CPI Europe AG — Earnings Release 2016

Mar 16, 2016

News Details

Corporate | 16 March 2016 18:37

IMMOFINANZ: Net profit for the first three quarters negatively influenced by Russia, settlement of nearly all legal proceedings with investors

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

2016-03-16 / 18:37
The issuer is solely responsible for the content of this announcement.

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KEY FIGURES (in MEUR)* // 1 May 2015 - 31 Jan. 2016 // Δ in % // 1 May 2014
- 31 Jan. 2015

Rental income // 238.3 // -24.0% // 313.5
Results of asset management // 147.4 // -38.0% // 237.9
Results of property sales // 12.9 // -8.9% // 14.2
Results of property development // -34.9 // n.a. // 3.4
Results of operations // 82.6 // -62.7%// 221.1
Revaluation of investment properties (foreign exchange-adjusted and foreign
exchange-based) // 219.1// -67.8 // 681.1
Financial results -364.1 // -45.5% // -668.2
Net profit // -146.1 // n.a. // 123.8
Cashflow from operating activities // 95.3 // -33.2% // 142.7

* Due to the sale of the logistics portfolio, the earnings contribution
from these properties is now reported under results of discontinued
operations. The comparable prior year data were adjusted accordingly.

IMMOFINANZ recorded net profit of EUR -146.1 million for the first three
quarters of 2015/16 (Q1-3 2014/15: EUR 123.8 million). The year-on-year
decline was caused primarily by approx. EUR 400 million of negative effects
from the foreign exchange-adjusted valuation of the Russian portfolio and
by a decrease in rental income to EUR 238.3 million (Q1-3 2014/15: EUR
313.5 million) that resulted from temporary rent reductions in Moscow and
the planned sale of properties. The results of operations amounted to EUR
82.6 million (Q1-3 2014/15: EUR 221.1 million).

"Results for the first three quarters of 2015/16 continue to reflect the
tense political and economic situation in Russia. This situation is
evident, on the one hand, through the decline in rental income and, on the
other hand, in valuation results. The further significant deterioration of
the general environment in Russia at the turn of the year, the continuation
of EU sanctions against Russia into the summer and the outlook that the
Russian economy will apparently remain in recession during 2016 led us to
commission the newly appointed appraiser for our CEE portfolio, CBRE, with
a special valuation of our five Moscow retail properties as of 31 January
2016. This valuation resulted in a foreign exchange-adjusted impairment
loss of roughly EUR 400 million", explained Oliver Schumy, CEO of
IMMOFINANZ. "We are using the current situation in Russia to further
improve the positioning of our shopping centers and to reduce our costs.
For example: we entered into a cooperation with ECE, the market leader in
the European shopping center segment, to manage our Golden Babylon
Rostokino. This partnership should have a positive effect on occupancy by
the end of 2016."

Like-for-like rental income (i.e. adjusted for new acquisitions,
completions and sales) rose slightly by 1.5% over the previous quarter to
EUR 73.9 million in the third quarter of 2015/16. This increase was
supported, above all, by higher occupancy in the Romanian shopping centers.
The adjusted rental income from the Russian properties remained stable at
EUR 19.8 million in the third quarter (Q2 2015/16: EUR 19.6 million),
whereby the weaker Ruble exchange rate was offset by the increased
Christmas business. The rental income generated in Russia totalled EUR 63.1
million in the first three quarters of 2015/16 (Q1-3 2014/15: EUR 124.2
million).

In the office segment, new rental contracts were finalised during the first
three quarters for approx. 150,000 sqm (including major leases in
Düsseldorf for the new trivago and Uniper corporate headquarters) and
contracts for 150,600 sqm were extended. In the retail segment, new rental
contracts were signed for 65,900 sqm and contracts for 81,500 sqm were
extended. The standing investment portfolio currently has an occupancy rate
of 83.2% (retail: 92.4%, office: 75.2%).

"We have implemented numerous measures in recent months to substantially
increase the occupancy in our properties, above all in the office segment.
The first effects of these measures are now evident and, based on
previously signed contracts, we can confirm that the occupancy rate in our
office portfolio will increase by roughly five percentage points to roughly
80% by the end of April 2016", indicated CEO Schumy.

The foreign exchange-adjusted revaluations totalled EUR -379.3 million
(Q1-3 2014/15: EUR -116.9 million) and resulted chiefly from write-downs to
the Moscow retail properties. They were contrasted by positive revaluation
effects from Romania (increased rental income from the Romanian shopping
centers) and Austria (positive market environment). The foreign
exchange-based revaluations totalled EUR 598.4 million, compared with EUR
798.0 million in the comparable prior year period. 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 versus the Ruble during the reporting period.

Financial results totalled EUR -364.1 million (Q1-3 2014/15: EUR -668.2
million), whereby net financing expense amounted to EUR -119.5 million
(Q1-3 2014/15: EUR -122.4 million). Financial results also included foreign
exchange effects of EUR -343.3 million (Q1-3 2014/15: EUR -544.9 million).
Net profit equalled EUR -146.1 million (Q1-3 2014/15: EUR 123.8 million)
and represented earnings per share (diluted) of EUR -0.15 (Q1-3 2014/15:
EUR 0.13). The NAV (net asset value) per share equalled EUR 3.77 (30 April
2015: EUR 4.19).

Cash and cash equivalents fell EUR -170.9 million below the level on 30
April 2015 to EUR 219.8 million as of 31 January 2016 due to the planned
repayment of financial liabilities and represented EUR 0.23 per share
(excluding treasury shares).

Outlook

"In recent weeks, we were able to conclude nearly all of the difficult and
prolonged legal proceedings with investors", commented Oliver Schumy, CEO
of IMMOFINANZ. The settlement with Advofin, a company that finances legal
proceedings and represented over 3,000 investors, had an acceptance rate of
100%. The settlement with other legal protection insurance companies also
has been executed with similarly high acceptance. A total of EUR 75 million
has been paid out to date. The remaining proceedings represent a value in
dispute of approx. EUR 10 million, and the goal here is to also reach a
settlement in the near future.

The focus for the management of the standing investments remains unchanged
and is directed to improving operating performance and raising occupancy
rates in order to increase stable income. The conditions in the core
markets, with the exception of Russia, are considered favourable for
business development. In contrast, the forecasts for future economic
developments in Russia are still connected with substantial uncertainty and
reliable estimates are not possible. The temporary rent reductions and
fixed exchange rates for the tenants in the Moscow shopping centers will be
re-evaluated quarterly and continued if necessary.

The planned measures to increase cash flow also include the further
reduction of financing costs in the currently favourable market environment
(31 January 2016: 3.51% excl. derivatives and 3.78% incl. derivatives) as
well as the reduction of corporate overheads.

As announced on 2 February 2016, plans call for the payment of an ordinary
dividend of EUR 0.06, in each case, for the 2015/16 financial year and for
the 2016 abbreviated financial year. The dividend could be higher if there
is a significant improvement in the Russian economy - a potential
development that is relevant, above all, for the 2016 abbreviated financial
year.

The report by IMMOFINANZ AG on the first three quarters of 2015/16 as of 31
January 2016 will be available on the company's website under
http://www.immofinanz.com/en/investor-relations/financial-reports starting
on 17 March 2016.

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 5.8 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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Language: English
Company: IMMOFINANZ AG
Wienerbergstraße 11
1100 Wien
Austria
Phone: +43 (0) 1 88090 - 2291
Fax: +43 (0) 1 88090 - 8291
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 ; Wien (Amtlicher Handel /
Official Market)

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