IMMOFINANZ AG: Increase in earnings during the third quarter of 2010/11 (AT)

The IMMOFINANZ Group confirmed the successful turnaround and the upward trend of the first and second quarters with an increase in earnings during the third quarter of 2010/11. The continuous optimization of the portfolio and costs as well as an increased focus on cash flow generation should support a further improvement in operating results during the coming quarters.

Income from asset management
Rental income amounted to €423.1 million for the first three quarters of 2010/11, for a plus of 5.6% over the comparable prior year period (€400.8 million). This growth was supported above all by the third quarter, which brought a substantial increase of 6.8% or €9.3 million in rental income. In comparison with the second quarter of 2010/11, the increase amounted to 5.5% or €7.6 million.

Rental income increased year-on-year in the retail (+24.0%), residential (+2.7%) and logistics (+8.6%) segments, but declined in the office segment (-9.4%). This decrease resulted from the sale of properties and the start of construction on the previously rented Gerling Quarter in Cologne.

Revenues rose by 4.1% from €536.8 million to €558.6 million for the first three quarters of 2010/11. The increase of €38.9 million or 55.3% in real estate expenses reflected higher maintenance and renovation activities that are intended to improve the marketability of properties, above all in Austria. Income from asset management therefore fell slightly to €333.5 million (2009/10: €347.4 million).

Income from property sales
The sale of properties generated income of €19.4 million in the first nine months of 2010/11 (prior year: €35.4 million). These transactions focused primarily on residential properties in Austria.

Income from property development
The sale of inventories generated proceeds of €56.0 million and income of €10.6 million during the reporting period. Proceeds from the sale of apartments more than tripled over the prior year level (€16.0 million). The proceeds from the sale of these inventories were recorded above all in Austria (€45.4 million) and Poland (€6.4 million).

Other operating income
Approximately one-half of the other operating income of €36.7 million recorded in the third quarter is attributable to the waiver of a receivable by a financial institution. This receivable was related to a property that was taken over in connection with the agreements with Constantia Packaging B.V.

EBITDA, EBIT, EBT, net profit for the period and cash flow
Results of operations (EBITDA) clearly exceeded the comparable prior year level at €111.2 million for the third quarter of 2010/11. However, EBITDA was still slightly lower in year-on-year comparison with a 4.4% decline from €306.1 million to €292.6 million. This decline resulted primarily from the increase in real estate expenses.

Positive valuation results of €50.7 million (2009/10: €-59.4 million) led to a 39.2% improvement in EBIT, which rose from €246.7 million to €343.3 million. Financial results declined from €19.1 million to €-91.9 million, solely due to non-cash accounting effects from foreign exchange fluctuations (€-48.4 million versus €92.7 million in 2009/10) that were only offset in part by the positive valuation of financial instruments (€30.0 million versus €-46.9 million in 2009/10). Earnings before tax (EBT) were therefore – still – below the previous year, with a decline from €265.8 million to €251.4 million. Net profit for the period rose from €221.1 million to €229.3 million due to a lower tax rate.

Gross cash flow rose by 19.9% from €252.9 million to €303.2 million. Cash flow from operating activities increased to €333.1 million, which reflects an improvement of €62.7 million or 23.2% in comparison with the first three quarters of 2009/10 (€270.4 million). This development resulted chiefly from the reduction of receivables (€181.3 million).

Operating cash flow, which comprises cash flow from operating activities and cash flow from investing activities, more than tripled to €381.3 million for the first three qu

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