LUXEMBOURG (dpa-AFX) - The commercial real estate specialist Aroundtown expects a significant decline in operating profit this year, partly due to the sale of properties. The company is also struggling with higher interest rates on loans. Last year, the company even posted a loss of billions on the bottom line. Due to the difficult general economic situation, the management once again does not intend to pay a dividend.

Aroundtown shares performed a brilliant turnaround on Wednesday: On the way from the day's low to the day's high, they gained around 23 percent. At the end of the day, they were trading at around EUR 1.81, around six percent higher than the previous evening - making them the front-runner in the MDax, the index of medium-sized stocks.

In the current year, the key operating figure FFO1, which is important for the real estate sector, is likely to fall to between EUR 280 and 310 million, the MDax group announced on Wednesday. This operating result had already fallen by eight percent to EUR 332 million in 2023.

Aroundtown had already referred to the uncertain market development when it canceled the dividend the previous evening. As a result, future developments and their impact on the transaction markets and property valuation can only be predicted to a limited extent. This also applies to the company's debt ratio and financing costs. In the view of the Board of Directors, the company should therefore continue to focus on strengthening its liquidity and reducing its debt.

The entire real estate sector has recently been hit by high inflation and the rise in key interest rates. The long real estate boom in Germany came to an abrupt end. Aroundtown subsidiary Grand City Properties had already announced two weeks ago that it did not intend to pay a dividend for 2023.

Aroundtown - like many of its competitors - is also countering the difficult market by selling properties. The company reportedly sold properties for a total of 1.2 billion euros last year. It also bought back bonds, primarily with shorter maturities, at a discount for 1.3 billion euros. The Management Board therefore believes that the company is sufficiently financed for the time being: The liquid funds as well as the expected proceeds from the signed disposals cover the debt maturities until mid-2026, it added.

Due to the sales, net rental income fell by two percent to 1.19 billion euros last year. Aroundtown's bottom line slipped even deeper into the red. Due to the devaluation of the real estate portfolio, the net loss amounted to 2.4 billion euros after a minus of around 457 million a year earlier./mne/stw/jha/