Sparkassen Immobilien : S IMMO AG: results for the first half year right on target

• up by 9% 
• higher again 
• Successful exchange of for corporate bonds

Halfway through 2014, stock exchange listed S IMMO AG (Bloomberg: SPI:AV, Reuters: SIAG.VI) can look back on two very successful quarters. Ernst Vejdovszky, Chairman of S IMMO AG's Management Board, comments: "The results for the first half make us feel very optimistic about the rest of the year. We have been successful in improving our key indicators, and we are happy to reaffirm our goal of doing even better in 2014 than the excellent results we achieved in 2013."

Friedrich Wachernig adds: "Even from those of our markets that have been more than challenging in the past, the news we are now hearing is increasingly positive - they have left their troughs behind them. Exchanging our in the capital markets has also sent a strong signal, and encourages us to view the future with confidence."

Gross profit
S IMMO AG's total income for the first half of 2014 came to EUR 93.2m, compared with EUR 97.0m in the same period last year. The rental income of EUR 56.8m was lower than the EUR 59.0m achieved a year earlier, as an expected result of the property disposals. Revenues for the half year from hotel operations (revenues from the Vienna and Budapest Marriott Hotels, both operated under management agreements) were EUR 19.1m, after EUR 19.2m in the first half of 2013. The gross profit from hotel operations improved from EUR 3.9m to EUR 4.5m.

Property management expenses in the first half of 2014 of EUR 26.2m were reduced by 12.8% compared with the same period last year. Improvements in the cost structure together with a higher gross profit from hotel operations substantially made up for the reduction in rental income as a result of property sales. Despite lower other operating income (EUR 2.3m), the overall gross profit of EUR 54.6m held up more or less at last year's level (HY 2013: EUR 55.1m). This was attributable to the excellent operating performance.

Successful property sales
For the financial year 2014 S IMMO is planning on property disposals of up to 5% of the portfolio. In the first half of the year four properties were sold for a total of EUR 39.6m, compared with EUR 83.8m in the first six months of 2013. There were no gains to be recognised on these sales in the income statement for the first half of 2014, because the properties in question had already been revalued in 2013 to reflect the final selling prices.

and
came to EUR 47.0m, compared with EUR 49.9m in the same period last year. At 30 June 2014, properties with a total of EUR 8.8m were classified as held for sale and the value was increased correspondingly. Total property revaluations amounted to EUR 8.9m (HY 2013: EUR 2.8m). for the period was also significantly higher than last year: at EUR 52.2m, it was up EUR 4.2m - nearly 9% - on the EUR 48.0m reported for the first half of 2013.

Net profit for period higher again
The financial results for the first half of 2014 including the participating certificate results amounted to EUR -31.6m, as against EUR -30.4m for the first half of 2013. In spite of negative foreign currency effects, this was essentially at the same level as last year. came out at EUR 20.6m, an increase of 17% on the result for the same period last year. The consolidated net profit was once again higher at EUR 16.4m (HY 2013: EUR 16.0m).

Key indicators at very satisfactory levels
The lower rental income resulting from property sales had only minor effects on not including the effects of property sales ( I), because operating performance was very good, and the negative effects of lower rents and other operating income were largely balanced out by cost savings. I for the first half of 2014 came to EUR 15.2m, compared with EUR 16.0m in the same period last year. II, which includes gains on property sales in the year to date and valuation gains on properties still forming part of the portfolio, was EUR 29.1m, markedly better than the EUR 23.0m achieved in the first half of 2013.

The cost savings discussed above also resulted in a further improvement in for the period, which totalled EUR 52.4m, compared with EUR 51.6m for the first six months last year. The margin also improved by 3.0 percentage points despite the reduced property portfolio.

In the first half of 2014 both book value (balance sheet ) and per share rose: the book value at 30 June 2014 stood at EUR 7.87 (31 December 2013: EUR 7.83) per share, while was EUR 9.80 (31 December 2013: EUR 9.76) per share.

Capital markets
During the most recent quarter, the exchange offer to the holders of was a further important and successful step towards simplifying S IMMO AG's capital structure. The policy now consistently pursued is also having an effect: S IMMO share put on more than 12% in the first half year.

Ernst Vejdovszky explains: "We are registering increasing investor interest - also on the part of international investors - and are very pleased with the improvement. We still see significant upside potential for our share, and will continue to work hard to bring the stock market price closer to the share's ."

Outlook
As in earlier years, the Management continues to vet promising property purchases and examine sales opportunities. Sales during the year of roughly 5% of the property portfolio are planned, concentrating on Austria and Germany. S IMMO AG still sees attractive investment opportunities in Berlin, and predominantly in residential property. The lively demand for apartments means that S IMMO's focus is on development of freehold apartment blocks on land already owned by the Group. The start of some projects is scheduled for this year.

* Adjusted