07. August 2012 
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Immofinanz reports 13% drop in net profit
Austrian property company Immofinanz reported a drop in net profit of 13.4% to €271m for its fiscal year 2011/2012 (year to April). Operating income rose 4%, thanks to higher rental income and good proceeds from real estate sales. However, Immofinanz had shielded itself from rising interest rates via exchange rate derivatives. In fact, interest rates fell in the period, leading to higher provisioning which in turn dragged down profits. The effects of the derivative revaluation were not cash-effective, the company said. Net profit excluding forex effects and derivatives was up 25%.
Results of operations for the 2011/12 financial year totalled €478.6 million, which reflects an increase of 4.3%. Positive other revaluation results of €212.4 million (incl. foreign exchange effects) led to an improvement of over 60% in operating profit to €691.0 million (2010/11: € 424.1 million). This development is attributable, above all, to an increase in operating results, higher results from property revaluation (+ € 144.1 million) and higher foreign exchange effects (€+107.5 million). Earnings before tax were 6.9% lower at €318.8 million (2010/11: €342.3 million), whereby the decline was caused primarily by negative, non-cash valuation effects from derivatives that followed the drop in interest rates. The increase in results of operations was unable to fully offset the negative shift of € -123.1 million in other financial results, and net profit for 2011/12 therefore declined to € 271.4 million (2010/11: € 313.5 million).
Immofinanz CEO Eduard Zehetner gave a positive outlook on the current year. He expects profit from operations to rise from €479m last year to nearly €600m in 2012/2013. Dividends are projected to rise about 30% to around 20 cents per share. “We will try to sell more and to reinvest our money faster,” Zehetner said in a news conference on Monday. Through the adjustment of the portfolio and optimisation of the balance sheet, the Group will steadily improve the quality of the properties in its eight core markets and four asset classes. Free cash flows from the sales programme will be reinvested, above all, in new development projects, but also in high-quality standing investments. In this way, the share of directly owned property assets should increase to more than 90% of the balance sheet total over the medium-term. Immofinanz also intends to increase the portfolio turnover and thereby generate the funds to strengthen property development activities and to complete or selectively reactivate development projects. Regional focal points are currently being set in Russia, Austria, Poland and Germany.
More than half of Immofinanz’ assets are located in Eastern Europe. The company has fully acquired a huge shopping mall in Russia, from which it expects a boost to its operating profit of at least €50m.
Results of operations for the 2011/12 financial year totalled €478.6 million, which reflects an increase of 4.3%. Positive other revaluation results of €212.4 million (incl. foreign exchange effects) led to an improvement of over 60% in operating profit to €691.0 million (2010/11: € 424.1 million). This development is attributable, above all, to an increase in operating results, higher results from property revaluation (+ € 144.1 million) and higher foreign exchange effects (€+107.5 million). Earnings before tax were 6.9% lower at €318.8 million (2010/11: €342.3 million), whereby the decline was caused primarily by negative, non-cash valuation effects from derivatives that followed the drop in interest rates. The increase in results of operations was unable to fully offset the negative shift of € -123.1 million in other financial results, and net profit for 2011/12 therefore declined to € 271.4 million (2010/11: € 313.5 million).
Immofinanz CEO Eduard Zehetner gave a positive outlook on the current year. He expects profit from operations to rise from €479m last year to nearly €600m in 2012/2013. Dividends are projected to rise about 30% to around 20 cents per share. “We will try to sell more and to reinvest our money faster,” Zehetner said in a news conference on Monday. Through the adjustment of the portfolio and optimisation of the balance sheet, the Group will steadily improve the quality of the properties in its eight core markets and four asset classes. Free cash flows from the sales programme will be reinvested, above all, in new development projects, but also in high-quality standing investments. In this way, the share of directly owned property assets should increase to more than 90% of the balance sheet total over the medium-term. Immofinanz also intends to increase the portfolio turnover and thereby generate the funds to strengthen property development activities and to complete or selectively reactivate development projects. Regional focal points are currently being set in Russia, Austria, Poland and Germany.
More than half of Immofinanz’ assets are located in Eastern Europe. The company has fully acquired a huge shopping mall in Russia, from which it expects a boost to its operating profit of at least €50m.
