Conwert With A Clear Turn-Around In Bottom Line And A Higher FFO I Guidance (Buy And Euro 14.00 Affirmed)

(PresseBox) ( Frankfurt, )
SRC Research the bank-independent analysts house for Financials and Real Estate stocks today presents a rating update about Vienna-based residential property player conwert Immobilien. The company has an approx. Euro 2.8bn portfolio. The major part of the portfolio is residential, about 75%.

Yesterday evening, the Austrian Blue Chip residential property player released its report for the first half of the year. Rental income fell by 6.4% to Euro 113.5m, which was a result of property sales in the course of the portfolio streamlining as the company is geared to focus on residential property only, in particular in metropolitan regions in Germany and Austria. However, sales revenues almost tripled to Euro 92.5m, compared to the level of the previous year (Euro 36.3m), whereat about Euro 55m of the trading volume came from sold commercial properties. Therefore, total revenues surged from Euro 162m to almost Euro 210m. Management confirmed again its target to sell commercial properties in a range between Euro 150 and Euro 200m for the full year 2015.

Due to further cost cutting measures, which were implemented in March 2015, personnel expenses fell by more than 9% to Euro 12.5m and operational expenses decreased by 18% to Euro 15m. These measurements generated a significant increase in operational efficiency, which is also reflected by the NRI margin, that increased sharply to almost 66%, after 61% in the comparable period 2014.

The vacancy rate stood at 8.9% for the first six months of the year. The target of the management is the reduce that rate below 8% in 2015. The financial result improved significantly in the reporting period to Euro -32m, after Euro -73m in the first six months of 2014. As a consequence of the top line growth, lower operating expenses and an improved finance result, the operating profit (EBIT) surged by 31% to Euro 62m. After generating a slight net profit in the first quarter 2015, the management realized a strong hike in the net profit after minorities to Euro 23m, after a net loss of Euro 25m in 1H 2014.

As we expect steady improvements for the next quarters, we keep our Buy recommendation and also stick to our Euro 14.00 target price. We feel confirmed by the management, which decided to lift the FFO I guidance for 2015 by 20% to Euro 48m after the good first six months. For any queries regarding our conwert update please do not hesitate to contact us.

Conwert will join our 2015 investor event Forum Financials & Real Estate on 10 September at the Frankfurt Hilton. You will find more information and the opportunity for a cost-free registration on www.src-research.de/forum
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