conwert Immobilien Invest SE: conwert achieves record half-year

Vienna (pta034/23.08.2016/23:00 UTC+2) -
+ FFO I up by 52.6% to EUR 39.3 mn
+ Net earnings of EUR 74.9 mn
+ Non-core sales of around EUR 142 mn
+ FFO I guidance for 2016 increased to over EUR 75 mn

conwert Immobilien Invest SE (conwert), traded on the Austrian ATX, has achieved the best half-year result in the company's history. This pleasing development was driven by the strong operating performance and the fair value gains for the property portfolio. FFO I (funds from operations before sales and one-off items), the most important indicator for conwert, underwent a significant rise of 52.6% against the previous year to EUR 39.3 mn (1-6/2015: EUR 25.7 mn). conwert tripled its group earnings after tax (net profit) to reach a new record high of EUR 74.9 mn (1-6/2015: EUR 24.5 mn). Revenues also grew by 26.0% to EUR 264.3 mn (1-6/2015: EUR 209.7 mn).

CEO Wolfgang Beck on the positive interim results: "The record-breaking half-year is the result of the consistent implementation of our strategy. We are making good progress with optimising the portfolio, structures and costs; today all of the key performance indicators are much better than they were twelve months ago. conwert now has a strong basis to undertake further optimisation measures and once again have a stronger presence as an acquirer. We have already signed the first acquisitions of around EUR 90 mn, which will add additional value. This is why we have decided to raise our FFO I guidance for 2016 to over EUR 75 mn."

Strong performance through proactive asset management
conwert achieved a strong operating performance in the period under review. Average rents per square metre increased and vacancy rates were reduced yet again. In the core portfolio like-for-like rents increased by 2.2%, while vacancy rates in the core residential portfolio fell from 4.7% to 3.4%. Thanks to this good performance, the Net Rental Result (NRR) of EUR 71.6 mn held steady at around the level of the previous year (1-6/2015: EUR 74.7 mn), despite the smaller property portfolio as a result of sales. The NRR margin rose from 65.8% to 66.8%.

Proactive asset management and the positive growth on the markets led to a significant valuation increase in the property portfolio of EUR 95.5 mn (1-6/2015: EUR 3.0 mn). Earnings before interest and taxes (EBIT) climbed by 137.4% to EUR 146.0 mn (1-6/2015: EUR 61.5 mn).

In terms of revenue, the further optimisation of the portfolio had a positive impact. In the course of streamlining the portfolio conwert already achieved sales in the first - and typically weaker - half of the year valued at EUR 153.6 mn (1-6/2015: EUR 92.5 mn). Of this total, EUR 142.3 mn related to the non-core sector (1-6/2015: EUR 78.9 mn). When all of the sales announced by August are included, the sales volume is already at around EUR 185 mn. Rental income slipped back slightly in the first half to EUR 107.1 mn (1-6/2015: EUR 113.5 mn) because of sales.

Further improvements to the financing and balance-sheet structure
Progress in terms of financing was reflected in the financing costs with an effect on cash in the first half of the year. These were cut in half compared to the same period of the previous year from EUR (31.4) mn to the current EUR (15.9) mn. In contrast, the financial result was temporarily hampered by non-cash effects from the remaining swaps and totalled EUR (43.6) mn (1-6/2015: EUR (32.3) mn).

The loan to value (LTV) - debt in relation to property projects under inclusion of cash and cash equivalents - underwent a further reduction and stood at just 44.6% at 30 June 2016 (31/12/2015: 51.0%). The equity ratio rose to 47.1% (31/12/2015: 43.7%).

Outlook: record year expected
For the remainder of the business year 2016 conwert expects the market environment to remain positive. The company will continue to consistently pursue the optimisation of the portfolio and asset management, as well as the sale of properties from the non-core portfolio. conwert is planning further reductions in the properties in the non-core portfolio and intends to sell a total of around EUR 300-350 mn worth of non-core properties in 2016. The sales proceeds should increasingly be reinvested in property portfolios in the core regions. With regard to earnings, the optimisation and cost-cutting measures which have already been introduced are expected to have a positive impact from the fourth quarter. From today's viewpoint, conwert thereby expects a new record year and has increased the guidance for FFO I (funds from operations before sales and one-off items) to more than EUR 75 mn (previously EUR 70 mn).

The interim report 1-6/2016 of conwert Immobilien Invest SE is available on the website http://www.conwert.com.

Key performance indicators

		1-6/2016	1-6/2015	Change	1-12/2015
Rental income	EUR mn	107.1	113.5	-5.7%	226.1
Proceeds from sale of properties	EUR mn	153.6	92.5	66.0%	272.6
Revenues from property services	EUR mn	3.6	3.7	-2.0%	7.7
Total revenue	EUR mn	264.3	209.7	26.0%	506.4
EBITDA	EUR mn	51.4	59.2	-13.2%	116.6
EBIT	EUR mn	146.0	61.5	137.4	181.3
EBT	EUR mn	102.5	29.2	n.m.	100.7
Group earnings after tax*)	EUR mn	74.9	24.5	n.m.	83.3
Funds from operations before sales income (FFO I)**)	EUR mn	39.3	25.7	52.6%	53.4
Funds from operations after sales income (FFO II)***)	EUR mn	39.4	29.0	35.7%	64.8
Net Rental Result (NRR)	EUR mn	71.6	74.7	-4.1%	148.8
NRR margin	%	66.8	65.8	1.6%	65.8
Adjusted NRR margin****)	%	89.1	87.1	2.3%	87.2
Basic earnings/share*)	EUR	0.75	0.27	176.8%	0.95
Diluted earnings/share*)	EUR	0.71	0.27	162.7%	0.85
FFO I**)/share	EUR	0.43	0.31	37.0%	0.64
Financial result	EUR mn	(43.6)	(32.3)	-34.8%	(80.6)

Balance sheet indicators

		30/06/2016	31/12/2015	Change
Total assets*)	EUR mn	2,872.5	2,886.1	-0.5%
Non-current loans and borrowings	EUR mn	928.6	1,028.2	-9.7%
Current loans and borrowings	EUR mn	247.3	246.3	0.4%
Equity*)	EUR mn	1,354.0	1,260.6	7.4%
Equity ratio*)	%	47.1	43.7	7.9%
Gearing*)	%	90.3	107.8	-16.2%
Diluted EPRA NAV/share*)	EUR	16.40	15.61	5.0%

Property indicators

		30/06/2016	30/06/2015	Change	31/12/2015
Rental units	No.	26,687	29,896	-10.7%	27,494
Parking spaces	No.	10,623	12,340	-13.9%	11,386
Total usable space	sqm	2,084	2,363	-11.8%	2,175,867
Property assets	EUR mn	2,677.7	2,757.1	-2.9%	2,692.3
Vacancy rate	%	6.7	8.9	-24.3%	6.6
ø Rent	EUR /sqm/m	6.40	6.36	0.5%	6.42
l-f-l NCR growth (% yoy)	%	1.1	1.1*****)	-	1.5

****) Retrospective adjustment of the equity breakdown to majority and minority shareholders due to the reallocation of a capital reserve according to IAS 8.41 in the half-year financial statement 2016 for 2015.
**) FFO I: Earnings before tax (EBT) - difference between sales and carrying amount of sold properties + operating expenses of sales result -/+ revaluation result + depreciation and value adjustments + non-cash part of financial result and other non-cash costs + one-off charges - cash taxes on net rental business
***) FFO II: FFO I + difference between sales and carrying amount of sold properties - operating expenses of sales result
****) Adjusted NRR margin: margin on net rental income (rental income less running costs charged to tenants)
*****) Hold portfolio

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This release contains forward-looking 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 realized at a later date, may differ from the forecasts presented here for a variety of reasons.

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