conwert Immobilien Invest SE: conwert achieves strong operating results for 2013 business year

Vienna (pta032/25.03.2014/19:15 UTC+1) -
+ Earnings before tax (EBT) of EUR 48.7 mn
+ FFO I increases by 61.6% to EUR 36.2 mn
+ Rental income up by 20.8% to EUR 227.3 mn
+ Further improvement of NRI margin from 58.7% to 62.2%
+ Dividend of EUR 0.10 per share for 2013 planned due to high tax burden

conwert Immobilien Invest SE, listed on the Austrian ATX, achieved strong operating results in the 2013 business year and has met its earnings targets for the full year.

Operating results
In the 2013 business year conwert achieved EBT amounting to EUR 48.7 mn (2012: EUR (154.6) mn). After accounting for one-off items of EUR 5.8 mn, earnings are therefore within the target of EUR 50-55 mn set at the beginning of the year. Operating cash income (FFO I: Funds from operations before sales income and one-off items) improved year on year by 61.6% to EUR 36.2 mn (2012: EUR 22.4 mn), less one-off items of EUR 5.8 mn. This means that the target set for FFO I at the start of the year of EUR 25 mn, which was increased upon publication of the interim report on the first half of 2013 to EUR 36 mn less EUR 3-5 mn in one-off costs, was also met.

Following the takeover of KWG Kommunale Wohnen AG (KWG) and the GE Capital Real Estate Germany portfolio (GE portfolio) last year, rental income in 2013 rose from EUR 188.1 mn by 20.8% to EUR 227.3 mn. conwert increased the NRI margin (NRI: Net Rental Income) in the same period, thereby increasing the management efficiency of the property portfolio from 58.7% to 62.2%.

Property sales
In line with targets, conwert sold properties with a total value of EUR 273.9 mn (2012: EUR 409.6 mn) in 2013. The margins achieved were 11.1% above the IFRS carrying amount and therefore above the 7-9% target range set for 2013, not least because of margins which were higher than expected in the commercial property sector. Totalling EUR 103.4 mn, around 38% of total proceeds from the sale of property in 2013 related to commercial property.

Turning to the portfolio as a whole, conwert cut vacancy rates for the fifth year in a row. At year end 2013 the vacancy rate for the entire portfolio stood at 10.1% (31/12/2012: 10.7%).

With regard to providing services for third parties, the service range was streamlined last year with a focus on selected service mandates. This led to a 44.3% decrease in revenue from property services from EUR 27.3 mn to EUR 15.2 mn.

Total revenue for the full year 2013 thus amounted to EUR 516.4 mn (2012: EUR 625.1 mn). One main reason for this decrease of around EUR 100 mn on the previous year is the planned reduction in sales revenue.

Portfolio optimisation
At 31 December 2013 the total value of the conwert portfolio amounted to EUR 2,868.1 mn (31/12/2012: EUR 2,510.7 mn), consisting of a total of 32,120 rental units (31/12/2012: 20,479 rental units) and 14,187 parking spaces (31/12/2012: 10,795 parking spaces) with total usable space of 2.6 mn sqm (31/12/2012: 1.9 mn sqm). In the last business year there was a strong increase in the presence in Germany; for a total of EUR 178.8 mn including capex of around EUR 33 mn for the next three years, conwert acquired the GE portfolio with around 4,000 units, primarily in the core markets of Berlin, Leipzig and North Rhine-Westphalia.

Cutting costs
Other operating expenses decreased in 2013 due to the integration of KWG and consolidation of the GE portfolio, along with the related restructuring measures, from EUR 49.0 mn (incl. KWG on a pro forma basis) by 8.2% to EUR 45.0 mn.

In terms of personnel expenses, conwert achieved a significant improvement by 17% from EUR 38.8 mn (incl. KWG on a pro forma basis) to EUR 32.3 mn, surpassing the planned figures. The goal of reducing personnel to around 550 employees, primarily by eliminating dual functions, had already been achieved in the third quarter 2013. Adjustments in the site structure to meet the current market conditions led to a reduction in branch offices from 47 to 35, which was largely completed in 2013.

Net financial income and valuation
Net financial income improved by 22.3% on 2012 to EUR 74.7 mn (2012: EUR 96.1 mn). One key reason for this was the positive change in ineffective swaps, as well as the hedging portfolio restructuring at the beginning of last year. Net revaluation gains amounted to EUR 6.5 mn (2012: EUR (172.1) mn). Taking into account the fact that EUR 6.5 mn from the gain on a bargain purchase, which had been recognised in the first three quarters, was reversed in the fourth quarter, the result was in line with the company's expectations.

Consolidated earnings and LTV
As at 31 December 2013 the loan-to-value ratio (LTV) was 55.9%, thereby just slightly below the target range of 50 to 55%. The equity ratio remained unchanged at 35.7% (31/12/2012: 35.7%).
conwert generated group profits after tax of EUR 13.3 mn (2012: EUR (172.1) mn). The high tax burden of EUR 35.4 mn was driven by valuation adjustments of deferred taxes and a recognition exception of deferred taxes for acquisitions.

Outlook
In light of the group profit a dividend of EUR 0.10 per share will be proposed to shareholders at the next ordinary Annual General Meeting on 7 May 2014. This translates into EUR 8.3 mn based on the current number of shares outstanding.

Looking forward to the current business year 2014, conwert plans to successfully conclude the integration of KWG and the GE portfolio. In line with the strategy of being a long-time holder of high-value residential property, conwert is aiming for further optimisation of the portfolio in 2014 and subsequent sales proceeds of EUR 150 to EUR 200 mn. Another goal is to continue to reduce vacancy rates in the core portfolio in Germany and Austria.

Johannes Meran will step down as Chairman of the Administrative Board after the presentation of the 2013 company results and resign as per 26th March as announced today. He had already announced in November of last year that he will resign in 2014 after the introduction of Clemens Schneider as new CEO.

The 2013 Annual Report of conwert Immobilien Invest SE will be available tomorrow as planned on the website www.conwert.com.

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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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Emitter:	conwert Immobilien Invest SE Alserbachstraße 32 1090 Vienna Austria
Contact Person:	Clemens Billek
Phone:	+43 / 1 / 521 45-700
E-Mail:	cwi@conwert.at
Website:	www.conwert.com
ISIN(s):	AT0000697750 (Share)
Stock Exchange(s):	Vienna Stock Exchange (Official Trade)