CPI Europe AG — Earnings Release 2016

Jul 27, 2016

News Details

Corporate | 27 July 2016 18:16

IMMOFINANZ: Net profit for 2015/16 negatively influenced by Russia and non-recurring effects, dividend of 6 cents per share planned

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

2016-07-27 / 18:16
The issuer is solely responsible for the content of this announcement.

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KEY FIGURES (in MEUR)* // 2015/16 // Δ in % // 2014/15

Rental income // 314.5 // -18.4% // 385.6
Results of asset management // 188.5 // -33.0% // 281.4
Results of property sales // 0.8 // -98.3% // 44.4
Results of property development // -15.0 // n.a. // 11.4
Results of operations // 118.2 // -59.1%// 289.1
Revaluation of investment properties (foreign exchange-adjusted and foreign
exchange-based) // -133.8 // 43.9% // -92.9
Financial results // -319.1 // -42.5% // -554.7
Net profit // -390.4 // 3.7% // -376.6
Cashflow from operating activities // 64.9 // -55.8% // 146.9
Cashflow from operating activities adjusted** // 158.2 // 7.7% // 146.9

*The earnings contribution from the logistics properties was reclassified
to net profit from discontinued operations due to the sale of the logistics
portfolio. The comparable data for 2014/15 were adjusted accordingly.
** Adjusted to reflect non-recurring payments for settlements with
investors and a settlement payment resulting from BUWOG's exit from the
IMMOFINANZ AG tax group

IMMOFINANZ recorded net profit of EUR -390.4 million for the 2015/16
financial year (2014/15:
EUR -376.6 million). The year-on-year decline resulted primarily from EUR
-469.8 million of negative effects from the foreign exchange-adjusted
valuation of the Russian portfolio and from a decrease in rental income to
EUR 314.5 million (2014/15: EUR 385.6 million) which was caused by
temporary rent reductions in Moscow and the planned sale of properties.
Earnings were also influenced by two negative non-recurring effects: cost
overruns on the Gerling Quartier had a negative impact of EUR -48.0 million
on the results of property development and the settlement of legal
proceedings with investors resulted in costs of EUR -29.4 million. The
results of operations amounted to EUR 118.2 million (2014/15: EUR 289.1
million).

"The past financial year was influenced by numerous events and decisions to
set the course for IMMOFINANZ's transformation into a leading European real
estate company, but also reflected the tense political and economic
situation in Russia. After the very successful spin-off of BUWOG and the
sale of our logistics portfolio, our concentration on the office and retail
segments was the next step required for future growth. This growth will be
organic, for example through the recently started development projects in
Germany's office sector, or take place through acquisitions. We were also
able to close a negative chapter from the past by reaching out-of-court
settlements in lawsuits by investors which originated prior to 2009",
explained Oliver Schumy, CEO of IMMOFINANZ.

"The capital measures implemented during the previous financial year now
form the basis for a sustainable distribution policy and will essentially
allow IMMOFINANZ to resume dividend payments independent of exceptional
political or economic situations - as is currently the case in Russia. We
will therefore make a recommendation to the annual general meeting for the
2015/16 financial year, requesting the approval of a dividend of 6 cents
per share", added CEO Schumy. This distribution qualifies as a capital
repayment under Austrian tax law and is therefore tax-free for private
persons resident in Austria who hold IMMOFINANZ shares in their personal
portfolios.***

Earnings

Rental income fell by 18.4% to EUR 314.5 million in 2015/16 (2014/15: EUR
385.6 million). This decline resulted, above all, from the deterioration of
the economic environment in Russia, where IMMOFINANZ has granted temporary
rent reductions to the tenants in its Moscow shopping centers, and from
planned property sales. The rental income generated in Russia totalled EUR
82.2 million for the reporting year, compared with EUR 136.2 million in
2014/15.

The reporting year brought an increase in the occupancy rate in the
standing investment portfolio to 86.3% (2014/15: 84.2% incl. logistics
properties). At the end of April 2016 the occupancy rate equalled 81.7%
(2014/15: 75.0%) in the office segment and 91.1% (92.0%) - or a stable
94.1% excluding Russia - in the retail segment.

The results of property sales totalled EUR 0.8 million for the reporting
year (2014/15: EUR 44.4 million). The optimisation and adjustment of the
portfolio was reflected in the sale of several residential properties and
office buildings in Vienna as well as a number of smaller retail properties
in the Austrian provinces and the Dutch self-storage chain City Box with
its 23 locations.

The results of property development amounted to EUR -15.0 million (2014/15:
EUR 11.4 million). These negative results were a consequence, in
particular, of construction cost overruns on the Gerling Quartier
development project in Cologne. The cost overruns were communicated in the
third quarter of 2015/16 and are attributable, among others, to additional
requirements for historic preservation and the construction of an
underground garage. They had a negative effect of EUR -48.0 million on the
results of property development for the reporting year.

The results of operations equalled EUR 118.2 million and were 59.1% lower
than the previous year (EUR 289.1 million). Other operating expenses
(overhead costs) rose to EUR -86.4 million (2014/15: EUR -69.7 million),
above all due to non-recurring costs of EUR 29.4 million for the settlement
of legal proceedings with investors. These settlements created legal
security and ended pending proceedings with a value in dispute of approx.
EUR 240 million.

The foreign exchange-adjusted revaluations of investment property in all
IMMOFINANZ markets amounted to EUR -545.0 million (2014/15: EUR -317.3
million) and are attributable, above all, to write-downs to the Moscow
retail properties. These write-downs are contrasted by positive revaluation
effects of EUR 57.4 million from Austria and Hungary. CBRE was commissioned
to appraise the properties in Eastern Europe during 2015/16, while BNP
Paribas was responsible for the appraisals in Germany and Austria. The
foreign exchange-based revaluations of investment property totalled EUR
411.3 million, compared with EUR 224.4 million in 2014/15. They originated
almost entirely in Russia, since the Euro is the functional currency in all
other core countries, and resulted from the translation of the Ruble
property values in the local Russian companies following the strong
appreciation of the Euro and the US Dollar versus the Ruble during the
reporting period.

Financial results totalled EUR -319.1 million (2014/15: EUR -554.7
million). Financing costs declined to
EUR -172.1 million (2014/15: EUR -189.4 million). Financial results also
include foreign exchange effects of
EUR -222.3 million (2014/15: EUR -268.6 million) which represent a
counterpart to the currency-related value increase of the Russian
portfolio.

Diluted earnings per share for the 2015/16 financial year equalled EUR
-0.40 (2014/15: EUR -0.37). The EPRA NAV (net asset value) per share
amounted to EUR 3.39 as of 30 April 2016 (30 April 2015: EUR 3.99).

Cash flow from operating activities fell by 55.8% from EUR 146.9 million to
EUR 64.9 million. The adjustment of cash flow from operating activities to
reflect the non-recurring payments for the settlements with investors (EUR
75.8 million) and a settlement payment to BUWOG following its exit from the
IMMOFINANZ AG tax group (EUR 17.5 million) results in cash inflows of EUR
158.2 million.

Cash and cash equivalents amounted to EUR 378.8 million as of 30 April 2016
(30 April 2015: EUR 392.9 million) - including the cash and cash
equivalents from discontinued operations and disposal groups -and
represented EUR 0.39 per share (excluding treasury shares).

Outlook

Following the concentration on the office and retail segments, the focus is
now on the further optimisation of the portfolio structure in these two
areas and on value-creating growth to strengthen the standing investments.

The objectives include a further increase in the occupancy level and a
steady improvement in the offering for tenants. In the retail segment, the
VIVO! brand will be rolled out to existing shopping centers. Plans for the
office segment include the introduction and establishment of a new brand. A
like-for-like analysis shows that rents should remain stable across the
entire portfolio, with the exception of Russia.

The measures planned to increase cash flow also include the reduction of
financing costs in the current favourable market environment (30 April
2016: 3.85% including derivatives used to hedge interest rates and 3.54%
excluding these derivatives) as well as a reduction in the Group's overhead
costs.

The acquisition of approx. 26% of CA Immobilien Anlagen AG by IMMOFINANZ
represents the first step towards the planned full merger of these
companies. After the closing for the purchase of the shares in CA Immo, the
two companies will begin negotiations over the merger. Their portfolios
complement each other extremely well, and the transaction is therefore
expected to result in substantial value-creating synergies. IMMOFINANZ
intends to spin off or sell its Russian portfolio, which is characterised
by different market dynamics and a higher risk profile, prior to the
merger.

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

Detailed information on developments, additional indicators and the
portfolio report are provided on the website.

The report by IMMOFINANZ AG on the 2015/16 financial year as of 30 April
2016 will be available on the company's website under
http://www.immofinanz.com/en/investor-relations/financial-reports starting
on 11 August 2016.

*** Subject to certain assumptions, e.g. when the capital repayment exceeds
the tax-base of the shares

On IMMOFINANZ
IMMOFINANZ is a commercial real estate company 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 includes the management and development of properties. The
company has a real estate portfolio of approx. EUR 5.5 billion that covers
more than 380 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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2016-07-27 Dissemination of a Corporate News, transmitted by DGAP - a
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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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