CPI Europe AG — Earnings Release 2016

Dec 19, 2016

News Details

Corporate | 19 December 2016 18:32

IMMOFINANZ: Results of operations increased in Q1-2 2016A, net profit negatively influenced by valuation effects

DGAP-News: IMMOFINANZ AG / Key word(s): Real Estate/Miscellaneous

19.12.2016 / 18:32
The issuer is solely responsible for the content of this announcement.

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KEY FIGURES (in MEUR)* // Q1-2 2016A // Δ in % // Q1-2 2015/16

Rental income // 153.3 // -4.4%// 160.3
Results of asset management // 107.3 // 5.1% // 102.1
Results of property sales // -2.5 // n/a // 6.1
Results of property development // 0.7 // n/a // -5.6
Results of operations // 87.6 // 28.2% // 68.3
Revaluations // -132.4 // n/a // 374.1
Financial results // -83.8 // 58.7% // -203.1
Net profit // -154.4 // n/a // 133.2
FFO1 (excl. results of property sales) // 16.9 // 8.8% // 15.6
FFO2 (incl. results of property sales) // 14.5 // -33.4% // 21.7

* The comparable data for 2015/16 were adjusted accordingly. The
abbreviated 2016 financial year (2016A) covers eight months from May to
December 2016.

IMMOFINANZ generated results of operations totalling EUR 87.6 million in
the first two quarters of the abbreviated 2016 financial year, for an
increase of 28.2% over the comparable prior year period. This growth was
supported, above all, by an improvement in the results of asset management
(plus 5.1% to EUR 107.3 million) following a substantial decline in the
write-off of receivables in Russia and lower vacancy-related and operating
costs charged to building owners as well as a reduction in other operating
expenses (from EUR -53.5 million to EUR -26.1 million). In the previous
year, these expenses were influenced by non-recurring costs for the
settlement of legal proceedings with investors. Net profit for the
reporting period amounted to EUR -154.4 million (H1 2015/16: EUR 133.2
million). This decline resulted, above all, from foreign exchange-adjusted
revaluations of EUR -95.1 million to the Moscow shopping centers and a
market-related valuation (IFRS) of EUR -105.7 million on the CA Immo
shares.

"Our activities in recent quarters included the successful continuation of
our focus on the office and retail core businesses, an increase in the
efficiency of our portfolio and a further improvement in the occupancy
rate. We also completed and opened three retail parks under our STOP SHOP
brand and started a number of development projects in the retail sector.
However, results for the first half-year were again influenced by the
difficult market in Russia and the resulting extensions of the rent
reductions granted to tenants", explained CEO Oliver Schumy.

Development of earnings in detail

Temporary rent reductions in Moscow were responsible for a 4.4% decline in
rental income to EUR 153.3 million in the first half of 2016A (H1 2015/16:
EUR 160.3 million). Rental income of EUR 36.1 million was recorded in
Russia during the reporting period, compared with EUR 43.3 million in the
first half of 2015/16. Completions and new rentals successfully offset the
decline in rental income from the sale of properties. The rental income
from office properties rose by 3.1% to EUR 55.5 million in the first half
of 2016A.

The results of asset management rose by 5.1% year-on-year to EUR 107.3
million, primarily due to a 19.0% reduction in property expenses to EUR
-52.0 million. Higher maintenance costs (EUR -14.7 million vs. EUR -7.0
million in H1 2015/16) for the ongoing modernisation of office properties
were offset by a decline in the operating costs charged to building owners
(EUR -9.0 million vs. EUR -13.9 million) which resulted, above all, from a
decrease in property-based taxes and lower vacancy costs (EUR -7.2 million
vs. EUR -9.2 million). At EUR -0.5 million, the write-off of receivables in
Russia was also substantially lower than the first half of the previous
year (EUR -9.0 million). The outstanding balance of the rents receivable in
Russia, after impairment losses, declined to EUR 8.5 million as of 31
October 2016 (30 April 2016: EUR 11.1 million).

The results of property sales equalled EUR -2.5 million for the reporting
period (H1 2015/16: EUR 6.1 million). The ongoing optimisation and
adjustment of the portfolio was reflected in the sale of several
residential properties, smaller office buildings and retail parks in
Austria. In the first half of 2016A, the results of property development
totalled EUR 0.7 million (H1 2015/16: EUR -5.6 million).

The results of operations rose by 28.2% over the first half of 2015/16 (EUR
68.3 million) to EUR 87.6 million for the reporting period. This increase
was based, in particular, on a substantial decline in other operating
expenses (EUR -26.1 million vs. EUR -53.5 million), which were influenced
by non-recurring effects of EUR -28.1 million for the termination of legal
proceedings with investors in the previous year.

The foreign exchange-adjusted revaluation of investment properties across
all markets amounted to EUR -104.1 million (H1 2015/16: EUR 24.0 million)
and was influenced primarily by a decline in the value of the Moscow retail
properties. The main factors underlying this development were the difficult
market environment, the completion and opening of numerous new shopping
centers in Moscow and the extension of rental reductions and fixed exchange
rates for tenants. Positive valuation effects were recorded in the Czech
Republic, primarily due to an improvement in the market. Based on the more
stable development of the Ruble in Q1-2 2016A, the foreign exchange-based
revaluations of investment property totalled EUR -32.1 million (H1 2015/16:
EUR 335.4 million). These adjustments resulted from the valuation of the
Russian properties in US Dollars and the subsequent translation of the
Ruble property values in the local Russian companies.

Financial results totalled EUR -83.8 million (H1 2015/16: EUR -203.1
million), in part due to a reduction in net financing costs, and included
positive foreign exchange effects of EUR 35.4 million (H1 2015/16: EUR
-180.5 million). The negative effects of EUR -11.0 million (H1 2015/16: EUR
-22.3 million) recorded under other financial results are attributable
primarily to the valuation of derivatives.

The share of profit/loss from equity-accounted investments equalled EUR
-33.1 million (H1 2015/16: EUR 79.8 million) and was based, in particular,
on the following: the proportional share of earnings from the BUWOG
investment (EUR 29.5 million), a gain on the sale of 18.5 million BUWOG
shares (EUR 34.2 million), the proportional share of earnings from CA Immo
for one quarter (EUR 7.5 million) and the market-related valuation (IFRS)
of the CA Immo shares (EUR -105.7 million). The book price of the
investment in CA Immo therefore equalled EUR 19.98 per share as of 31
October 2016.

Net profit amounted to EUR -154.4 million (H1 2015/16: EUR 133.2 million),
and diluted earnings per share were therefore negative at EUR -0.16 (H1
2015/16: EUR 0.13). The EPRA NAV per share equalled EUR 3.14 as of 31
October 2016 (30 April 2016: EUR 3.39).

Gross cash flow (before tax) rose by 23.3% from EUR 68.1 million to EUR
84.1 million. FFO 1 (excluding the results of property sales) improved by
8.8% year-on-year to EUR 16.9 million, while FFO 2 (including the results
of property sales) equalled EUR 14.5 million (H1 2015/16: EUR 21.7
million).
Cash and cash equivalents declined slightly from EUR 371.6 million as of 30
April 2016 to EUR 359.5 million as of 31 October 2016.

Outlook
IMMOFINANZ AG has announced today a change in the preliminary timetable for
the intended merger with CA Immobilien Anlagen AG. The reason is the
planned divestment of IMMOFINANZ's Russian property portfolio, which is a
condition for the merger of the two companies. The Executive Board and
Supervisory Board of IMMOFINANZ today decided to schedule a longer period
than originally considered for the process to separate the Russian
properties. The recent stabilisation of the economy in Russia has
contributed to this decision.

A structured bidding process for IMMOFINANZ's Moscow shopping centers is
scheduled to start at the beginning of 2017. According to current
estimates, the transaction should close in 2017.

The detailed merger discussions between IMMOFINANZ and CA Immo will be
rescheduled until the separation of IMMOFINANZ's Russian portfolio is
completed. In the interim, IMMOFINANZ will use the time as best as possible
to prepare for the planned merger. The shareholder meetings to vote on the
merger are expected, from the current point of view, to take place in 2018.

The company still plans to distribute a basic dividend of 6 cents per share
for the abbreviated 2016 financial year.

The report by IMMOFINANZ AG on Q1-2 2016A as of 31 October 2016 will be
available on the company's website under
http://www.immofinanz.com/en/investor-relations/financial-reports starting
on 20 December 2016.

On IMMOFINANZ
IMMOFINANZ is a commercial real estate group whose activities are focused
on the retail and office segments of eight core markets in Europe: Austria,
Germany, Czech Republic, Slovakia, Hungary, Romania, Poland and Moscow. The
core business covers the management and development of properties, whereby
the STOP SHOP (retail), VIVO! (retail) and myhive (office) brands represent
strong focal points that stand for quality and service. The real estate
portfolio has a value of approx. EUR 5.2 billion and covers more than 350
properties. IMMOFINANZ is listed on the stock exchanges in Vienna (leading
ATX index) and Warsaw. Further information under: http://www.immofinanz.com

For additional information please contact:
Bettina Schragl
Head of Corporate Communications and Investor Relations
IMMOFINANZ
T +43 (0)1 88 090 2290
M +43 (0)699 1685 7290
communications@immofinanz.com
investor@immofinanz.com

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19.12.2016 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language: English
Company: IMMOFINANZ AG
Wienerbergstraße 11
1100 Wien
Austria
Phone: +43 (0) 1 88090 - 2290
Fax: +43 (0) 1 88090 - 8290
E-mail: investor@immofinanz.com
Internet: http://www.immofinanz.com
ISIN: AT0000809058
WKN: 911064
Listed: Regulated Unofficial Market in Berlin, Munich, Stuttgart;
Open Market in Frankfurt ; Warschau, Wien (Amtlicher
Handel / Official Market)

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