DGAP-News

IMMOFINANZ Group records increase in net profit for 2013/14 - Property sales top EUR 1 billion

DGAP-News: IMMOFINANZ AG / Key word(s): Real Estate/Final Results
IMMOFINANZ Group records increase in net profit for 2013/14 - Property
sales top EUR 1 billion

01.08.2014 / 17:40

---------------------------------------------------------------------

KEY FIGURES (in MEUR)* // 1 May 2013 - 30 April 2014 // Δ in % // 1 Mai
2012 - 30 April 2013

Rental income // 506.7 // -7.2% // 546.2
Rental income like-for-like // 472.7 // -1.3% // 478.7
Results of asset management // 401.2 // -5.9% // 426.5
Results of property sales // 32.8 // -52.4% // 68.8
Results of property development // -39.9 // -19.0% // -33.5
Expenses not directly attributable // -92.8 // 3.0% // -95.6
Results of operations // 319.2 // -19.5% // 396.4
Operating profit (EBIT) // 521.1 // 54.0% // 338.4
Net profit** // 180.4 // 62.8% // 110.8

* The spin-off of the residential property subsidiary BUWOG led to the
adjustment of values on individual lines for both of the above financial
years.
** Net profit includes earnings from discontinued operations.

IMMOFINANZ Group announces net profit totalling EUR 180.4 million for
2013/14, for a year-on-year increase of 62.8%. Rental income was lower as a
result of the extensive, planned property sales. The delayed completion of
the GOODZONE shopping center in Moscow prevented the full recovery of this
decline during the past year. Rental income amounted to EUR 506.7 million
(-7.2%) and results of operations totalled EUR 319.2 million (-19.5%). In
like-for-like comparison (i.e. after an adjustment for new acquisitions,
completions and sales), rental income was generally stable (-1.3% to EUR
472.7 million). Property sales set a new record at roughly EUR 1 billion.

"The past financial year was shaped by the successful BUWOG spin-off. BUWOG
has been very well received by the capital market - the discount to the net
asset value has declined significantly", explained Eduard Zehetner, CEO of
IMMOFINANZ Group. "In the development area, we completed our GOODZONE
shopping center in Moscow. The original plans called for GOODZONE to make a
contribution to rental income during the entire 2013/14 financial year and
offset the properties we sold, in particular the Silesia City Center. This
will now be the case in 2014/15."

Results of property sales totalled EUR 32.8 million (2012/13: EUR 68.8
million). Properties, including funds, with a combined value of slightly
over EUR 1 billion were sold during 2013/14 (2012/13: EUR 661.3 million).
"We originally intended to sell EUR 2.5 billion of properties over a
five-year period. After only four years, we had reached a volume of EUR 2.7
billion - and that at a double-digit margin over the book value", added
Zehetner. In accordance with IFRS, the revaluation gains connected with the
two largest sales - the Silesia City Center and the Egerkingen logistics
property - were included in results for 2012/13, but the derecognition of
the properties and the cash flows were only recorded in 2013/14.

Results of property development amounted to EUR -39.9 million (2012/13: EUR
-33.5 million). These negative results were caused, among others, by delays
and construction cost overruns on the GOODZONE project in Moscow due to the
bankruptcy of the former general contractor and the higher discount rates
used by the appraisers for property valuation due to the current political
situation. Based on the comparatively low valuation of GOODZONE,
appropriate increases in value can be expected over the coming years.

Revaluation results adjusted for foreign exchange effects amounted to EUR
-177.9 million (2012/13: EUR -31.4 million) and are attributable, above
all, to the Russian property portfolio. These results reflect the political
unrest in Ukraine and the previously imposed, as well as potential
sanctions against Russia. Revaluation results resulting from foreign
exchange effects improved from EUR 96.6 million to EUR 311.0 million, above
all due to an increase in the Euro versus the Russian Ruble during the
reporting year. The revaluation results also include a positive
non-recurring effect of EUR 77.7 million from an earn-out adjustment for
the Rostokino shopping center in Moscow (versus a negative non-recurring
effect of EUR -106.4 million in the prior year). This positive effect
reflected successful negotiations by IMMOFINANZ over the price for the
remaining 50% of the shopping center.

Net profit rose by 62.8% to EUR 180.4 million. Diluted earnings per share
equalled EUR 0.18 as of 30 April 2014 (2012/13: EUR 0.11). The net asset
value declined from EUR 5.79 to EUR 4.57 as of 30 April 2014, above all due
to the spin-off of BUWOG.

OUTLOOK:

"We are expecting continued positive development in our core markets, they
should benefit from an ongoing gradual economic recovery. This is also true
for Russia, assuming an escalation of the crisis and long-term negative
effects on the purchasing power of the population can be avoided",
indicated CEO Eduard Zehetner.

The political tensions between Russia and Ukraine and the reciprocal
economic sanctions between the EU and Russia represent uncertainty factors.
The effects of this crisis on the commercial development of IMMOFINANZ
Group's target markets, above all Russia, cannot be estimated at the
present time. "Neither a weak Ruble nor underlying fears of war among the
population would be beneficial for our business in Russia over the medium-
to long-term because either of these factors could lead to decline in
consumer spending. We therefore hope to see an early easing of the
situation in Ukraine. In general, Russia still has substantial potential
for growth," added Zehetner.

The rental income from the Russian portfolio is generally coupled to the
Euro or US Dollar, but an ongoing decline in the Ruble would have a
negative effect on tenants' cost structures. As indicated in the report on
the first three quarters of 2013/14, short-term arrangements were concluded
with a number of tenants in the Moscow shopping centers to reduce the
currency-related pressure. This also proved to be a sustainable procedure
during the 2008/09 financial crisis.

Asset Management will continue to focus on the further reduction of
vacancies in the individual asset classes. A wide range of operational
measures (stronger customer orientation and local market presence through
decentralisation, relationship and key account management etc.) is designed
to raise occupancy rates in the office segment to the retail level (> 90%)
over the medium-term.

The goal for Development is to increase activities and generate solid
earnings contributions. As of 30 April 2014 the development projects under
construction had an expected post-completion fair value of EUR 773.2
million. This level is expected to increase up to EUR 2.0 billion over the
medium-term, whereby the focus will be directed to the markets in Germany,
Poland, Russia and Romania.

Plans for Trade call for maintaining the speed reached in property sales
during the past years, which represents an average annual volume of approx.
EUR 500.0 million to EUR 600.0 million. The Executive Board is optimistic
that the realisable sale prices will continue to confirm the conservative
valuation approach.

The IMMOFINANZ Executive Board will not propose a dividend payment to the
annual general meeting for the 2013/14 financial year. This decision is
based, above all, on the fact that IMMOFINANZ invested major parts of its
internally generated funds in German residential properties during the past
year. This strategy supported the positioning of BUWOG as a German-Austrian
residential property company and paved the way for the majority spin-off
from IMMOFINANZ.

The dividend payment should be resumed starting with the current financial
year. From the present point of view, a distribution of EUR 0.15 to EUR
0.20 per share is targeted for 2014/15, whereby a combination of dividend
and share buyback programme is possible.

DEVELOPMENTS IN DETAIL:

INCOME STATEMENT

Results of asset management

Results of asset management include rental income, other revenues,
operating income and operating costs as well as directly allocated
expenses. Rental income fell by 7.2% to EUR 506.7 million in 2013/14
(2012/13: EUR 546.2 million). This decline resulted from the planned sale
of properties and was not fully offset due to the delayed completion of the
GOODZONE shopping center in Moscow. The compensatory effects of the
reinvestment will only take effect during the 2014/15 financial year and
equalise these declines when the shopping center reaches full operations.
Other rental income, which includes the residential and hotel asset
classes, was substantially lower during the reporting year. This decline
reflects IMMOFINANZ Group's strategy to withdraw from these areas of
business. The property sales in these asset classes were reflected in a
further sharpening of the corporate profile. Further planned sales will
lead to a continued decline in other rental income in the future. Among the
properties sold during the reporting year was the Hilton Vienna Danube.

In like-for-like comparison (i.e. after an adjustment for new acquisitions,
completions and sales), rental income was generally stable (-1.3% from EUR
478.7 million to EUR 472.7 million).

Revenues declined - similar to rental income - by 7.8% to EUR 643.8
million. Results of asset management totalled EUR 401.2 million, for a
year-on-year decrease of 5.9%. This decrease was less than the change in
revenues and rental income due to a reduction in costs, above all
maintenance and building owner's expenses.

Asset management will continue to focus on the further reduction of
vacancies in the individual asset classes. A wide range of operational
measures (stronger customer orientation and local market presence through
decentralisation, relationship and key account management etc.) should
raise occupancy rates in the office segment to the retail level (> 90%)
over the medium-term.

Results of property sales

Results of property sales amounted to EUR 32.8 million in 2013/14 (2012/13:
EUR 68.8 million). Properties with a combined value of EUR 863.1 million
were sold during the first three quarters alone and marked the premature
conclusion of the five-year, EUR 2.5 billion sales programme that was
launched at the beginning of 2010/11. Property sales, including fund sales,
totalled EUR 2,671.1 million from May 2010 to April 2014. IMMOFINANZ Group
plans to maintain the speed reached in the transaction area during the past
years, which represents an average annual volume of approx. EUR 500.0
million to EUR 600.0 million.

The portfolio optimisation involved the sale of smaller properties in
Austria as well as the Hilton Vienna Danube in Vienna, the retail warehouse
in Horn, the Silesia City Center in Poland and the Egerkingen logistics
property in Switzerland. The sale of the Silesia City Center shopping
center for EUR 412.0 million to an international consortium headed by
Allianz represents one of the largest transactions on the Eastern European
real estate market in recent years. In accordance with IFRS, the
revaluation gains connected with the Silesia and Egerkingen sales were
included in the financial statements as of 30 April 2013, while the
derecognition of the properties and the cash flows were reported in
2013/14. In addition to further cycle­optimised sales, the portfolio
optimisation will continue during 2014/15 (exit from non-core countries and
non-strategic asset classes) above all in Switzerland and the USA.

Results of property development

Results of property development cover the sale of real estate inventories
as well as the valuation of development projects completed during the
reporting year or currently in progress. In 2013/14 results of property
development equalled EUR -39.9 million (2012/13: EUR -33.5 million). These
negative results were caused, among others, by delays and construction cost
overruns on the GOODZONE project in Moscow due to the bankruptcy of the
former general contractor and the higher discount rates used by the
appraisers for property valuation due to the current political situation.
Based on the comparatively low valuation of GOODZONE, appropriate increases
in value can be expected over the coming years.

After the end of the reporting year, the first condominium apartments in
the Gerling Quartier in Cologne were transferred to their new owners. The
first phase of construction on the Gerling Quartier should be completed in
2014/15. In addition, IMMOFINANZ Group's first VIVO! shopping center is
scheduled to open in Pila (Poland) during the final quarter of 2014 and a
further VIVO! in the Polish city of Stalowa Wola will follow during 2015.

Results of operations

Results of operations amounted to EUR 319.2 million, or 19.5% below the
previous year (EUR 396.4 million). This decline is attributable primarily
to lower rental revenues and lower results from property sales. Expenses
not directly attributable (overhead costs and personnel expenses) were
reduced by 3.0% to EUR -92.8 million (2012/13: EUR -95.6 million) - in
spite of the higher expenses connected with the BUWOG spin-off.

EBIT, financial results and EBT

EBIT rose by 54.0% year-on-year to EUR 521.1 million in 2013/14. Other
revaluation results were positive at EUR 201.9 million (2012/13: EUR -58.0
million). Revaluation results adjusted for foreign exchange effects
amounted to EUR -177.9 million (2012/13: EUR -31.4 million) and are
attributable, above all, to the Russian property portfolio. These results
reflect the political unrest in Ukraine and the previously imposed, as well
as potential sanctions against Russia. Revaluation results resulting from
foreign exchange effects improved from EUR 96.6 million to EUR 311.0
million, above all due to an increase in the Euro versus the Russian Ruble
during the reporting year. The revaluation results also include a positive
non-recurring effect of EUR 77.7 million from an earn-out adjustment for
the Rostokino shopping center in Moscow (versus a negative non-recurring
effect of EUR -106.4 million in the prior year). This positive effect
reflected successful negotiations by IMMOFINANZ over the price for the
remaining 50% of the shopping center.

Financial results declined slightly to EUR -290.3 million (2012/13: EUR
-275.1 million). Financing costs were reduced by 5.8% to EUR -203.7
million, among others through the sale of properties. Financial results
also include non-cash foreign exchange effects of EUR -135.8 million
(2012/13: EUR -32.5 million), which more or less represent the counterparts
to the currency-related value increases in the Russian portfolio. The share
of profit/loss from associated companies increased, among others, due to
the positive development of the Hungarian Trigranit investment and a
valuation effect from the BUWOG investment to EUR 43.5 million (2012/13:
EUR -2.9 million).

The earn-out adjustment for the purchase of the remaining 50% of Rostokino
and positive foreign exchange effects led to an increase in earnings before
tax to EUR 230.8 million (2012/13: EUR 63.2 million).

Net profit

Net profit rose by 62.8% to EUR 180.4 million. The year-on-year increase in
income taxes is attributable to property sales and to subsequent tax
payments following a tax audit in Russia. The increase in deferred taxes
resulted primarily from non-recoverable deferred tax assets that were not
recognised and from tax effects related to a possible future tax liability
on the sale of the BUWOG investment.

Earnings per share

Diluted earnings per share from continuing operations equalled EUR 0.08 as
of 30 April 2014 (2012/13: EUR 0.01). Diluted earnings per share from
discontinued operations equalled EUR 0.10 as of 30 April 2014 (2012/13: EUR
0.10).

BALANCE SHEET

Investment property represented 75.7% of total assets as of 30 April 2014
and is reported on the balance sheet under the following positions:
investment property, property under construction, real estate inventories
and non-current assets held for sale. IMMOFINANZ Group recorded a
year-on-year decline of EUR 3.2 billion in investment property to EUR 7.2
billion in 2013/14, chiefly due to the BUWOG spin-off and the sale of
properties as part of the five-year sales programme.

Investments in associated companies rose from EUR 72.3 million to EUR 827.1
million. This increase resulted from the partial spin-off of BUWOG together
with the subsequent accounting for the remaining stake held by IMMOFINANZ
Group as a financial investment and from an increase in the carrying amount
of the Hungarian Trigranit investment. This represents 8.6% of the
company's assets and explains the decline in investment property as a per
cent of total assets.

Other financial assets rose from EUR 213.9 million to EUR 417.3 million.
The increase reflected IMMOFINANZ's subscription of the BUWOG convertible
bond, a step that enabled BUWOG to purchase nearly 18,000 housing units in
Germany. This strong positioning on the German market was an important
prerequisite for the independence and spin-off of BUWOG. The EUR 260.0
million convertible bond was issued at the end of April 2014, with
IMMOFINANZ as the sole subscriber.

Cash and cash equivalents fell from EUR 738.5 million to EUR 244.9 million
and represent 2.6% of total assets. This decline resulted mainly from the
decrease in cash and cash equivalents following the BUWOG spin-off, the
financing of residential property acquisitions by BUWOG in Germany, the
repayment of the syndicated loan and the payment of the outstanding
purchase price for the remaining 50% stake in Rostokino.

Assets totalled EUR 9.57 billion as of 30 April 2014. The non-current
component equalled EUR 8.42 billion and the current component EUR 1.14
billion.

IMMOFINANZ Group had equity of EUR 4.3 billion as of 30 April 2014
(2012/13: EUR 5.3 billion), whereby the year-on-year decline was related
chiefly to the BUWOG spin-off. The equity ratio equalled 44.5% as of 30
April 2014 and was slightly higher than the prior year despite the decline
in equity (2012/13: 42.3%).

Financial liabilities, including liabilities from convertible bonds, fell
by EUR 1.2 billion year-on-year due to the BUWOG spin-off and totalled EUR
4.2 billion as of 30 April 2014.

Trade and other payables fell from EUR 854.0 million to EUR 377.0 million -
also as a consequence of the BUWOG spin-off.

Liabilities totalled EUR 5.3 billion as of 30 April 2014. The non-current
component equalled EUR 3.6 billion and the current component EUR 1.7
billion.

The individual positions as a per cent of total capital show the very
limited influence of the BUWOG spin-off on the balance sheet structure.

CASH FLOW STATEMENT

All cash flow figures include cash flow from discontinued operations.

Gross cash flow fell by 18.3% from EUR 408.5 million to EUR 333.6 million
and cash flow from operating activities declined by 27.4% to EUR 287.8
million (2012/13: EUR 396.3 million). Property sales and the resulting
lower operating income, negative one-off tax payments and costs for the
BUWOG spin-off were the main reasons for this shift. As explained above in
the analysis of the results of asset management, delays in the completion
of development projects (above all, the GOODZONE shopping center) prevented
the full offset of this decline.

Cash flow from investing activities amounted to EUR 105.2 million for the
reporting year (2012/13: EUR -26.3 million). Cash flow from financing
activities consisted primarily of additions to and reductions in financial
liabilities, bonds and convertible bonds as well as the dividend payment.
This position totalled EUR -911.0 million for the reporting year (2012/13:
EUR -201.1 million) due to the repayment of the syndicated loan and other
loan repayments related to property sales.

Cash and cash equivalents fell from EUR 738.5 million to EUR 244.9 million.
The main factors for this decline were the decrease in cash and cash
equivalents following the BUWOG spin-off, the financing of residential
property acquisitions by BUWOG in Germany, the repayment of the syndicated
loan and the payment of the outstanding purchase price for the remaining
50% stake in Rostokino.

KEY DATA

Earnings data

The year-on-year decline in the operating indicators was related to
property sales and the delayed completion of development projects. For
example: rental income and results of operations were 7.2% and 19.5%,
respectively, lower than the previous year. Cash flow was also negatively
influenced by these developments. In contrast, EBIT rose by 54.0% and net
profit by 62.8%. Additional details are provided in the analysis of the
income statement and cash flow statement.

Asset data

IMMOFINANZ's balance sheet total declined by 23.9% as a result of the BUWOG
spin-off. The reporting year brought an improvement in the equity ratio
from 42.3% to 44.5%. The net loan to value and gearing indicators rose to
52.8% and 87.9%, respectively (2012/13: 47.1% and 87.8%) due to the
comparatively low debt in the spun-off BUWOG properties.

Property data

The 2013/14 financial year was shaped by the BUWOG spin-off, as is
illustrated by the development of the property indicators. The number of
properties fell by 70.4% to 521 and rentable space dropped 41.4% to
3,825,325 sqm. The occupancy rate declined from 89.5% to 85.0%. The lower
occupancy rate is explained by the spun-off residential properties in the
BUWOG portfolio - the occupancy in these properties is very high and
represents a typical feature of this asset class.

Stock exchange data

The book value per share equalled EUR 4.18 (2012/13: EUR 5.23). Net asset
value amounted to EUR 4.57 as of 30 April 2014 (2012/13: EUR 5.79) and
triple net asset value to EUR 4.34 (2012/13: EUR 5.38) - these indicators
were also influenced by the BUWOG spin-off. The unadjusted share price
declined 13.9% to EUR 2.67. After an adjustment for the effects of the
BUWOG spin-off, the share performance was positive with an increase of 7.1%
from EUR 2.50 to EUR 2.67.


The annual report of IMMOFINANZ AG for 2013/14 can be reviewed on the
company's website under
http://www.immofinanz.com/en/investor-relations/financial-reports/ starting
on 19 August 2014.


On IMMOFINANZ Group
IMMOFINANZ Group is one of the leading listed property companies in Europe.
The company is included in the leading ATX index of the Vienna Stock
Exchange and also trades on the Warsaw Stock Exchange. Since its founding
in 1990, the company has compiled a high-quality property portfolio that
now comprises more than 520 investment properties with a carrying amount of
approx. EUR 7.2 billion. As a "real estate machine" the company
concentrates on linking its three core business areas: the development of
sustainable, specially designed prime properties in premium locations, the
professional management of these properties and cycle-optimised sales.
IMMOFINANZ Group concentrates its activities in the retail, office and
logistics segments of eight regional core markets: Austria, Germany, Czech
Republic, Slovakia, Hungary, Romania, Poland and Russia.
Further information under: http://www.immofinanz.com |
http://blog.immofinanz.com | http://properties.immofinanz.com


For additional information please contact:

MEDIA INQUIRIES
Bettina Schragl
Head of Corporate Communications | Press Spokesperson
IMMOFINANZ Group
T [phone]
M [phone]
[e-mail]

INVESTOR RELATIONS
Stefan Schönauer
Head of Corporate Finance & Investor Relations
IMMOFINANZ Group
T [phone]
M [phone]
[e-mail]



---------------------------------------------------------------------

01.08.2014 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

---------------------------------------------------------------------


Language: English
Company: IMMOFINANZ AG
Wienerbergstraße 11
1100 Wien
Austria
Phone: [phone] - 2291
Fax: [phone] - 8291
E-mail: [e-mail]
Internet: http://www.immofinanz.com
ISIN: AT0000809058
WKN: 911064
Listed: Freiverkehr in Berlin, München, Stuttgart; Frankfurt in
Open Market ; Wien (Amtlicher Handel / Official Market)


End of News DGAP News-Service
---------------------------------------------------------------------
280498 01.08.2014