CA Immo to continue sell-offs in 2014 with land and logistics

by

Not surprisingly, given its recent track record of almost unremitting sales and disposals to pay down what was beginning to look like a crushing debt burden, Austrian listed real estate company CA Immo saw the first quarter’s net profit tumbling by 22% year-on-year to €13.9m, although its EBIT remained stable at €38.3m. Revenue from rental income fell 21.4% to €33.2m after property sales of €1.3bn.

The sell-offs are expected to continue through out 2014, with the sale of its €266m logistics portfolio seen as the next priority, which should free up equity for share buybacks and to boost the dividend. Also on the block will be zoned German building land, of which the group owns €345m worth, 57% for office projects and 43% for residential. Last year major disposals included the sale of the Leo Hessen Portfolio and two-thirds of the group’s share in Frankfurt’s Tower 185 prime office building.

CA Immo did manage to book a rise of 7% in first quarter FFO (a key indicator to the group’s profitabilitiy in its rental business) to €16m despite all the sales and resulting reduced rental income. CEO Bruno Ettenauer said he was still confident of full-year FFO of at least €55m. “Having successfully consolidated the balance sheet last year, our efforts in 2014 will be focused on raising long term profitability still further. The sustained recurring results of the first quarter, while the balance sheet has strengthened substantially and risk to the company has fallen considerably, underlines the effectiveness of the measures implemented last year as part of our strategic program for 2012-2015.”

CA Immo improved its overall equity ratio since 31st December from 44% to 47%, while total net debt stands at €1.1bn after the recent sales. Diluted net asset value per share at end-March was €20.26, while the share is currently trading at about €13.50.