conwert Immobilien Invest SE: conwert with operating success and positive results in Q1 2015

Vienna (pta027/26.05.2015/22:07 UTC+2) -
+ Strong operating performance - FFO I up to EUR12.7 mn and NRI margin rises to 68.9%
+ Consolidated earnings back in the black after being hampered by negative non-cash effects in the previous year
+ Proactive management leads to increase in average rents and fall in vacancy rates
+ FFO I guidance for 2015 at EUR40 mn- business outlook confirmed

conwert Immobilien Invest SE, traded on the Austrian ATX, achieved positive earnings in the first quarter 2015 thanks to a strong operating performance and an improvement in net finance costs.

conwert's revenues rose from EUR78.9 mn in the first quarter 2014 to EUR106.9 mn in the first quarter 2015, an increase of 35.5%. This growth was primarily generated by sales income of EUR50.1 mn, which was more than twice as high as the comparable period (1-3/2014: EUR17.7 mn); EUR42.9 mn of which came from the sale of commercial units. The IFRS margin on portfolio sales was 5.4%, while the IFRS profit was EUR2.6 mn compared to EUR3.6 mn in the first quarter last year.

Rental income slipped back slightly by 6.7% in the first quarter 2015 against the comparable period to EUR55.2 mn, although the decline was mainly due to a reduction in running costs charged to tenants of EUR2.8 mn. However, net rental income (NRI) actually increased from EUR37.3 mn to EUR38.0 mn and the NRI margin rose to 68.9% in the first quarter 2015 (1-3/2014: 63.1%). The adjusted NRI margin which allows comparisons with German peers - rental income less running costs charged to tenants - increased by 4.8% and stood at 87.7% (1-3/2014: 83.7%).

The average rents per square metre and the vacancy rates underwent a positive change. The average rents for the whole portfolio saw a year-on-year rise of 2.3% from EUR6.16/sqm/m to EUR6.30/sqm/m. Average monthly rents in the residential sector increased from EUR5.84/sqm/m to EUR6.01/sqm/m (+2.9%) in Austria and from EUR5.39/sqm/m to EUR5.55/sqm/m (+3.0%) in Germany. It was possible to achieve a fall in average vacancy rates across the entire portfolio from 10.0% in the comparable quarter of the previous year to 9.4% on the reporting date. This represents a reduction of 6.0%, which is due to the sale of property with higher vacancy rates as well as the proactive management of the portfolio properties.

Revenues from property services declined as expected given the selective approach to the service business and amounted to EUR1.6 mn in the reporting period (1-3/2014: EUR2.0 mn). Personnel expenses also saw a further fall from EUR6.9 mn to EUR5.9 mn as a result of streamlined operating processes.

In line with the operating improvements, funds from operations before sales and one-off items (FFO I) rose sharply by 52.4% to EUR12.7 mn in the first quarter 2015 (1-3/2014: EUR8.4 mn). FFO II (FFO I plus sales income) stood at EUR14.5 mn, following on from EUR10.7 mn in the comparable period.

Net finance costs also underwent a marked improvement to EUR(25.8) mn against the first quarter of the previous year, in which net financial expenses stood at EUR(36.8) mn, still EUR11.1 mn higher, and were hampered by ineffective swaps. The average interest charges on financial liabilities were 3.94%, marking a further reduction since year-end 2014 (31/12/2014: 4.03%).

In the reporting period conwert's EBIT was up by 11.7% against the comparable period of the previous year to EUR32.5 mn (1-3/2014: EUR29.1 mn). EBT was clearly in the black and amounted to EUR6.7 mn after EUR(7.7) mn in the first quarter 2014.

The consolidated post-tax profit was EUR2.5 mn in the first quarter 2015 following on from a loss of EUR(5.9) mn in the first quarter of the previous year.

The loan to value (LTV) - debt in relation to property projects minus cash and cash equivalents - saw a further decline and stood at 52.4% at the reporting date (31/12/2014: 53.6%). The equity ratio increased slightly to 37.7% (31/12/2014: 37.1%).

Thomas Doll, conwert CFO, on the performance: "In the first quarter 2015 conwert has made further improvements to its ongoing operating performance and achieved a positive result below the line. This is also reflected in the renewed decrease in the vacancy rate compared to the first quarter 2014 and the rise in average rents. Sustainable optimisation of the financing and a focus on residential property on conwert's core markets are the key points for 2015."

conwert expects the macroeconomic developments on its core markets of Austria and Germany to be broadly positive. The Group's most important strategic goals for 2015 include a significant reduction in financing costs, a further fall in vacancy rates and a concentration on the core business by selling off commercial property and real estate in the other countries segment. In particular this should strengthen FFO I, a key indicator of operating performance. For the full year 2015, conwert is aiming for an increase in FFO I to EUR40 mn (before sales income and one-off items) and assumes a rise in net rental income (NRI) to around EUR155 mn.

The interim report on the first quarter 2015 of conwert Immobilien Invest SE is available on the website http://www.conwert.com.

Key performance indicators		1-3/2015	1-3/2014	Change	2014
Rental income	EUR mn	55.2	59.2	-6.7%	237,3
Proceeds from sale of properties	EUR mn	50.1	17.7	182.8%	133,5
Revenues from property	EUR mn	1.6	2.0	-19.3%	10,5
Total revenue	EUR mn	106.9	78.9	35.5%	381,2
EBITDA	EUR mn	29.9	29.4	1.7%	109,9
EBIT	EUR mn	32.5	29.1	11.7%	121,6
EBT	EUR mn	6.7	(7.7)	-	(9,9)
Funds from operations before sales income (FFO I) *)	EUR mn	12.7	8.4	52.4%	34,8
Funds from operations including sales income (FFO II) **)	EUR mn	14.5	10.7	35.3%	39,0
Net rental income (NRI)	EUR mn	38.0	37.3	1.8%	150,7
NRI margin	%	68.9	63.1	9.2%	63,5
Adjusted NRI margin ***)	%	87.7	83.7	4.8%	85,0
Basic earnings per share	EUR	0.02	(0.09)	%	(0,14)
Diluted earnings per share	EUR	0.02	(0.09)	%	(0,14)
FFO I *) per share	EUR	0.15	0.10	50.0%	0,42

*) FFO I: Earnings before tax (EBT) - difference between sales and carrying amount of sold properties + operating expenses of sales income -/+ revaluation gains/losses + depreciation and value adjustments + non-cash components of financial income and other non-cash costs not including non-controlling interests + restructuring costs/one-off costs
**) FFO II: FFO I + difference between sales and carrying amount of properties sold - operating expenses of sales income
***) Adjusted NRI margin: Margin on net rental income (rental income less running costs charged to tenants)

Balance sheet indicators		31/03/2015	31/12/2014	Change
Total assets	EUR mn	2.931.5	2.974.0	-1.4%
Non-current loans and borrowings	EUR mn	1.001.6	1.120.4	-10.6%
Current loans and borrowings	EUR mn	290.7	221.3	31.3%
Equity	EUR mn	1.106.1	1.104.6	0.1%
Equity ratio	%	37.7	37.1	1.6%
Gearing	%	140.9	143.8	2.0%
Basic EPRA NAV per share	EUR	15.79	15.70	0.6%

Property portfolio		31/03/2015	31/03/2014	Change	31/12/2014
Rental units	No.	30,180	31,756	6.9%	30,385
Parking spaces	No.	12,739	14,050	10.0%	13,573
Total usable space	sqm	2,409,272	2,577,628	7.4%	2,473,195
Property assets	EUR mn	2,776.9	2,884.7	4.6%	2,810.5
Vacancy rate	%	9.4	10.0	7.0%	9.0
ø Rent	EUR/sqm/m	6.30	6.16	2.3%	6.27

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This report contains forward-looking estimates and statements that were made on the basis of the information available at this time. Forward-looking statements reflect the point of view at the time they are made. We would like to point out that the actual circumstances and. consequently, the actual results realised at a later date may differ from the forecasts presented in this report for a variety of reasons.

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