Immofinanz back in the black after turnaround

Austrian real estate developer Immofinanz swung back to profit in the financial year ending April 30, from a loss of EUR 3.4 bn the previous year following writedowns on assets and development projects. Full-year pretax profit totalled EUR 208 mln, dented by a writedown in the fourth quarter to April which resulted in a pretax loss of EUR 57.5 mln.

In a statement on Tuesday to announce its full-year preliminary results, Immofinanz said that the past 12 months were 'characterised by an extensive restructuring process', which saw the company merge with its Central and Eastern European arm, Immoeast. 'The Immofinanz Group followed an extremely negative crisis year in 2008/09 with a successful turnaround and generated solid positive earnings in 2009/10,' the company said.

'The restructuring has been largely concluded, and plans for 2010/11 consequently call for a focus on the optimisation of the property portfolio, the completion and selective reactivation of development projects, and the sale of assets that are not part of the core business of the group.'

In future, the company will focus on the core markets of Austria, Germany, Poland, Romania, Russia, Slovakia, Czech Republic and Hungary, it added.

Revenues fell slightly from EUR 736 mln in 2009 to EUR 719 mln in 2010, mostly due to a year-on-year decline in rental income, which resulted above all from the sale of properties. However, a significant reduction (-52%) in overhead supported an improvement in earnings before interest, tax, depreciation and amortisation (EBIT), which rose from EUR 310 mln in 2009 to EUR 394 mln in 2010.

The Vienna-based firm said that its capital structure and liquidity remains stable, and it is currently evaluating refinancing options due to the maturity of EUR 867 mln in convertible bonds during 2012. 'This refinancing, which is one of the prerequisites for the planned payment of a dividend for the 2011/12 financial year, should be realised within the next three quarters,' it added.