conwert Immobilien Invest SE: 1-9/2015 best operating result since founding

Vienna (pta033/24.11.2015/19:18 UTC+1) -
+ Net Rental Income margin as operative key indicator increased from 62.2% to 65.7%; vacancy rate decreased from 10.4% to 8.7%
+ Rental income increased by 1.8% for overall portfolio - 2.6% for core residential portfolio on like-for-like basis
+ Personnel expenses and other operating expenses cut from EUR49.3 mn by a total of 11.9% to EUR43.4 mn against previous year
+ EBIT improved by 89% to EUR142.9 mn - net result of revaluation EUR59.0 mn of hold-portfolio
+ Financial costs decreased in the first nine months by 35% to EUR(69.9) mn
+ FFO I in 1-9/2015 increased by almost 50% from EUR25.6 mn to EUR38.1 mn
+ EPRA NAV rose by 5.8% from EUR15.70/share by the end of the year 2014 to EUR16.61/share

conwert Immobilien Invest SE (conwert), listed on the Austrian ATX, managed to achieve an excellent result in the first nine months of the financial year 2015. The positive performance is the outcome of further progress at operating level, adjustments to the fair value of properties and the decrease of financial costs.

Total revenue increased in comparison to 2014 by 14% to EUR294.6 mn. This includes the decline in rental income by 6% from EUR181.4 mn to EUR170.2 mn due to property sales in the course of the portfolio streamlining as conwert continues to focus on residential property in metropolitan regions in Germany and Austria. Net rental income (NRI) was slightly below the previous year at EUR111.8 mn (1-9/2014: EUR112.9 mn). The net cold rent per sqm increased by 1.8% for the overall portfolio and on a like-for-like basis by 2.4% for the core portfolio and by 2.6% for the core residential portfolio. Because of the improvement of the overall vacancy rate and the decrease of property expenses generated by greater efficiency in the operating business the NRI-marge rose from 62.2% to 65.7% during the same period. On an adjusted basis deducting costs charged to tenants from rental income in order to compare the NRI margin to the German residentials it increased even at 87.4% (1-9/2014: 84.6%).

Because of the portfolio streamlining the sales revenues of properties increased in the first three quarters of 2015 to EUR118.9 mn, following from EUR70.9 mn in the comparable period. Of this total, approximately EUR70 mn are accounted for by commercial property sold in line with the strategy to focus on residential property in Germany and Austria. In this regard, the portfolio streamlining programme implemented by the management in March 2015 is well on track. The company expects sales between EUR150-200 mn in the commercial and non-core sector in 2015.

The vacancy rate has fallen in the first three quarters for the first time group-wide below 9% and reached 8.7% (1-9/2014: 10.4%). This is a decrease of around 16% in a year-on-year comparison. The vacancy rate in the core residential portfolio decreased even from 6.0% to only 4.5%. In the first nine months of 2015 property expenses decreased by 15% from EUR68.5 mn to EUR58.4 mn.

Additional increased efficiency has been attained with regards to personnel and other operational expenses. Personnel expenses decreased by 9% to EUR18.6 mn in the comparable period, while other operational expenses fell by 14% to EUR24.8 mn.

At EUR142.9 mn, earnings before interest and taxes (EBIT) exceeded that of the previous year (1-9/2014: EUR75.5 mn) by 89%. The strong rise in the EBIT is due to the improved operative performance and the net result of the cumulative adjustments to the fair value of the hold portfolio in the amount of EUR59 mn (1-9/2014: EUR(6) mn). The net result from all fair value adjustments made for the residential properties of the portfolio of conwert was EUR79.6 mn at the 30 September 2015. This was countered by the devaluation of commercial properties in Germany and Austria in the amount of EUR22.6 mn. On a like-for-like basis, the market value of the property assets rose by EUR105 mn (3.8%) since 31 December 2014.

The upward trend from the first half of 2015 continues also in the financial result. After the first nine months in 2015 the financial result improved significantly from EUR(103.3) mn to EUR(59) mn. While finance expenses had been impacted by massive negative non-cash effects of the SWAP in 2014, the slight rise of the SWAP-curve triggered a significant improved interest charge. As a result, finance costs decreased by 35% to EUR(69.9) mn from EUR(107.9) mn in the previous year. The cash-interest rate decreased as well by 15.8% from EUR(55.6) mn to EUR(46.8) mn.

Due to the substantial improvement in operative performance and decreased financial costs the result of common business (EBT) was EUR83.9 mn in 2015 (1-9/2014: EUR(27.8) mn). The consolidated earnings improved substantially by EUR88.5 mn to EUR68.6 mn (1-9/2014: EUR(19.9) mn). Overall, conwert managed to achieve the second best result and the best operating result ever.

The loan-to-value (LTV), i.e. debt in relation to property projects in consideration of cash and cash equivalents, further improved to 50.8% (1-9/2014: 54.7%). The LTV is thus already close to the LTV-goal of below 50%.

In line with the strong improved operating result and the decrease in financial costs the funds from operations before sales and one-off items (FFO I) in 1-9/2015 increased significantly by 49% to EUR38.1 mn (1-9/2014: EUR25.6 mn). FFO II (FFO I plus sales income) rose by 44% to EUR43.4 mn, following from EUR30.1 mn in the previous year. The EPRA NAV rose by 5.8% from EUR15.70/share by the end of the year 2014 to EUR16.61/share.

The management underlines to continue its strategy consequently. Wolfgang Beck, conwert CEO, says on the results: "The gratifying figures from the recent nine months of 2015 are the result of our increased operative profitability, an improved financing structure and the portfolio streamlining. We will adhere to this course and set further improvement measures on the financing side in 2015."

For the financial year 2015, conwert expects to be able to further progress towards sustained profit growth and improved profitability. In this regard, the management expects further savings on expenses and the vacancy rate to fall below 8%. The FFO I-Guidance of EUR48 mn for the financial year 2015 is confirmed and increased for 2016 from EUR60 mn to EUR65 mn. The total amount of sales from commercial and properties in non-core markets will be between EUR150-200 mn and between EUR300-350 mn in the financial year 2015 and 2016 respectively.

The interim report 1-9/2015 of conwert Immobilien Invest SE is available at http://www.conwert.com on Wednesday, 25 November 2015.

Key performance indicators		1-9/2015	1-9/2014	Change	2014
Rental income	EUR mn	170.2	181.4	-6.1%	237.3
Proceeds from sale of properties	EUR mn	118.9	70.9	67.8%	133.5
Revenues from property services	EUR mn	5.5	6.8	-19.0%	10.5
Total revenue	EUR mn	294.6	259.1	13.7%	381.2
EBITDA	EUR mn	86.9	82.5	5.4%	109.9
EBIT	EUR mn	142.9	75.5	89.2%	121.6
EBT	EUR mn	83.9	(27.8)	-	(9.9)
Funds from Operations before sales income (FFO I) *)	EUR mn	38.1	25.6	48.7%	34.8
Funds from Operations including sales income (FFO II) **)	EUR mn	43.4	30.1	44.3%	39.0
Net Rental Income (NRI)	EUR mn	111.8	112.9	-1.0%	150.7
NRI-Margin	%	65.7	62.2	5.5%	63.5
Adjusted NRI-Margin ***)	%	87.4	84.6	3.3%	85.0
Basic earnings /Share	EUR	0.78	(0.28)	-	(0.14)
Diluted earnings /Share	EUR	0.71	(0.28)	-	(0.14)
FFO I **) / Share	EUR	0.46	0.31	47.8 %	0.42

*) 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 not including non-controlling interests + restructuring costs/one-off costs
**) FFO II: FFO I + difference between sales and carrying amount of properties sold - operating expenses of sales income
***) Adjusted NRI margin: Margin on net rental income (rental income less running costs charged to tenants)

Balance sheet indicators		30/09/2015	31/12/2014	Change
Total assets	EUR mn	2,955.1	2,974.0	-0.6%
Non-current loans and borrowings	EUR mn	1,046.6	1,120.4	-6.6%
Current loans and borrowings	EUR mn	208.0	221.3	-6.0%
Equity	EUR mn	1,200.8	1,104.6	8.7%
Equity ratio	%	40.6	37.1	9.4%
LTV	%	50.8	53.6	-5.2%
Basic EPRA NAV / Aktie	EUR	16.61	15.70	5.8%

Property portfolio		30/09/2015	30/09/2014	Change	31/12/2014
Rental units	No.	29,663	31,042	-4.4%	30.385
Parking spaces	No.	12,346	13,890	-11.1%	13.573
Total usable space	1000 sqm	2,338.0	2,528.3	-7.5%	2.473
Property assets	EUR mn	2,802.2	2,827.7	-0.9%	2.810,5
Vacancy rate	%	8.7	10.4	-16.3%	9.0
ø Rent	EUR/sqm/m.	6.40	6.29	1.8%	6.27

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This release 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 here for a variety of reasons.

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