conwert Immobilien Invest SE: conwert on course for year of record operational results

Vienna, 26 November 2013 (pta034/26.11.2013/22:00 UTC+1) -
+ Profit for the period up 143.8% from EUR 12.8 million to EUR 31.2 million
+ Rental income increases by 17.4% to EUR 167.6 million after KWG takeover
+ Strong rise in operating efficiency with NRI margin of 64.2% (previously 59.3%)
+ Positive forecast for full year 2013 confirmed

conwert Immobilien Invest SE, which is traded on the Austrian ATX, has concluded the first nine months of 2013 with strong results in line with the higher forecasts announced in the summer of this year.

"conwert has achieved strong growth and a strong operational result following its achieved strategic repositioning. Today we are already well positioned with regard to efficiency and profitability and we expect to see further positive effects in the coming months", said Johannes Meran, Chairman of the Administrative Board of conwert.

Operating performance
The company focuses on managing its portfolio of residential properties and achieved a 17.4% increase in rental income to EUR 167.6 million in the reporting period (1-9/2012: EUR 142.8 million). Here conwert profited in particular from the successful acquisition of a majority stake and full consolidation of KWG Kommunale Wohnen AG (KWG). The operating efficiency of the rental portfolio has also undergone a significant improvement, as indicated by the NRI margin (net rental income) which rose from 59.3% to 64.2%. FFO I (Funds from Operations before sales income), a key indicator of conwert's operational success, amounted to EUR 27.6 million after the first nine months (1-9/2012: EUR 13.4 million). This figure excludes restructuring expenses of around EUR 3.1 million (1-9/2012: EUR 3.8 million).

In the course of measures to improve efficiency and make the most of potential synergies, conwert set the goal of reducing staffing levels in 2013 from a total of 713 FTEs to 555 FTEs, as well as reducing the number of branch offices. This goal had already been achieved as of the third quarter 2013. These measures will, however, only take full effect on personnel expenses in 2014, as many employees left the firm over the course of the first nine months and severance payments and one-off settlements are therefore recognised in the first three quarters. conwert has thereby reduced staffing levels by around 22% in the first nine months.

Property sales
At the reporting date 30 September 2013, conwert had sold properties with a total value of EUR 167.3 million in the current year (1-9/2012: EUR 254.7 million). The margin achieved was 12.8% over the IFRS carrying amount (1-9/2012: 8.8%) and thereby exceeded the target range for 2013 of 7-9%. In line with conwert's strategic focus on residential property, the company sold commercial property amounting to EUR 66.9 million in the first nine months of the year with an average margin of 5.2%.

Finance costs
A strong improvement was also seen in the first nine months of 2013 with regard to net finance costs, which decreased by 18.5% to EUR (56.3) million (1-9/2012: EUR (69.1) million). The key reason for this was the restructuring of the portfolio of interest hedges and the change in value of ineffective swaps compared to the first three quarters 2012.

Loan-to-value (LTV) stood at 54.3% as of 30 September 2013 and therefore remains in the medium-term target range of 50-55%. The equity ratio remained stable at 37.2% as of the reporting date (1-9/2012: 38.8%).

Consolidated profits
At the end of the third quarter conwert had achieved an increase of around 90% in EBT against the previous year to EUR 42.5 million (1-9/2012: EUR 22.5 million). Net profit for the period after tax more than doubled from EUR 12.8 million to EUR 31.2 million, an increase of 143.8%. This underlines the best operating results in conwert's history.

The carrying amount of equity per share increased accordingly by 5.3% from EUR 12.50 per share at the end of 2012 to EUR 13.16 per share at 30 September 2013. NAV per share remained unchanged against the end of 2012 at EUR 15.79 per share. The share currently trades at a discount to the NAV of around 40%.

The search for a new CEO is underway and progressing as planned; conwert expects to announce an additional Executive Director as CEO in the coming weeks.
In the fourth quarter conwert expects the continuing integration measures of the various conwert property portfolios to yield additional synergy effects along with a stronger consolidation of existing asset management. Furthermore, conwert anticipates a positive impact on the financial performance in the fourth quarter of 2013 from the acquisition of a German portfolio in August with around 4,000 units in Berlin, Leipzig and North-Rhine Westphalia, concluded on 4 October 2013.

Guidance on full year results 2013
Given the strong performance in the first nine months, conwert is confident of achieving the full-year targets announced in the summer. FFO before sales is expected to be around EUR 36 million. Restructuring charges of around EUR 3-5 million in total for 2013 would be deducted from this. Sales revenue is expected to be around EUR 250 million, with a sales margin of a probable 7-9%. For the full year 2013 conwert expects a significant reduction in personnel and other operating expenses from almost EUR 95 million in 2010 to around EUR 70 million. EBT at year end is likely to be EUR 50-55 million (not taking into account the impact of the conwert portfolio revaluation at year end 2013).

The 1-9/2013 financial report of conwert Immobilien Invest SE is available on the website http://www.conwert.at.

Company indicators

		1-9/2013	1-9/2012	Change in %	2012
Rental income	mill. EUR	167.6	142.8	17.4	188.1
Proceeds on sale	mill. EUR	167.3	254.7	(34.3)	409.6
Service revenues	mill. EUR	12.6	19.4	(35.1)	27.3
Total revenues	mill. EUR	347.5	416.9	(16.6)	625.1
Earnings before interest, taxes and depreciation (EBITDA)	mill. EUR	92.8	80.8	14.9	97.2
Depreciation, amortisation and other impairment charges	mill. EUR	(0.7)	(1.2)	41.7	(118.5)
Earnings before interest and taxes (EBIT)	mill. EUR	98.8	91.6	7.9	(58.5)
Funds from operations before sales income *) (FFO I)	mill. EUR	27.6	13.4	105.9	20.7
Funds from operations after sales income **) (FFO II)	mill. EUR	40.0	44.6	(10.3)	43.0
Net rental income (NRI)	mill. EUR	107.6	84.7	27.0	110.5
NRI margin	%	64.2	59.3	8.3	58.7
Basic earnings/share	EUR	0.34	0.15	126.7	(2.06)
Diluted earnings/share	EUR	0.27	0.15	80.0	(1.61)
FFO I *)/share	EUR	0.30	0.12	150.0	0.25

*) FFO I: Earnings before tax (EBT) - difference between sales and carrying amount of sold properties + operating expenses of sales income -/+ revaluation gains/losses + depreciation and value adjustments + non-cash components of financial income and other non-cash costs + restructuring charges
**) FFO II: Earnings before tax (EBT) - net gain/loss from fair value adjustments + difference between capital gains and IFRS capital gains + depreciation + non-cash components of financial income and other non-cash costs

Balance sheet indicators

		30/09/2013	30/09/2012	Change in %	31/12/2012
Total assets	mill. EUR	3,048.0	3,121.9	(2.4)	2,849.8
Non-current loans and borrowings	mill. EUR	1,053.5	927.6	13.6	921.1
Current loans and borrowings	mill. EUR	327.2	372.2	12.1	308.0
Equity	mill. EUR	1,134.2	1,211.9	(6.4)	1,025.0
Equity ratio	%	37.2	38.8	(4.1)	36.0
Gearing	%	146.8	133.2	10.2	146.9
EPRA NAV (basic)/share	EUR	15.79	18.06	12.6	15.79

Property indicators

		30/09/2013	30/09/2012	Change in %	31/12/2012
Properties	No.	1,728	1,562	10.6	1,502
Rental units	No.	28,961	21,201	36.6	20,479
Parking spaces	No.	13,139	11,004	19.4	10,795
Total usable space	sqm	2,425,077	2,027,124	19.6	1,924,433
Property assets	mill. EUR	2,799	2,688	4.1	2,511

This report contains forward-looking estimates and statements that were made on the basis of the information available at this time. Forward-looking statements reflect the point of view at the time they are made. We would like to point out that the actual circumstances and, consequently, the actual results realised at a later date may differ from the forecasts presented in this report for a variety of reasons.

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