share of foreign investors suggests that Accentro GmbH operates on a market that attracts financiers from far beyond the border. Main motives for the keen investor interest in occupied apartments include the desire to exploit the brisk boom cycle in Berlin, and the need to shelter some of the own assets from the turbulences on the world's capital markets. With its sales competences, Accentro GmbH benefits from these positive parameters.

For ESTAVIS Group as a whole, the current economic and real estate market development create a persistently positive environment. On the one hand, the lively interest among private and institutional investors in commitments marked by long-term stability of value and relatively low exposure to inflation is likely to continue throughout the coming months. On the other hand, the residential letting market is less susceptible to possible economic downtrends than the commercial real estate markets is, for instance.

At first glance, our financials fail to reflect the auspicious developments in our two strategic business areas, for we did end the first semester of our 2012/13 financial year with a negative result. Compared to the first three months, however, we drastically reduced our losses in the course of the second quarter. One main aspect that impacted the result of Q1 was the premature repayment of a mezzanine loan. The current impairment of our result is offset, however, by the relief effect that we may expect to see in the upcoming quarterly reporting periods due to our optimised financing structure. Moreover, ESTAVIS has made good progress in winding up the discontinued activities in the project development sector, and actually sold off all relevant properties except for one minor asset.

More than in the result, though, the positive effects of the strategic realignment manifest themselves in the turnover and margin growth. This is true for the handsome growth of our privatisation revenues as much as for the increasing contribution to operating income we derive from letting the properties of our proprietary portfolio. In the weeks and months to come, we will work hard to drive this development forward by continuing to expand our proprietary portfolio and our activities in the area of apartment retailing.

Outlook for the 2012/13 financial year

The swift wind-up of the encumbrances resulting from the discontinued activities in the project development sector as reflected in the annual account for 2011/12 and in the first semester of the 2013/13 financial year, and the auspicious development in our two strategic business areas "Portfolio" and "Trade," give us reason to assume that the result will improve significantly as early as the third quarter of the 2012/13 financial year. Also, we expect to achieve a clearly positive result by the end of the 2012/13 financial year as a whole.

The Management Board

Andreas Lewandowski Jacopo Mingazzini

Member of the Management Board Member of the Management Board

The ESTAVIS Share

ESTAVIS shares are listed on the Regulated Market of the Frankfurt Stock Exchange, and meet the transparency requirements of the Prime Standard.

ESTAVIS' share price performance

During the second semester of 2012, the DAX developed rather handsomely. Although the persistent debt crisis in the Eurozone and the recession in some European countries continue to impact the stock markets, thereby creating a latent sense of uncertainty, the relatively stable situation of the German economy when compared to other national economies in Europe provided the basis for a clear upward trend of the DAX while inspiring an optimistic sentiment among many market players.

The ESTAVIS share was initially unable to benefit from the stock market rally. Instead, it lost a total of 12.7% during the first semester of the 2012/13 financial year. At the start of the financial year on 2 July 2012, the price for ESTAVIS shares in the Xetra trading of the Frankfurt Stock Exchange stood at EUR 2.06. In the following months, the share price actually dropped as low as EUR 1.62 for a time. It recovered toward the end of the year, and the closing rate on the last trading day of the reporting period, 28 December 2012, was EUR 1.80. At the time, the market capitalisation of ESTAVIS AG equalled approximately EUR 26.57 million. The daily trading volume averaged 13,575 shares.

After the end of the reporting period, the first weeks of the third quarter of the financial year saw a continuation of the upward trend of the ESTAVIS shares:

  • Close Brothers Seydler Research AG, recommendation: "Buy", target price EUR 2.50
  • Warburg Research, recommendation: "Hold", target price EUR 2.00
  • WestLB, recommendation: "Buy", target price EUR 2.40

ESTAVIS share price development from 1 July to 31 December 2012

ESTAVIS shares at a glance

ESTAVIS AG
Share
Stock exchange segment Prime Standard
ISIN DE000A0KFKB3
German Securities Code Number (WKN) A0KFKB
Number of shares on 31 December 2012 14,759,352
Free fl oat (information according to last notifi cation from investors) 44.2 %
Share price high (1 July – 31 December 2012*) 2.06 EUR
Share price low (1 July – 31 December 2012*) 1.62 EUR
Closing price on 28 December 2012* 1.80 EUR
Market capitalisation on 31 December 2012* EUR 26.6 million

* Closing prices in Xetra trading

1 Business and Conditions

1.1 Economic environment and business performance

During the reporting period, the economic situation in Germany noticeably slowed, according to an estimate of the DIW German Institute for Economic Research. While the German gross domestic product (GDP) still grew by 0.2% during the first quarter of the 2012/13 financial year, the economic output declined by 0.4% during the second quarter. The reasons cited by the survey include the persistent European debt crisis and the sense of uncertainty among many financial market players regarding the future of the Euro. For the year 2012 as a whole, the Federal Statistical Office quoted an inflation-adjusted economic growth of 0.7%, which is a sound result compared to other countries in Europe. Economic growth drivers in Germany included primarily the external contribution (+1.1%) as well as public and private consumption (+1.0% and +0.8%, respectively). Investments, by contrast, declined.

In 2013, DIW expects to see a slight increase in GDP growth up to 0.9%. The institute assumes that the German economy will gather momentum following a slow start into the year. Perhaps the most positive factor is the rising demand for German products in emerging countries. This forecast is backed by the ifo business climate index, which perked up again in November and December 2012 after having dropped for six consecutive months.

The German labour market remained rather robust in 2012. According to figures released by the Federal Statistical Office, the number of gainfully employed persons rose by more than 400,000 to 41.5 million in the annual mean, which is the highest level since the German reunification in 1990. Then again, the increase in gainful employment during the reporting period was not quite as dynamic as it had been during the first semester of 2012. The obvious reason to explain this is the deteriorated economic situation. The number of jobless dropped to an average of 2.34 million, a decrease by 162,000 persons or 6.5%. DIW believes that the labour market situation will remain stable in 2013.

Germany's residential real estate investment market developed rather handsomely during the second quarter of the 2012/13 financial year. The transaction volume equalled EUR 2.74 billion, according to BNP Paribas Real Estate. All things considered, EUR 11.4 billion worth of residential portfolios changed hands in 2012. This represents the highest figure since the boom year of 2007, and a year-on-year increase by 91%. This high annual volume was essentially generated by several very large transactions in the billion-euro range.

During the first six months of the 2012/13 financial year, the implementation of the strategic realignment took chief priority for ESTAVIS Group. This is reflected both in the successful development of the privatisation of proprietary holdings and the brokerage business, on the one hand, and the management and continued expansion of the proprietary portfolio, on the other hand. The positive contributions from these three areas were offset by encumbrances in the context of the discontinued project development activities, as well as by the effects of the premature repayment of a mezzanine financing, all of which factors combined to produce a negative semi-annual result. However, the loss was substantially reduced quarter on quarter during the second quarter.

The Group continued to pursue the setup and expansion of a high-yield proprietary portfolio by way of acquiring additional residential real estate portfolios with positive cash-flow during the reporting period. In line with these efforts, ESTAVIS secured an option on the acquisition of a large residential real estate portfolio in Berlin in late September.

1.2 Earnings situation

The revenues of ESTAVIS Group during the first quarter of the 2012/13 financial year came to EUR 18.0 million, after EUR 28.6 million during the same period last year.

Broken down for financial reporting purposes, revenues for continued operations were attributable to the company's following business segments:

Trade: EUR 13.9 million (prior-year period: EUR 24.8 million)
thereof
privatisation: EUR 9.1 million (prior-year period: EUR 5.9 million)
other trade: EUR 4.8 million (prior-year period: EUR 18.9 million)
Portfolio: EUR 4.1 million (prior-year period: EUR 3.8 million)

Transactions in the "Trade" segment experienced an overall decline as the activities in the project development and listed properties sectors were being wound up ("Other Trade"). In line with its strategic reorientation that the Group initiated in 2012, the turnover from these activities has steadily lost in significance, and contributed just over one third of the revenues of the "Trade" segment, whereas the major share of the segment turnover – about two thirds – is now generated by the privatisation business. The increase in revenues in the "Portfolio" segment is explained by the expansion of the proprietary portfolio since the same period last year and the simultaneous sale of smaller, unprofitable properties.

The other operating income amounted to EUR 0.7 million (first semester 2011/12: EUR 0.4 million).

Changes in inventories added up to EUR 1.2 million, having totalled EUR –3.2 million at the end of the first six months of the previous financial year.

During the reporting period, the gross margin (turnover plus changes in inventories less cost of materials/turnover) was 28.6% (previous year: 34.9%). The overall decline in margins compared to the prior-year period is explained by encumbrances in the context of the project developments that are being phased out. In the two strategic business areas of, on the one hand, the expansion and management of the proprietary portfolio, and housing privatisation, on the other hand, the registered margin trend was clearly more positive in some aspects. For instance, the margin for privatisation activities in the "Trade" segment equalled 35.1%, while the gross margin for letting activities in the "Portfolio" segment was 65.7%.

The total operating performance dropped from EUR 26.1 million to EUR 19.9 million during the first six months.

The cost of materials decreased slightly from EUR 15.5 million to EUR 14.0 million year on year.

Staff expenses during the period under review came to EUR 1.1 million after EUR 1.6 million in the same period of the previous year. The drop reflects essentially the substantial year-onyear downscaling of the workforce on the Group's payroll.

At EUR 4.7 million, the other operating expenses undercut the figure of the corresponding prior-year period (EUR 6.4 million).

Earnings before interest and taxes (EBIT) amounted to EUR 0.02 million (previous year: EUR 2.5 million).

The financial result in the period under review equalled EUR –2.6 million after EUR –2.0 million in the same period of the previous year. The decline is explained, among other reasons, by an early termination fee over EUR 0.5 million in connection with the premature repayment of a mezzanine loan.

With income taxes in the amount of EUR 0.06 million taken into account, the consolidated net profit equalled EUR –2.7 million (prior-year period: EUR 04. million), of which EUR –0.8 Million must be allotted to the second quarter of the financial year. This equals EUR –0.18 in earnings per share (previous year: EUR 0.03) in the first semester.

1.3 Financial and assets position

The total assets of the ESTAVIS Group as of 31 December 2012 decreased by EUR 23.3 million or 13.1% to EUR 154.0 million (30 June 2012: EUR 177.3 million).

The decline in assets is explained primarily by the decrease in inventories, accounts receivable, cash and cash equivalents, and non-current assets held for sale. The inventories declined from EUR 56.4 million to EUR 49.4 million, whereas cash and cash equivalents dropped from EUR 10.9 million down to EUR 3.4 million. While the value of non-current assets held for sale had equalled EUR 3.9 million by the balance sheet date of the previous financial year, no such assets were held by the end of the reporting period. The decrease in inventories is explained primarily by the disposal of project developments in conjunction with the strategic reorientation, whereas the drop in cash and cash equivalents, which had considerably increased by the end of the previous financial year through the inflow of the issuing proceeds of the convertible debenture issued in June 2012, is essentially due to the premature repayment of the mezzanine loan as well as to the repayment of other financings of inventories.

Financial liabilities, which mainly relate to liabilities to banks, decreased by a total of EUR 14.6 million to EUR 63.3 million (30 June 2012: EUR 77.8 million), the decline being primarily due to the premature repayment of the mezzanine loan.

At EUR 55.9 million, the company equity was slightly lower than by the reporting date of the previous financial year (30 June 2012: EUR 59.0 million).

The reduction in total assets meant that ESTAVIS Group's equity ratio increased from 33.3% as of 30 June 2012 to 36.3% as of 31 December 2012.

Gearing (debt/total capital) declined from 66.7% to 63.7%. The ratio of cash and cash equivalents to total assets amounted to 2.2% at the end of the period under review (30 June 2012: 6.16%). The cash ratio of ESTAVIS Group (cash and cash equivalents/current liabilities) came to 5.7% as of 31 December 2012 (30 June 2012: 12.9%).

During the reporting period, net cash from operating activities amounted to EUR –5.2 million (previous year: EUR –1.3 million).

Net cash used in financing activities amounted to EUR –6.2 million during the reporting period (previous year: EUR –0.2 million).

During the first semester of the 2012/13 financial year, the cash flow from financing activities amounted to EUR 3.8 million (previous year: EUR –0.4 million).

2 Risk Report

The ESTAVIS Group has implemented a risk management system that is designed for several purposes, including allowing the early recognition and appropriate communication of significant risk factors arising from its business activities that could be of relevance to its earnings situation or continued existence. The risk management system allows action to be taken against potentially adverse developments and events in a timely manner, and facilitates, where required, the implementation of countermeasures before any significant damage is incurred.

There have been no significant revisions to the risks for ESTAVIS Group in the period under review compared to the Risk Report in the Group Management Report for the previous financial year of 2011/12. Accordingly, reference should be made to the information contained therein.

3 Forecast Report

The activities of the ESTAVIS Group during the months to come will focus, on the one hand, on the continued setup and expansion of the proprietary portfolio and, on the other hand, on the area of housing privatisation. With a view to the swift wind-up of the encumbrances resulting from the discontinued project development activities, on the one hand, and given the progress made in the implementation of the new corporate strategy, on the other hand, the Management Board expects the result to improve significantly, starting with Q3 of the 2012/13 financial year.

Moreover, the stable and positive contributions to operating income that are to be expected in conjunction with the then-as-now very auspicious business trend in housing privatisation make it reasonable to anticipate a clearly positive result both for the 2012/13 financial year as a whole and for the financial years thereafter.

4 Supplementary Report

In January 2013, meaning after the reporting period that ended 31 December 2012, the Management Board of ESTAVIS AG decided in favour of two capital increases and, with the approval of the Supervisory Board, implemented these. On the one hand, a total of 1,291,667 new shares were issued from the authorised capital against a cash contribution of TEUR 2,325. On the other hand, a total of 2,007,919 new shares were issued from the authorised capital against a non-cash contribution. In return for the latter, ESTAVIS received 94% of the equity contributions of a limited partnership that holds a real estate portfolio consisting of 177 housing units in Bernau near Berlin, and a claim against this same limited partnership. Both capital increases were entered into the commercial register on 1 February 2013.

Consolidated Balance Sheet

31 Dec. 2012
ESTAVIS AG
30 June 2012
Assets TEUR TEUR
Non-current assets
Goodwill 17,776 17,776
Other intangible assets 83 85
Property, plant and equipment 267 298
Investment property 57,490 57,490
Investments in associates 122 122
Other non-current financial assets 1,636 1,737
Deferred income tax receivables 3,262 3,352
Total 80,635 80,859
Current assets
Inventories 49,390 56,411
Trade receivables 3,510 4,520
Other receivables 16,179 19,909
Current income tax receivables 932 800
Cash and cash equivalents 3,359 10,915
Assets held for sale 0 3,850
Total 73,370 96,406
Total assets 154,005 177,264

Consolidated Balance Sheet

ESTAVIS AG 31 Dec. 2012 30 June 2012
Equity TEUR TEUR
Issued capital 14,524 14,319
Capital reserves 41,523 40,909
Special reserves from non-cash contributions 0 1,053
IAS 39 reserve 0 0
Retained earnings –106 2,766
Total equity 55,941 59,048
Liabilities
Non-current liabilities
Provisions 64 64
Financial liabilities 37,060 30,956
Deferred income tax liabilities 2,426 2,463
Total non-current liabilities 39,550 33,482
Current liabilities
Provisions 1,869 2,319
Financial liabilities 26,201 46,871
Advance payments received 20,813 15,196
Current income tax liabilities 1,448 1,491
Trade payables 3,183 13,246
Other liabilities 5,001 5,612
Total current liabilities 58,515 84,734
Total equity and liabilities 154,005 177,264

Consolidated Income Statement

ESTAVIS AG 2nd Quarter 12/13
1 Oct. 2012 –
31 Dec. 2012
2nd Quarter 11/12
1 Oct. 2011 –
31 Dec. 2011
1st half-year 12/13
1 July 2012 –
31 Dec. 2012
1st half-year 11/12
1 July 2011 –
31 Dec. 2011
TEUR TEUR TEUR TEUR
Revenues 9,711 19,943 18,040 28,630
Change in value of investment property 0 240 0 240
Other operating income 436 315 669 406
Changes in inventories –671 –4,323 1,161 –3,162
Total operating performance 9,476 16,175 19,870 26,113
Cost of materials 6,606 9,744 14,041 15,471
Staff costs 570 830 1,103 1,629
Depreciation and amortisation 29 35 59 67
Other operating expenses 2,305 4,108 4,652 6,398
Operating result –35 1,458 17 2,548
Net income from associates 0 0 0 0
Interest income 34 61 68 84
Interest expenses 875 990 2,698 2,036
Financial result –841 –929 –2,630 –1,952
Net profit before income taxes –876 529 –2,614 596
Income taxes –33 131 57 173
Net profit –842 398 –2,670 423
Earnings per share (EUR) –0.06 0.03 –0.18 0.03

Consolidated Statement of Comprehensive Income

ESTAVIS AG 2nd Quarter 12/13
1 Oct. 2012 –
31 Dec. 2012
2nd Quarter 11/12
1 Oct. 2011 –
31 Dec. 2011
1st half-year 12/13
1 July 2012 –
31 Dec. 2012
1st half-year 11/12
1 July 2011 –
31 Dec. 2011
TEUR TEUR TEUR TEUR
Net profit –842 398 –2,670 423
Available-for-sale financial assets 0 –1 0 –1
Changes in fair value 0 –1 0 –1
Reclassification recognised in profit or loss 0 0 0 0
Income taxes 0 0 0 0
Income directly recognized in equity 0 –1 0 –1
Total comprehensive income –842 397 –2,670 422

Consolidated Cash Flow Statement

ESTAVIS AG 1st half-year 12/13
1 July 2012 –
31 Dec. 2012
1st half-year 11/12
1 July 2011 –
31 Dec. 2011
TEUR TEUR
Net profit –2,670 423
+ Depreciation/amortisation of non-current assets 59 67
+/– Increase/decrease in provisions –450 777
+/– Change in value of investment property 0 –240
+/– Other non-cash expenses/income 1 1
–/+ Gains/losses from the disposal of non-current assets 0 0
–/+ Increase/decrease in inventories, trade receivables and other assets that are not
attributable to investing or financing activities
11,820 –609
+/– Increase/decrease in trade payables and other liabilities that are not attributable to
investing or financing activities
–13,985 –1,743
= Cash flow from current operating activities –5,227 –1,323
+ Payments received from the disposal of investment property 3,850 0
+ Payments received for the disposal of financial assets 0 15
Payments for investments in intangible assets –12 –10
Payments for investments in property, plant and equipment –14 –214
Payments for investment property –10,000 –15
= Cash flow from investing activities –6,176 –224
Payments for shareholders –437 0
+ Payments from the issuance of bonds and financial loans 8,042 0
Repayment of bonds and financial loans –3,759 –371
= Cash flow from financing activities 3,846 –371
Net change in cash and cash equivalents –7,556 –1,919
+ Cash and cash equivalents at the beginning of the period 10,915 3,598
= Cash and cash equivalents at the end of the period 3,359 1,680

Consolidated Statement of Changes in Equity

for the financial year from 1 July 2012 to 31 December 2012

ESTAVIS AG Issued
capital
Capital
reserves*
IAS 39
reserve
Retained
earnings
Total
TEUR TEUR TEUR TEUR TEUR
As of 1 July 2012 14,319 41,963 2,766 59,048
Total comprehensive income 0 –2,670 –2,670
Non-cash contribution made 440 –440 0
Repurchase of company shares –235 –201 –437
As of 31 December 2012 14,524 41,523 0 –106 55,941

* including special reserves from non-cash contributions as of 1 July 2012 as reported in the balance sheet.

Consolidated Statement of Changes in Equity

for the financial year from 1 July 2011 to 31 December 2011

ESTAVIS AG Issued
capital
Capital
reserves
IAS 39
reserve
Retained
earnings
Total
TEUR TEUR TEUR TEUR TEUR
As of 1 July 2011 14,319 48,198 1 –1,819 60,699
Total comprehensive income –1 423 422
As of 31 December 2011 14,319 48,198 0 –1,396 61,121

Selected Disclosures on Condensed Consolidated Interim Financial Statements

1 Basic Information

ESTAVIS AG with its subsidiaries is active both as property portfolio holder and property trader.

The company is based in Berlin, Germany. The company's shares are listed on the Frankfurt Stock Exchange for trading on the Regulated Market (Prime Standard).

On 31 December 2012, ESTAVIS AG acted as operating holding company for numerous special purpose entities.

These condensed consolidated interim financial statement were approved for publication by the company's Management Board in February 2013. The condensed consolidated interim financial statements were not checked by an auditor or subjected to review.

2 Significant Accounting Policies

The condensed consolidated interim financial statements for the second quarter of the 2012/13 financial year, which ended on 31 December 2012, were prepared in accordance with the provisions of IAS 34 "Interim Financial Reporting" as adopted by the EU by way of ordinance. The condensed consolidated interim financial statements should be read in conjunction with the most recent consolidated financial statements of ESTAVIS AG for the year ended 30 June 2012.

With the following exceptions, the accounting policies applied in the condensed interim consolidated financial statements are the same as those applied in the preparation of the most recent consolidated financial statements for the year ended 30 June 2012.

The current financial year is the first year in which the application of the following standards has become mandatory:

Standard/Interpretation
IAS 1 Amendment: Presentation of Individual Items of Other Comprehensive Income

This did not result in any changes to the financial reporting for the ESTAVIS AG consolidated financial statements. No regulations were applied early.

With a view to the increasing significance of the privatisation business and, conversely, the declining significance of the trade in listed real estate which is being wound up, the "Trade" segment, which covers both business lines, was divided into the sub-segments "Privatisation" and "Other Trade." The split of the "Trade" segment was not retrospectively applied to the previous year's figures. The segment data for the first quarter of the ongoing financial year are supplemented according to the new representation model.

In the consolidated financial statements as of 30 June 2012, the rental income from inventory properties was for the first listed among the revenues and the corresponding operating costs among the material costs. The previous year's figures listed in this interim financial statement have been adjusted accordingly.

All amounts posted in the balance sheet, income statement, consolidated statement of comprehensive income, statement of changes in equity and cash flow statement, as well as in the notes and tabular overviews, are quoted in thousands of euro (TEUR), unless otherwise noted. Both individual and total figures represent the value with the smallest rounding difference. Small differences can therefore occur between the sum of the individual values represented and the reported totals.

3 Consolidated Group

As of 31 December 2012, the condensed interim consolidated financial statements of ESTAVIS AG included 42 subsidiaries and one associate. The status quo of the consolidated group as of 30 June 2012 remained unchanged during the first half year of the ongoing financial year.

4 Supplementary Notes to the Individual Items of the Interim Financial Statements

4.1 Segment informations

Quarter on quarter, the segment results for the first quarter of the 2012/13 financial year, with the segments split into sub-segments, present themselves as shown below:

Trade Portfolio Group
Total Privatisation Other trade
2012/13 2012/13 2012/13 2011/12 2012/13 2011/12 2012/13 2011/12
TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR
Revenues
(external only)
6,438 3,956 2,482 7,630 1,892 1,058 8,330 8,687
thereof Letting 442 265 177 310 1,231 992 1,673 1,302
thereof Privatisation
Sales 1,957 1,957 714 1,957 714
Brokerage 1,735 1,735 1,257 1,735 1,257
thereof other sales 2,304 2,304 5,349 661 65 2,965 5,414
Revenues (internal only)
Segment result –43 1,081 –1,124 745 94 346 51 1,091
Net income from invest
ments carried at-equity
0 0 0 0
Financial result –1,219 –264 –956 –551 –570 –471 –1,789 –1,023
Net profit before
income taxes
–1,262 817 –2,080 194 –476 –125 –1,738 68

The cost distribution among the segments was corrected for the first quarter. This diminished the operating result, or the earnings before taxes, respectively, of the "Portfolio" segment by TEUR 340, while that of the "Trade" segment increased by a corresponding amount. Also corrected was the allocation of one property, which resulted in corresponding minor adjustments in the "Trade" and "Portfolio" segments. This has caused the earnings before taxes to shift by TEUR 5 in favour of the "Trade" segment.

Due to the changed listing of the rental income from inventory properties, the adjustment of the previous year's turnover in the "Trade" segment was corrected upward by TEUR 166, as were the total turnover by a corresponding amount. The other operating income of the previous year decreased by a corresponding amount, so that the operating result of the same period last year remains unaffected by this adjustment.

Trade Portfolio Group
Total Privatisation Other trade
2012/13 2012/13 2012/13 2011/12 2012/13 2011/12 2012/13 2011/12
TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR
Revenues
(external only)
7,456 5,117 2,339 17,188 2,255 2,754 9,711 19,943
thereof Letting 378 232 146 418 1,140 1,039 1,518 1,457
thereof Privatisation
Sales 3,181 3,181 1,554 3,181 1,554
Brokerage 1,703 1,703 2,150 1,703 2,150
thereof other sales 2,194 2,194 13,066 1,115 1,715 3,309 14,781
Revenues (internal only)
Segment result 138 1,102 –964 550 –172 907 –35 1,458
Net income from invest
ments carried at-equity
0 0 0 0
Financial result –473 –177 –295 –499 –369 –431 –841 –929
Net profit before
income taxes
–335 925 –1,259 51 –541 476 –876 529

Quarter on quarter, the segment results for the second quarter of the 2012/13 financial year present themselves as shown below:

Trade Portfolio Group
Total Privatisation Other trade
2012/13 2012/13 2012/13 2011/12 2012/13 2011/12 2012/13 2011/12
TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR
Revenues
(external only)
13,894 9,073 4,821 24,818 4,147 3,812 18,040 28,630
thereof Letting 820 497 323 728 2,371 2,031 3,191 2,759
thereof Privatisation
Sales 5,138 5,138 2,268 5,138 2,268
Brokerage 3,438 3,438 3,407 3,438 3,407
thereof other sales 4,498 4,498 18,415 1,776 1,780 6,274 20,195
Revenues (internal only)
Segment result 95 2,183 –2,088 1,295 –78 1,253 17 2,548
Net income from invest
ments carried at-equity
0 0 0 0
Financial result –1,692 –441 –1,251 –1,050 –939 –902 –2,630 –1,952
Net profit before
income taxes
–1,597 1,742 –3,339 245 –1,017 351 –2,614 596

Year on year, the segment results for the first semester of the 2012/13 financial year present themselves as shown below:

The financial result of the first quarter is burdened with an early termination fee of TEUR 535 for the premature repayment of a mezzanine financing. The expense was accounted for in the "Trade" segment, and there in the sub-segment "Other Trade." The change in value of investment property in the amount of TEUR 240 that was posted for the second quarter of the previous year is listed as income among the results of the "Portfolio" segment.

4.2 Related party transactions

Mr Florian Lanz, the former CEO of ESTAVIS AG (until 17 April 2012), and Mr Eric Mozanowski, former member of the Management Board of ESTAVIS AG (until 31 December 2011), assumed guarantees for loans granted to ESTAVIS Group. By the reporting date, the guarantee volumes amounted to TEUR 2,000 in the case of Mr Lanz, and to TEUR 1,000 in the case of Mr Mozanowski. It has been agreed to pay remuneration equal to 5% p.a. and 1% p.a., respectively.

Above and beyond this, there were no significant new related party transactions, nor were any of the related party transactions reported in the notes to the consolidated financial statements for the 2011/12 financial year changed or derecognised.

4.3 Employees

The ESTAVIS Group employed 28 staff by the end of the quarter. During the same quarter last year, there was a workforce of 49. On average, 42 staff were on the Group's payroll during the past financial year.

4.4 Events after the reporting date

In January 2013, ESTAVIS AG went ahead with 2 capital increases. A total of 1,291,667 new shares were issued from the authorised capital against a cash contribution of TEUR 2,325. A total of 2,007,919 new shares were issued from the authorised capital against a non-cash contribution. Object of the non-cash contribution were 94% of the equity contributions of a limited partnership that holds a real estate portfolio consisting of 177 housing units in Bernau near Berlin, and a claim against this same limited partnership. Both capital increases were entered into the commercial register on 1 February.

Responsibility Statement

of ESTAVIS AG in accordance with § 37y of the Securities Trade Act in conjunction with § 37w, clause 2, item 3 of the Securities Trade Act.

I state to the best of my knowledge that in accordance with the applicable auditing principles for interim reporting the Interim Consolidated Financial Statements convey an accurate picture of the Group assets, financial situation and earnings, and that the course of business including net operating profit and the condition of the Group are portrayed in the Group Interim Management Report in such a way as to convey a true and fair view, and the key opportunities and risks concerning the anticipated development of the Group in the remainder of the financial year are set out.

Berlin, 11 February 2013

Andreas Lewandowski Jacopo Mingazzini

Member of the Management Board Member of the Management Board

Financial Calendar

2013
27 February 2013 Annual General Meeting, Berlin
13 May 2013 Quarterly report – 3rd quarter / Nine months 2012/13

All dates are provisional. Please check our website www.estavis.de for confirmation.

Forward-looking Statements

This interim report contains specific 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 financial earning capacity, plans and expectations with respect to the business and management of ESTAVIS, growth, profitability and the general economic and regulatory conditions and other factors to which ESTAVIS 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, financial and earnings situation of ESTAVIS to differ materially from or disappoint expectations expressed or implied by these statements. The operating activities of ESTAVIS are subject to a number of risks and uncertainties that may also cause a forwardlooking statement, estimate or prediction to become inaccurate.

This translation of the original German version of the interim report has been prepared for the convenience of our English-speaking shareholders. The German version is authoritative.

Credits

ESTAVIS AG Uhlandstr. 165 10719 Berlin Germany Phone: +49 (0)30 887181-0 Telefax: +49 (0)30 887181-11 E-Mail: [email protected] Home: www.estavis.de

Management Board

Andreas Lewandowski, Jacopo Mingazzini

Chairman of the Supervisory Board

Dr. Karl-Josef Stöhr, Berlin

Contact

ESTAVIS AG Investor & Public Relations Phone: +49 (0)30 887181-799 Telefax: +49 (0)30 887181-779 E-Mail: [email protected]

Concept and editing

Goldmund Kommunikation, Berlin www.goldmund-kommunikation.de

Layout and design

Power-DesignThing GmbH www.derthing.de

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