conwert Immobilien Invest SE

conwert achieves success in operating business and increases FFO I in first quarter 2016 - Seite 2

FFO I (funds from operations before sales and one-off effects) - a key performance indicator for conwert - increased significantly in line with the operating improvements by 42.6% to EUR 18.2 mn in the first quarter of 2016 (1-3/2015: EUR 12.7 mn). FFO II (FFO I plus sales income) stood at EUR 19.4 mn, following on from EUR 14.5 mn in the comparable period of the previous year.

The financial result improved by 4.2% to EUR (24.7) mn, even though it was severely influenced by non-cash effects from derivatives of EUR 15.5 mn. In 2015 conwert sharply reduced its derivative volumes; however, owing to the ongoing sharp declines in interest rates, there was a decrease of EUR 9.1 mn in the ineffective market value of derivatives in the first quarter of 2016. A further EUR 6.4 mn derived from the ongoing close-out of the cash flow hedge reserve related to derivatives that have already been terminated and/or restructured.

The adjustment to derivative volumes and the renegotiation of mortgage loans led to a sharp fall in cash effective financing costs to EUR (7.9) mn (1-3/2015: EUR (16.1) mn), while the cash effective interest rate after hedging fell to 2.2% (1-3/2015: 3.9%).

The lower sales proceeds, the reduction in rental income as a result of sales, and the one-off effects in the eventful first quarter of 2016 resulted in a yoy decline in conwert's EBIT to EUR 25.1 mn (1-3/2015: EUR 32.5 mn). Impacted by non-cash effects on net finance costs in the first quarter of 2016, EBT stood at EUR 0.4 mn (1-3/2015: EUR 6.7 mn). Group earnings after tax totalled EUR (4.0) mn (1-3/2015: EUR 2.5 mn).

The loan to value (LTV) - debt in relation to property assets including cash and cash equivalents - underwent a further reduction and stood at just 47.2% at 31 March 2016 (at 31.12.2015 the LTV still stood at 49.2% taking the conversion of the 5.25% convertible bonds into account which expired in January 2016 and were almost fully converted). The equity ratio was up slightly to 45.7% at 31 March 2016 (31.12.2015: 43.8%).

The consistent efforts to optimise the management of the portfolio, increase rental income and sell off non-core properties will continue in 2016.

For the full year 2016 conwert expects an increase in FFO I (before sales income and one-off effects) to EUR 70 mn, partly as the result of operating improvements. In 2015 the FFO I stood at EUR 53.4 mn. The restructuring that began in 2015 will be completed in 2016 and will subsequently contribute to reducing material and personnel costs.