S IMMO AG

S IMMO AG: Strong start to 2018 - Seite 2

Other financial assets - mainly the equity investments in Immofinanz AG and CA Immobilien Anlagen AG - came to EUR 453.1m as of 31 March 2018 (31 December 2017: EUR 300.2m). This is significantly higher than S IMMO's acquisition costs. Until May 2018, dividend payments totalling roughly EUR 19.4m were received through these investments.

Positive effects in the financial result
As expected, EBITDA fell from EUR 19.5m in the first quarter of 2017 to EUR 17.3m in the first quarter of 2018. Due to the effects described above, EBIT declined from EUR 27.2m in the first quarter of 2017 to EUR 24.9m in the first quarter of 2018.

The financial result improved considerably year-on-year, improving from EUR -9.3m to EUR -6.7m thanks to positive derivatives valuations, the elimination of the participating certificate expenses and the lower cost of funding. The cost of funding (financing costs including bonds and derivatives) was reduced from 3.08% as of 31 March 2017 to 2.56%.

Improvement of EBT and earnings per share
EBT rose to EUR 18.1m (Q1 2017: EUR 17.9m). Due to higher tax expenses net profit for the period came to EUR 14.7m (Q1 2017: EUR 16.2m). Earings per share attributable to shareholders in the parent company increased to EUR 0.22 (Q1 2017: EUR 0.21). The book value per share came to EUR 14.37 as of 31 March 2018 (31 December 2017: EUR 14.21), EPRA NAV improved to EUR 17.79 as of 31 March 2018 (31 December 2017: EUR 17.63).

Capital market
Much like the major international stock markets, the S IMMO share moved sideways in the first quarter and was listed at EUR 16.10 as of 31 March 2018. A positive note is the fact that the share's liquidity increased: In April 2018, there have once again been some changes in the company's shareholder structure. Management sees this as a confirmation of the attractiveness of an investment in S IMMO.

Outlook for 2018
Taking advantage of property cycles is an essential part of the company's strategy. S IMMO AG is currently continuing to benefit from the positive economic developments in its markets as well as the low-interest environment and the high price levels in many real estate markets.

As Friedrich Wachernig, member of S IMMO AG's Management Board, explained, "We currently see an attractive price level primarily in up-and-coming German cities such as Leipzig, Kiel and Rostock. These cities have a good demographic profile and economic growth potential as a result of the population influx. The purchase of properties with stable yields and a lower rent level ensures sustainable cash flows while also creating upside potential. This is how we plan to secure earnings for the future."