Quarterly Report • Aug 16, 2016
Quarterly Report
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1 January – 30 June 2016
| 1st half-year 2016 1 January 2016 – |
1st half-year 2015 1 January 2015 – |
|||
|---|---|---|---|---|
| ACCENTRO Real Estate AG | 30 June 2016 | 30 June 2015 | ||
| Income statement | TEUR | TEUR | ||
| Gross profi t | 23,045 | 34,702 | ||
| EBIT | 19,049 | 30,463 | ||
| EBT | 12,714 | 23,247 | ||
| Consolidated income | 7,350 | 20,039 |
| ACCENTRO Real Estate AG | 30 June 2016 | 31 December 2015 |
|---|---|---|
| Balance sheet ratios | TEUR | TEUR |
| Non-current assets | 185,098 | 189,594 |
| Current assets | 198,734 | 188,462 |
| Equity | 116,613 | 109,241 |
| Equity ratio | 29.7 % | 27.6 % |
| Total assets | 393,238 | 395,205 |
| Company shares | |
|---|---|
| Stock market segment | Prime Standard |
| ISIN | DE000A0KFKB3 |
| German Securities Code Number (WKN) | A0KFKB |
| Number of shares on 30 June 2016 | 24,687,130 |
| Free fl oat | 13.05 % |
| Highest price (1 January 2016 – 30 June 2016)* | EUR 5.50 |
| Lowest price (1 January 2016 – 30 June 2016)* | EUR 3.11 |
| Closing price on 30 June 2016* | EUR 4.68 |
| Market capitalisation at 30 June 2016* | EUR 115,535,768.40 |
* Closing prices in Xetra trading
Dear Shareholders, Dear Ladies and Gentlemen,
Our core business is outperforming: Revenues in the housing privatisation ("Trading" segment) have nearly quadrupled since the fi rst semester of 2015 while the earnings before taxes have multiplied more than ten times. The sale of a portfolio centrally located in Berlin that was reported at the start of August will not become eff ective until the second half of 2016, and is therefore not even included in these reassuring fi gures. The contribution to operating income from this sale alone equals approximately 10 million euros after taxes, and we have an infl ow of more than 30 million euros in liquid funds. Collectively, these developments will make it possible for us to top our year-end forecast, and very substantially so: Rather than clearing the mark of 10 million euros after taxes as targeted, our earnings after taxes are now expected to be nearly twice as high. Given this very reassuring performance, we plan to propose to the Annual General Meeting next year to pay out a dividend for 2016, which would be the fi rst such distribution.
Despite a mid-year turnover of more than 73 million euros and the associated disposal of properties from our "Trading" portfolio we managed once again to keep the total assets more or less balanced: By the end of June, they totalled c. 393 million euros. In the months since the start of the year, we acquired 14 property assets with a combined total of 519 fl ats for an aggregate purchase price of slightly over 53 million euros. As previously announced, we expanded our activities beyond Berlin's city limits. In addition to the properties in Ahrensburg near Hamburg and Hanover already mentioned in the Q1 report, we acquired further properties in Bonn and Bayreuth. This brings the share of residential units located outside Berlin up to around 45 % (235 units). Our focus will remain Berlin, but the surging prices, the dwindling supply in housing estates and residential packages, and the political uncertainties and restrictions in the German capital (especially the expansion of historic district protection areas through zoning ordinances against the conversions of residential property) have inversely raised the appeal of other conurbations.
There is another consequence of the price trend in Berlin: We have started taking a closer look at the subject of housing construction because the prices for existing fl ats have lately pulled level with the construction costs of new schemes. We are specifi cally looking into collaborations with developers that bring in-depth technical know-how to the job but lack a highpowered sales organisation of their own. Since we have the wherewithal to act collaboratively in the areas of equity and fi nancing, we could approach a wide spectrum of potential partners. We presumably will kick off the fi rst project of this kind shortly, with others to follow.
We look forward to these upcoming challenges, and hope that you will continue to travel this road with us.
Kind regards,
Jacopo Mingazzini Management Board
Real estate markets and real estate stocks have benefi ted from the European Central Bank's policy of monetary easing, and the general unease on the capital markets. Low interest rates have created a need for investment alternatives, and the real estate sector is certainly one of the options because it benefi ts from the low-interest policy in the form of low fi nancing costs.
The share of ACCENTRO Real Estate AG traced the turbulent upward trend of the business environment. Starting out at EUR 3.59 on the fi rst trading day of 2016, the share price resumed its upward trajectory from the previous year, and stood at EUR 5.50 by April 2016 after gaining 53.2 %. On the last trading day of the fi rst semester of 2016, the share price closed at EUR 4.68 which implies EUR 115,535,768.40 in market capitalisation.
The average daily trading volume (Xetra) of ACCENTRO stock during the fi rst semester of 2016 was 11,513 units (H2 2015: 10,681 units).
The number of ACCENTRO Real Estate AG shares in circulation had slightly increased to a total of 24,687,130 no-par value bearer shares by the end of the reporting period (30 June 2016) because some holders of the 6.25 % convertible bond 2014/2019, ISIN DE000A1YC4S6, WKN A1YC4S converted their bonds.
The shares are held to 86.95 % by ADLER Real Estate AG, while 13.05 % of them are held in free fl oat.
During the fi rst semester of 2016, ACCENTRO Real Estate AG made it one of its key priorities to provide continuous coverage of relevant corporate events and to maintain an intense dialogue with the capital market.
For instance, ACCENTRO Real Estate AG engaged the capital market with a presentation and one-to-one meetings at the Oddo Seydler Small & Mid Cap Conference in Frankfurt am Main in February 2016. 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:
| ACCENTRO Real Estate AG | |
|---|---|
| Company shares | |
| Stock market segment | Prime Standard |
| ISIN | DE000A0KFKB3 |
| German Securities Code Number (WKN) | A0KFKB |
| Number of shares on 30 June 2016 | 24,687,130 |
| Free fl oat | 13.05 % |
| Highest price (1 January 2016 – 30 June 2016)* | EUR 5.50 |
| Lowest price (1 January 2016 – 30 June 2016)* | EUR 3.11 |
| Closing price on 30 June 2016* | EUR 4.68 |
| Market capitalisation at 30 June 2016* | EUR 115,535,768.40 |
* Closing prices in Xetra trading
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.
All monetary fi gures in this report are stated in euro (EUR). Both individual and total fi gures represent the value with the smallest rounding diff erence. Accordingly, adding the values of the individual line items may result in slight diff erences compared to the sum totals posted.
The ACCENTRO Group is a listed property company focusing on residential real estate in Germany. It specialises in the creation and marketing of condominiums from the Group's proprietary real estate inventory. As a service provider, ACCENTRO Group is Germany's market leader in the area of tenant-sensitive housing privatisation. One local focus is Berlin's housing market.
The Group acts moreover as landlord of currently 3,579 proprietary units. That is why the business of the ACCENTRO Group divides into the segments "Trading" and "Portfolio."
The "Trading" segment of the ACCENTRO Group includes the buying and selling of residential properties and individual apartments, especially the retailing of apartments to owneroccupiers and buy-to-let investors within the framework of retail privatisations of housing portfolios. The privatisation services provided by the ACCENTRO Group involve both the retailing of apartments from proprietary property stock of the ACCENTRO Group and the provision of privatisation services on behalf of third parties.
In its "Portfolio" segment, the ACCENTRO Group manages its own properties, which are retained for long-term ownership and not primarily intended for privatisation. The idea is to achieve an appreciation of the property assets while optimising the revenue situation at the same time.
ACCENTRO Real Estate AG is the parent company of the ACCENTRO Group. For companies in which it holds a controlling interest, ACCENTRO AG assumes the top-down responsibilities of corporate controlling, funding, and administration. ACCENTRO AG's sphere of ownership includes core divisions such as Legal, Accounting, Controlling, Risk Management, Funding, and IT.
The ACCENTRO AG group consists of the subgroup Magnus-Relda Holding Vier, which holds major shares of the "Portfolio" segment, and several property vehicles that own the real estate stock of the ACCENTRO Group's "Trading" segment. The subgroup and all of the property vehicles are consolidated in the consolidated fi nancial statements of ACCENTRO AG. For a list of the individual subsidiaries and associates of ACCENTRO AG, please see the notes to the consolidated fi nancial statements in the annual report 2015.
The ACCENTRO Group subdivides into two divisions, "Trading" and "Portfolio." There are no other subdivisions. The segment reporting follows the same division structure. To control the Group, ACCENTRO AG uses control variables that are fi ne-tuned to meet the specifi cities of each Group segment and of the Group as a whole. These have not been adjusted during the year under review, and remain the same as last year.
The "Trading" segment 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, among others, 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 such as the number of new clients, viewings, and reservations serve as early indicators for the performance of the privatisation segment.
Factors aggregated on the level of the parent Group include prompt and regular updates on the liquidity position and a liquidity planning for the next twelve months is provided. This centrally controlled responsibility helps to monitor the fi nancial stability of the corporate Group. Periodic stocktaking of liquidity fl ows on the level of the member companies as well as on the level of the business units and of the parent Group represent key components of this control system.
The "Portfolio" segment also uses EBIT as fi nancial performance indicator for corporate controlling purposes. A key control variable is the operating result of the properties, which is defi ned by factors such as vacancy rates, new rentals and leases terminated, net rents, and loan debt burden.
The macro-economic parameters have barely changed compared to their representation in the annual report for the 2015 fi nancial year.
In its communique dated 23 March 2016, the German Council of Economic Experts (SVR) predicted that Germany's gross domestic product would grow by 1.5 % in 2016. The moderate upswing of the German economy continues unchanged.
The boom cycle is driven by private consumption, substantial wage increases, and declining energy prices, which has noticeably increased the purchasing power of private households. The Halle Institute for Economic Research (IWH) published a statement on 9 June 2016 suggesting that investments in housing construction, which are boosted by the very low level of interest rates, are one of the factors driving Germany's positive domestic economy. The modest economic boom is expected to continue beyond the year 2017.
Negative impulses, including the dip in China's economic growth, geopolitical tensions, and the so-called Brexit originate primarily in the international trade environment.
The sustained low-interest policy, paired with a stable economic upturn and the rising signifi cance of real property as asset class during a time of general uncertainty on the capital markets, have been a positive infl uence on the residential real estate sector in Germany.
Specifi cally, c. EUR 4.4 billion worth of residential real estate assets and portfolios were sold in Germany during the fi rst half of 2016, according to the market report that the Jones Lang LaSalle property consultancy and service provider published in July 2016. A total of about 42,000 residential units changed hands. While this makes H1 2016 the slowest-selling semester of the past fi ve years, the fact is mostly explained by the absence of large-scale transactions. But while major package sales dropped by 95 %, midsize transactions between EUR25 million and EUR 100 million made hefty gains. The average portfolio size included 224 fl ats, a contraction by 81 % compared to the prior-year period. Meanwhile, the decline in supply and the persistently high demand have caused the competition among investors to intensify. The average purchase prices in Germany's metropolises rose by nearly 40 % over the past fi ve years, growing from EUR 60,000 per fl at to EUR 100,000 per fl at by the end of the fi rst semester of 2016.
The residential investment market was boosted by the sustained low interest level and the persistent investment pressure among both institutional investors and private individuals. Increased infl ow of foreign capital from Russian, Arab and Asian investors is testimony to the steadily growing appeal of Germany's real estate sector. Whether or not the signifi cance of the German residential investment market will be given fresh impetus by the so-called Brexit, and whether or not the share of international investors will rise even further, can not be predicted seriously at the moment.
The developments in the market environment of the ACCENTRO Group remain positive. In response to the increasingly short supply in Berlin, we monitor the latest trends on the residential property market and are gradually expanding our footprint in other German metropolises and university cities as well as conurbations.
The business performance of the ACCENTRO Group during the fi rst half of 2016 mirrors the favourable overall market environment on all residential property markets of relevance to ACCENTRO. The consolidated income of the ACCENTRO Group substantially exceeded its own target at EUR 7.4 million.
Although revenues by mid-year 2016 were noticeably lower than they were at the end of the prior-year semester, this is explained by the outstanding one-off result of that semester, which is attributable to the sale of the property portfolio in Berlin-Hohenschönhausen. The letting take-up in 2016 to date has evolved as planned, while the sales performance of the fi rst six months of 2016 went far beyond expectations.
The company's share capital changed during the reporting period in the sense that 8,930 convertible bonds from the issued 2014/2019 convertible bond were converted into one share in ACCENTRO Real Estate AG each. Accordingly, the share capital amounted to EUR 24,687,130.00 as of 30 June 2016.
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 developed as follows during the fi rst semester of the 2016 fi nancial year:
| H1 2016 | H1 2015 | |
|---|---|---|
| EUR million | EUR million | |
| Revenues | 73.6 | 118.0 |
| EBIT | 19.0 | 30.5 |
| Consolidated income | 7.4 | 20.0 |
The consolidated revenues added up to EUR 73.6 million during H1 of the 2016 financial year. They break down into the following segments:
The drop in revenues apparent when directly comparing this latest mid-year result with H1 2015 is explained by the sale of the real estate portfolio in Berlin-Hohenschönhausen in 2015, whose scale was not matched by any transaction in 2016.
The drop in revenues in the "Portfolio" segment since H1 2015 is explained by the discontinued infl ow of rental income from the housing portfolio in Berlin-Hohenschönhausen up to 30 June 2015, by which time it was sold, as previously reported.
The gross operating profi t (EBIT) of the "Trading" segment grew substantially during Q1 2016, increasing from EUR 2.2 million at the end of the reference period to EUR 16.9 million. The reason for this, as for the trend in revenues, is the rise in net income, and in the steep one-year increase in net rental income compared to H1 2015.
The operating result (EBIT) of the "Portfolio" segment equalled EUR 2.2 million (reference period: EUR 29.3 million), and was essentially based on investment property lettings whereas the same semester in 2015 was defi ned by the disposal of the Berlin-Hohenschönhausen portfolio.
For a detailed income list by segment, please see the elaborating disclosures on the semiannual fi nancial statements in section 4.1.
The consolidated income by the end of the reporting period equalled EUR 7.4 million (reference period: EUR 20.0 million). The positive net income considerably exceeds the predicted development of the 2016 fi nancial year in conjunction with the statements of account presented as of 31 December 2015.
The other operating income without measurements dropped slightly to a total of EUR 0.7 million, down from EUR 1.3 million during the reference period.
At EUR 1.3 million, the total payroll and benefi t costs more or less maintained the level of the reference period (EUR 1.2 million) even though the number of employees rose from 26 to 33 during the current period.
The fi nancial result of H1 2016 roughly matched the level of the prior period (EUR –7.2 million) at EUR –6.7 million. Analogously, the total assets declined but marginally from one period to the next.
The earnings before taxes equal EUR 12.7 million, down from EUR 23.2 million at the end of the reference period. Taking into account income taxes of EUR –5.4 million (reference period: EUR –3.2 million), this results in a consolidated profi t of EUR 7.4 million.
Key Figures from the Cash Flow Statement
| H1 2016 | H1 2015 | |
|---|---|---|
| EUR million | EUR million | |
| Cash fl ow from operating activities | 32.5 | –18.8 |
| Cash fl ow from investment activities | 12.4 | 54.3 |
| Cash fl ow from fi nancing activities | –26.4 | –31.6 |
| Net change in cash and cash equivalents | 18.5 | 3.8 |
| Cash and cash equivalents at the beginning of the period | 7.0 | 7.7 |
| Cash and cash equivalents at the end of the period | 25.4 | 10.9 |
During the fi rst six months of 2016, the cash fl ow from operating activities amounted to EUR 32.5 million (reference year: EUR –18.8 million). The cash fl ow from operating activities breaks down into the cash profi t for the period and cash-eff ective changes in current working capital. A positive impact on the operating cash fl ow was generated by rent payments and the amounts deposited in return for inventory properties sold. The operating cash fl ow is impaired by all of the operating expenditures, including income tax payments.
The cash fl ow from investment activities amounted to EUR 12.4 million during the reporting period (reference period: EUR 54.3 million). As in the reference period, this refl ects essentially the payments made by buyers in the wake of investment property sales.
The cash fl ow from fi nancing activities amounted to EUR –26.4 million during the reporting period (reference period: EUR –31.6 million), and breaks down into new loans taken out toward the expansion of the property stock in the "Trading" segment, payment outfl ows for the principal repayment of loans associable with properties sold from the "Trading" and the "Portfolio" holdings, and the principal repayment of bonds and fi nancial liabilities.
Cash and cash equivalents amounted to EUR 25.4 million as of 30 June 2016, compared to EUR 7.0 million by 31 December 2015.
During the reporting period, the shareholders' equity of the ACCENTRO Group rose from EUR 109.2 million as of 31 December 2015 to EUR 116.6 million as of 30 June 2016. The increase is explained nearly exclusively by the semi-annual result of EUR 7.4 million. It implies an equity ratio of 29.7 %, and thus a moderate increase compared to the equity ratio by the balance sheet date of the previous fi nancial year (27.6 %).
For more details on the amount and composition of the Group's cash fl ows, please see the Consolidated Cash Flow Statement.
The total assets decreased by EUR 2.0 million since the balance sheet date of the previous fi nancial year as they dropped to EUR 393.2 million.
Non-current liabilities decreased by EUR 17.0 million since the balance sheet date of the previous fi nancial year, dropping to EUR 169.0 million.
Current liabilities rose by EUR 16.7 million to EUR 102.3 million since the end of last year (EUR 85.5 million). The main cause for the increase are the property sales planned for the third quarter of 2016, and the repayment of the corresponding loans.
In its statement of account for the 2015 fi nancial year, the Management Board of ACCENTRO AG predicted that the 2016 fi nancial year would return substantial consolidated funds from operations. This was to be achieved through noticeably enhanced earnings in the "Trading" segment and a sustainably stable contribution to operating income in the "Portfolio" segment, among other contributing factors. In the "Trading" segment, the improved earnings target was actually topped during the fi rst six months of 2016. As far as the portfolio business goes, it is assumed that measures to roll back vacancies will help to boost earnings in a sustainable way. Based on these facts and assumptions, the Management Board of ACCENTRO Real Estate AG has adjusted the income forecast for 2016, and now expects to see a consolidated income close to EUR 20 million by the end of the fi nancial year.
On 5 August 2016, after the end of fi rst semester 2016, the deed was notarised for the sale of a real estate portfolio of 419 residential units centrally located in Berlin. Having a sales volume of c. EUR 51 million and contributing c. EUR 10 million to operating income after taxes, this transaction will lead to a surge in earnings in the third quarter of 2016.
The forecasts and other statements regarding the future business performance of the ACCENTRO Group contained in the consolidated fi nancial statements for 2015 will be raised to refl ect the disposal of a residential portfolio in Berlin as described in the report on subsequent events.
The Management Board of ACCENTRO Real Estate AG projects a consolidated profi t of nearly EUR 20 million by the end of the 2016 fi nancial year. Backed by the Supervisory Board of ACCENTRO Real Estate AG, the Management Board would like to let its unitholders share in the success, and will therefore plans to propose the distribution of a dividend to the Annual General Meeting.
Going forward, ACCENTRO Real Estate AG will keep focusing on the privatisation of apartments from its proprietary stock as well as on behalf of third parties as it continues to expand and acquire new real estate.
In collaboration with a partner in the building industry, the company also intends to start marketing new residential units that will be raised on plots owned by that partner. In the initial stage, a smallish building project delivering micro-apartments in Berlin's Neukölln district will be developed.
The ACCENTRO Group's risk management system is geared towards securing existing and future success potential of the Group's commercial activities and to permit their exploitation in such a way as to generate a sustained increase in going concern value. An integral component of this system is the fact that potentially adverse developments and events are addressed in a structured manner and at an early stage, thereby allowing the Management Board to initiate countermeasures in good time before signifi cant damage is done.
During the reporting period, the Management Board of ACCENTRO AG re-assessed the threats and opportunities to which the ACCENTRO Group is exposed, comparing them with their representation in the Group Management Report for the previous fi nancial year of 2015, and drawing the following conclusions:
The housing market of Berlin, which is of key importance for ACCENTRO Real Estate AG, has experienced a serious hike in property prices. While this makes it possible to generate handsome returns on property sales, on the one hand, it also makes it increasingly hard for the company to purchase real estate in suffi cient quantity and at adequate prices. With this in mind, and given the fact that the so-called rent freeze does not apply to new-build fl ats, the company is looking into emerging opportunities in the housing construction sector because the prices for existing fl ats are closing in on the prices for new ones. Going forward, ACCENTRO Real Estate AG therefore sees considerable potential in new-build apartment sales.
In light of the anticipated development of Germany's housing demand and the generally auspicious parameters of the country's residential property market, the company expects its business potential to keep growing. This assessment is backed by the lively interest of owner-occupiers and buy-to-let investors in properties, particularly in condominiums, that are acquired either as buy-to-let investment or (in the case of owner-occupiers) as an integral component of a private pension plan. The latter aspect, by the way, is bound to gain in signifi cance, and substantially so.
ACCENTRO Real Estate AG intends to stabilise its revenues on their high current level, specifi cally by stepping up its activities in the housing privatisation sector. By the projected expansion of its business into the new-build property segment, the company plans to develop another sustainably profi table business line.
It expects to see a sustained stabilisation of its income and fi nancial position on the basis of a stable business performance and viable cost income ratios. The Group has raised its income forecast for the ongoing year. By the end of this year, it expects to approach the prior-year result of EUR 22.8 million, and thereby to exceed the previous forecast by a far cry. At the moment, the Management Board of ACCENTRO Real Estate AG projects a consolidated income of just under EUR 20 million by the end of the 2016 fi nancial year.
| ACCENTRO Real Estate AG | 30 June 2016 | 31 Dec. 2015 |
|---|---|---|
| Assets | TEUR | TEUR |
| Non-current assets | ||
| Goodwill | 17,776 | 17,776 |
| Other intangible assets | 39 | 47 |
| Property, plant and equipment | 210 | 188 |
| t Investment property |
163,724 | 168,337 |
| Tex Equity investments |
1,188 | 1,188 |
| Equity interests accounted for using the equity method | 1,696 | 1,593 |
| lter a Deferred tax assets |
465 | 465 |
| Total non-current assets | 185,098 | 189,594 |
| Current assets | ||
| Inventories | 137,153 | 156,121 |
| Trade receivables | 7,569 | 10,422 |
| Other receivables and other assets | 28,524 | 14,885 |
| Current income tax receivables | 48 | 54 |
| Cash and cash equivalents | 25,441 | 6,981 |
| Total current assets | 198,734 | 188,462 |
| Non-current assets held for sale | 9,406 | 17,149 |
| Total assets | 393,238 | 395,205 |
| 30 June 2016 | 31 Dec. 2015 | |
|---|---|---|
| ACCENTRO Real Estate AG Equity |
TEUR | TEUR |
| Subscribed capital | 24,687 | 24,678 |
| Capital reserves | 53,109 | 53,095 |
| Retained earnings | 38,186 | 30,873 |
| Attributable to parent company shareholders | 115,982 | 108,646 |
| Attributable to minorities | 631 | 595 |
| Total equity | 116,613 | 109,241 |
| Liabilities | TEUR | TEUR |
| Non-current liabilities | ||
| Provisions | 17 | 17 |
| Financial liabilities | 139,689 | 154,562 |
| Bonds | 21,606 | 21,338 |
| Shareholder loans | 0 | 2,824 |
| Compensation claims by partners of civil-law and limited partnerships | 327 | 0 |
| Deferred income tax liabilities | 7,412 | 7,288 |
| Total non-current liabilities | 169,051 | 186,027 |
| Current liabilities | ||
| Provisions | 2,247 | 2,540 |
| Financial liabilities | 64,295 | 63,804 |
| Bonds | 596 | 137 |
| Shareholder loans | 4,427 | 0 |
| Advanced payments received | 16,346 | 9,253 |
| Current income tax liabilities | 7,289 | 2,014 |
| Trade payables | 3,728 | 4,114 |
| Other liabilities | 3,346 | 3,655 |
| Total current liabilities | 102,274 | 85,515 |
| Liabilities held for sale | 5,300 | 14,421 |
| Total equity and liabilities | 393,238 | 395,205 |
| ACCENTRO Real Estate AG | Q2 2016 01 April 2016 – 30 June 2016 |
Q2 2015 01 April 2015 – 30 June 2015 |
H1 2016 01 Jan. 2016 – 30 June 2016 |
H1 2015 01 Jan. 2015 – 30 June 2015 |
|---|---|---|---|---|
| TEUR | TEUR | TEUR | TEUR | |
| Revenues from sales of inventory property | 30,476 | 8,122 | 48,947 | 10,834 |
| Expenses from sales of inventory property | –19,338 | –6,750 | –32,433 | –9,017 |
| Capital gains from inventory property | 11,138 | 1,372 | 16,514 | 1,817 |
| Revenues from sales of investment property | 13,730 | 94,428 | 13,865 | 94,428 |
| Expenses from sales of investment property | –13,766 | –78,640 | –13,953 | –78,640 |
| Capital gains from investment property | –36 | 15,788 | –89 | 15,788 |
| Capital gains from property sales | 11,102 | 17,160 | 16,425 | 17,605 |
| Letting revenues | 4,763 | 5,692 | 9,974 | 11,397 |
| Letting expenses | –2,100 | –2,883 | –4,401 | –4,551 |
| Net rental income | 2,663 | 2,809 | 5,574 | 6,846 |
| Revenues from services | 498 | 743 | 797 | 1,313 |
| Expenses from services | –336 | –534 | –517 | –862 |
| Net service income | 162 | 209 | 280 | 452 |
| Other operating income | 419 | 1,230 | 772 | 1,309 |
| Measurement of investment property | –2 | 0 | –6 | 8,490 |
| Earnings from other income | 417 | 1,230 | 766 | 9,799 |
| Gross profi t or loss | 14,344 | 21,408 | 23,045 | 34,702 |
| Total payroll and benefi t costs | –740 | –681 | –1,302 | –1,212 |
| Depreciation and amortisation of intangible assets and property, plant and equipment |
–37 | –23 | –65 | –46 |
| Impairments of inventories and accounts receivable | –601 | –188 | –631 | –231 |
| Other operating expenses | –1,379 | –1,470 | –1,999 | –2,751 |
| EBIT (earnings before interest and income taxes) | 11,586 | 19,045 | 19,049 | 30,462 |
| Net income from associates | 371 | 0 | 371 | 0 |
| Other income from investments | 9 | 15 | 18 | 15 |
| Interest income | 128 | 12 | 204 | 32 |
| Interest expenses | –3,571 | –3,729 | –6,927 | –7,262 |
| Net interest income | –3,442 | –3,717 | –6,723 | –7,230 |
| EBT (earnings before income taxes) | 8,524 | 15,343 | 12,714 | 23,247 |
| Income taxes | –3,387 | –314 | –5,364 | –3,209 |
| Consolidated income | 5,137 | 15,029 | 7,350 | 20,039 |
| thereof attributable to non-controlling interests | 42 | 275 | 36 | 169 |
| thereof attributable to shareholders of the parent company | 5,095 | 14,754 | 7,314 | 19,870 |
| Earnings per share (EUR) | ||||
| Basic earnings per share | 0.21 | 0.60 | 0.30 | 0.81 |
| Diluted earnings per share | 0.17 | 0.50 | 0.25 | 0.67 |
* Revenues and the costs of materials were retroactively broken down into more detail to enhance the transparency of the sources of revenues and earnings.
| ACCENTRO Real Estate AG | H1 2016 01 Jan. 2016 – 30 June 2016 |
H1 2015 01 Jan. 2015 – 30 June 2015 |
|---|---|---|
| TEUR | TEUR | |
| Consolidated income | 7,350 | 20,039 |
| + Depreciation/amortisation of non-current assets |
65 | 46 |
| –/+ Net income from associates carried at equity | –389 | 0 |
| +/– Increase/decrease in provisions | 298 | –367 |
| + Impairment on assets held for sale |
0 | 100 |
| +/– Changes in the fair value of investment property | 6 | –8,490 |
| +/– Other non-cash expenses/income | 4,601 | 2,993 |
| –/+ Gains/losses from the disposal of non-current assets | 0 | 2 |
| –/+ Increase/decrease in trade receivables and other assets that are not attributable to investing or fi nancing activities |
–10,002 | 3,381 |
| +/– Increase/decrease in trade payables and other liabilities that are not attributable to investing or fi nancing activities |
11,900 | 16,942 |
| – Cash outfl ows for investments in fully consolidated companies with properties held as trading assets |
0 | –10 |
| –/+ Income from disposal of investment property | –53 | –15,801 |
| –/+ Gains/losses from disposal of subsidiaries | –275 | –150 |
| +/– Other income tax payments | –10 | –25 |
| = Operating cash fl ow prior to de-/reinvestment in trading assets |
13,491 | 18,660 |
| –/+ Increase/decrease in inventories (trading properties) | 18,990 | –37,478 |
| = Cash fl ow from current operating activities |
32,482 | –18,818 |
| + Proceeds from disposal of investment property (less costs of disposal) |
13,865 | 54,614 |
| + Changes in liabilities from advance payments received |
0 | 0 |
| + Interest received |
61 | 0 |
| – Cash outfl ows for investments in intangible assets |
–8 | 0 |
| – Cash outfl ows for investments in property, plant and equipment |
–71 | –45 |
| – Cash outfl ows for investments in investment properties |
–1,478 | –274 |
| – Cash outfl ows for investments in non-current assets |
0 | 0 |
| – Cash outfl ows for investments in fully consolidated companies |
0 | 0 |
| = Cash fl ow from investment activities |
12,369 | 54,295 |
| Continued on page 18 |
| ACCENTRO Real Estate AG | H1 2016 01 Jan. 2016 – 30 June 2016 |
H1 2015 01 Jan. 2015 – 30 June 2015 |
|
|---|---|---|---|
| TEUR | TEUR | ||
| Continued from page 17 | |||
| + | Payments made by shareholders | 0 | 0 |
| + | Payments from issuing bonds and raising (fi nancial) loans | 9,356 | 8,490 |
| – | Repayment of bonds and (fi nancial) loans | –31,949 | –33,849 |
| – | Interest paid | –3,775 | –6,268 |
| + | Interest received | 0 | 0 |
| = | Cash fl ow from fi nancing activities | –26,368 | –31,627 |
| Net change in cash and cash equivalents | 18,482 | 3,850 | |
| + | Increase in cash and cash equivalents from investments in fully consolidated companies | 0 | 0 |
| – | Decrease in cash and cash equivalents from the disposal of fully consolidated companies | –23 | –604 |
| + | Cash and cash equivalents at the beginning of the period | 6,981 | 7,681 |
| = | Cash and cash equivalents at the end of the period | 25,441 | 10,927 |
| Issued capital |
Capital reserve |
Retained earnings |
Minority interests |
Total | |
|---|---|---|---|---|---|
| ACCENTRO Real Estate AG | |||||
| TEUR | TEUR | TEUR | TEUR | TEUR | |
| As of 1 January 2016 | 24,678 | 53,095 | 30,873 | 595 | 109,241 |
| Consolidated income | – | – | 7,314 | 36 | 7,350 |
| Other comprehensive income | – | – | 0 | 0 | 0 |
| Total consolidated income | – | – | 7,314 | 36 | 7,350 |
| Costs of raising equity | – | – | – | – | 0 |
| Companies acquired | – | – | – | – | 0 |
| Companies sold | – | – | – | – | 0 |
| Changes in non-controlling interests | – | – | – | – | 0 |
| Increase in kind | – | – | – | – | 0 |
| Cash capital increase | – | – | – | – | 0 |
| Convertible bonds converted | 9 | 13 | – | – | 22 |
| As of 30 June 2016* | 24,687 | 53,109 | 38,186 | 631 | 116,613 |
* Adding the values of the individual line items may result in slight diff erences compared to the sum totals posted.
| Issued capital |
Capital reserve |
Retained earnings |
Minority interests |
Total | |
|---|---|---|---|---|---|
| ACCENTRO Real Estate AG | |||||
| TEUR | TEUR | TEUR | TEUR | TEUR | |
| As of 1 January 2015 | 24,436 | 52,757 | 8,225 | 433 | 85,851 |
| Consolidated income | – | – | 19,870 | 169 | 20,039 |
| Other comprehensive income | – | – | 0 | 0 | 0 |
| Total consolidated income | – | – | 19,870 | 169 | 20,039 |
| Costs of raising equity | – | – | – | – | – |
| Companies acquired | – | – | – | 31 | 31 |
| Companies sold | – | – | – | – | – |
| Changes in non-controlling interests | – | – | – | – | – |
| Increase in kind | – | – | – | – | – |
| Cash capital increase | – | – | – | – | – |
| Convertible bonds converted | 0 | 0 | – | – | 1 |
| As of 30 June 2015* | 24,436 | 52,757 | 28,096 | 632 | 105,922 |
* 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 active both as property portfolio holder and property trader. The company's registered offi ce is located at Uhlandstr. 165 in 10719 Berlin, Germany. The company's shares are listed on the Frankfurt Stock Exchange for trading on the Regulated Market (Prime Standard).
As of 30 June 2016, 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 2016. The condensed consolidated interim fi nancial statements were not checked by an auditor or subjected to review.
It was decided not to include a statement of comprehensive income because the other comprehensive income includes no eff ects recognised directly in equity.
The condensed consolidated interim fi nancial statements for the fi rst semester of the 2016 fi nancial year, which ended on 30 June 2016, 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 2015.
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 31 December 2015.
All amounts posted in the balance sheet, income statement, statement of changes in equity, and cash fl ow statement, as well as in the notes and tabular overviews, are quoted in thousands of euro (TEUR), unless otherwise noted. Both individual and total fi gures represent the value with the smallest rounding diff erence. Small diff erences can therefore occur between the sum of the individual items posted and the reported totals.
As of 30 June 2016, the condensed interim consolidated fi nancial statements of ACCENTRO Real Estate AG included 28 subsidiaries, one joint venture, and two associates. During the fi nancial year's nine-month period ending 30 June 2016, the basis of consolidation as of 31 December 2015 (26 subsidiaries, one joint venture, two associates) expanded to include three companies created for the privatisation unit. No business operations were taken over during that time. In addition, one subsidiary was sold by 30 June 2016.
The ACCENTRO Group will be included in the interim fi nancial statements of ADLER Real Estate AG, Frankfurt/Main, the latter being its top-tier parent company.
The Group continued to intensify its business focus on the privatisation segment during the fi rst semester. The legal transfer of another seven assets from the "Portfolio" segment will most likely go ahead during the next twelve months. Deeds were signed for four properties by 30 June 2016. Of the non-current assets held for sale, which had a total value of TEUR 17,149 by 31 December 2015, assets with a fair value of TEUR 13,849 have already been sold this year to date. On top of that, TEUR 6,106 worth of properties were reclassifi ed during the year as assets held for sale.
Non-current assets held for sale and the associate liabilities were appraised pursuant to IFRS 5 and posted as current. The term "Assets held for sale" refers to assets that could immediately be sold as is, and whose disposal is highly likely. These could include single non-current assets, groups of assets earmarked for disposal (disposal groups) or business divisions soon to be discontinued. Liabilities that are handed over together with the assets in the course of a transaction represent an integral part of a disposal group or of a discontinued operation, and are also separately recognised as current "Liabilities held for sale." Non-current assets held for sale are no longer subject to scheduled amortisation, and should be recognised at their carrying amount or at their fair value, whichever is lower, less costs of disposal. Profi ts or losses from the valuation of discontinued operations at fair value less costs of disposal are recognised as result from discontinued operations, as are the results from business activities or from the disposal of these operations. By contrast, the profi ts or losses from the valuation of single assets held for sale and of disposal groups up to the time of their fi nal disposal are recognised among the results from discontinued operations. The representation of the disposal group takes the form of separate entries of the principal assets and liabilities to be sold, posted in the consolidated accounts among the items "Non-current assets held for sale" and "Liabilities held for sale," as the case may be.
Quarter on quarter, the segment results for the second quarter of the 2016 fi nancial year present themselves as shown below:
| Trading | Portfolio | Group | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Total | Privatisation | Other trade | ||||||||
| Q2/2016 | Q2/2015 | Q2/2016 | Q2/2015 | Q2/2016 | Q2/2015 | Q2/2016 | Q2/2015 | Q2/2016 | Q2/2015 | |
| TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | |
| Revenues (external) | 32,584 | 10,025 | 32,584 | 10,025 | – | – | 16,893 | 98,959 | 49,467 | 108,985 |
| thereof | ||||||||||
| Letting | 1,600 | 1,178 | 1,600 | 1,178 | – | – | 3,163 | 4,514 | 4,763 | 5,692 |
| Disposals | 30,476 | 8,105 | 30,476 | 8,105 | – | – | 13,730 | 94,445 | 44,206 | 102,550 |
| Brokerage | 498 | 743 | 498 | 743 | – | – | – | – | 498 | 743 |
| Changes in the value of investment property |
– | – | – | – | – | – | – | – | – | – |
| EBIT | 10,472 | 664 | 10,472 | 1,436 | – | –772 | 1,113 | 18,381 | 11,586 | 19,045 |
| Net income from fi nancial invest ments |
380 | 15 | 380 | 15 | – | 0 | 0 | 0 | 380 | 15 |
| Financial results | –515 | –643 | –515 | –529 | – | –113 | –2,548 | –3,060 | –3,062 | –3,702 |
| Net profi t before income taxes |
9,957 | 22 | 9,957 | 907 | – | –885 | –1,434 | 15,321 | 8,524 | 15,343 |
Compared to the prior-year semester, the segment results for the fi rst semester of the 2016 fi nancial year present themselves as follows:
| Trading | Portfolio | Group | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Total | Privatisation | Other trade | ||||||||
| H1/2016 | H1/2015 | H1/2016 | H1/2015 | H1/2016 | H1/2015 | H1/2016 | H1/2015 | H1/2016 | H1/2015 | |
| TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | TEUR | |
| Revenues (external) | 53,094 | 14,465 | 53,094 | 14,465 | – | – | 20,489 | 103,508 | 73,583 | 117,972 |
| thereof | ||||||||||
| Letting | 3,351 | 2,335 | 3,351 | 2,335 | – | – | 6,624 | 9,063 | 9,974 | 11,397 |
| Disposals | 48,947 | 10,817 | 48,947 | 10,817 | – | – | 13,865 | 94,445 | 62,811 | 105,262 |
| Brokerage | 797 | 1,313 | 797 | 1,313 | – | – | – | – | 797 | 1,313 |
| Changes in the value of investment property |
– | – | – | – | – | – | – | 8,490 | – | 8,490 |
| EBIT | 16,889 | 1,194 | 16,889 | 2,203 | – | –1,009 | 2,160 | 29,269 | 19,049 | 30,462 |
| Net income from fi nancial invest ments |
389 | 15 | 389 | 15 | – | – | – | – | 389 | 15 |
| Financial results | –1,412 | –1,241 | –1,412 | –795 | – | –445 | –4,922 | –5,975 | –6,335 | –7,215 |
| Net profi t before income taxes |
15,477 | –47 | 15,477 | 1,408 | – | –1,455 | –2,763 | 23,294 | 12,714 | 23,247 |
Segment assets, segment liabilities and segment investments were recognised as follows by 30 June 2016:
| Trading | Portfolio | Group | |
|---|---|---|---|
| TEUR | TEUR | TEUR | |
| Segment assets | 187,158 | 204,384 | 391,542 |
| Equity interests accounted for using the equity method | 1,696 | – | 1,696 |
| Total segment assets | 188,854 | 204,384 | 393,238 |
| Segment liabilities | 115,094 | 161,531 | 276,624 |
| Segment investments | 12,631 | 1,478 | 14,109 |
The fi gures by the reporting date of the 2015 fi nancial year were as follows:
| Trading | Portfolio | Group | |
|---|---|---|---|
| TEUR | TEUR | TEUR | |
| Segment assets | 187,549 | 206,063 | 393,612 |
| Equity interests accounted for using the equity method | 1,593 | – | 1,593 |
| Total segment assets | 189,142 | 206,063 | 395,205 |
| Segment liabilities | 126,811 | 159,153 | 285,964 |
| Segment investments | 102,409 | 3,164 | 105,696 |
Segment assets primarily relate to property, plant and equipment, investment property, inventories, receivables, and receivables from third parties and from the other segment. The goodwill is allocated to the "Trading" segment.
The segment liabilities include fi nancial liabilities, trade payables and other liabilities.
The segment assets and the segment liabilities in the "Portfolio" segment have undergone no material changes since the 2015 fi nancial year. In the "Trading" segment, the disproportionate repayment of fi nancial liabilities from sales proceeds helped us to keep improving the ratio of segment liabilities to segment assets.
Investments in the segment essentially represented property additions that are associable with the "Trading" portfolio.
The 2014/2019 convertible bond issued during the 2013/14 fi nancial year implied 5,395,506 conversion rights as of 31 December 2015, entitling the bearer to one ACCENTRO Real Estate AG share each, which could dilute the earnings per share. The maturity of less than one year has created a dilution eff ect.
During the fi rst semester of 2016, a total of 8,930 convertible bonds from the 2014/2019 convertible bond were converted into one share in ACCENTRO Real Estate AG each. The convertible bond accounts for TEUR 11,972 out of the carrying amount of the bond liabilities.
Compared to the prior-year period, the earnings per share for the fi rst six months of the 2016 fi nancial year present themselves as follows:
| Earnings per Share | ||||
|---|---|---|---|---|
| H1 2016 | H1 2015 | |||
| EUR | EUR | |||
| Basic | 0.30 | 0.81 | ||
| Diluted | 0.25 | 0.67 |
The ACCENTRO Group has a current liability of TEUR 17 to its associate SIAG Sechzehnte Wohnen GmbH & Co. KG. This amount resulted from settlement transactions between the two companies.
One subsidiary of ACCENTRO Group (ESTAVIS Wohneigentum GmbH) is a fully liable partner of the Wohneigentum Berlin GbR joint venture. The historic liability for loan debt has ceased to exist because it was fully repaid during the reporting period. The asset side includes accounts receivable from the Wohneigentum Berlin GbR in the amount of TEUR 231.
The ACCENTRO Group has claims from a loan vis-à-vis its associate, the property company Malplaquetstr. 23 Grundstücksverwaltungsgesellschaft mbH. The accounts receivable from the loan including interest equal 224 TEUR.
Within the framework of signed contracts of agency, the parent company ADLER Real Estate AG moreover assumed, as of 1 October 2014, the asset management for the property companies held by Magnus-Relda Holding Vier GmbH as part of the ACCENTRO Group.
During the 2016 fi nancial year, ADLER Real Estate AG provided asset management services as well as legal and technical advisory services for several property vehicles within the ACCENTRO Real Estate AG consolidated Group over a total amount of TEUR 67.
ACCENTRO Real Estate AG was granted a long-term shareholder credit line in the amount of TEUR 30,000 by its majority shareholder ADLER Real Estate AG, the loan being earmarked for the real estate portfolios acquired during the year under review. By 30 June 2016, TEUR 4,388 out of the total amount of TEUR 30,000 had been drawn down. The loan will have to be fully repaid by 30 June 2017. The loan has an interest rate of 5 % p.a. The shareholder loan is collateralised through hypothecation of the shares in the company Accentro Wohneigentum GmbH.
The ACCENTRO Group employed 33 staff by the end of the semester. During the prior-year semester, the number of employees had been 26. On average, 32 staff have been on the Group's payroll in the ongoing fi nancial year.
by ACCENTRO Real Estate AG pursuant to Art. 37y, German Securities Trading Act (WpHG), in combination with Art. 37w, Sec. 2, No. 3, WpHG
I hereby certify to the best of my knowledge, and in accordance with the applicable accounting principles, that the consolidated interim fi nancial statements 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 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.
Berlin, 12 August 2016
Jacopo Mingazzini Management Board
2016
11 November 2016 3rd quarter report – First nine months 2016
All dates are provisional. Please check our website www.accentro.ag for confi rmation.
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 fi nancial report of ACCENTRO Real Estate AG for the fi rst six months of the 2016 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
Chairman of the Supervisory Board
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]
Concept, Editing, Layout
Goldmund Kommunikation, Berlin www.goldmund-kommunikation.de
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