Immofinanz expects earnings to double by 2013

Immofinanz Group is on track to lift earnings to around EUR 600 mln by the 2012/2013 fiscal year, CEO Eduard Zehetner told PropertyEU. The company reported this week that full-year net earnings soared 60% to EUR 315.5 mln in the year ended 30 April 2011.

For 2012/13 Zehetner is targeting a 10% profit contribution each from development projects and trading activities or a total of EUR 120 mln. The standing portfolio of assets under management should account for the remaining 80%, he said. The company came close to achieving its target in 2010/11, Zehetner added. Income from property sales soared 75% to EUR 53.8 mln while and property development also geneated a significant increase, rising from EUR -19.4 mln to EUR 44.6 mln.

Chief operating officer Manfred Wiltschnigg confirmed that the company's disposal programme so far had been 'very successful'. In total, the company generated EUR 195 mln from non-core assets in the year to 30 April, about EUR 50 mln above the fair value of the properties. 'We are pretty conservative in our books,' Wiltschnigg said. 'Overall, we realised prices that were 7% above the fair value.'

The company realised similar successes in its acquisition strategy, Wiltschnigg added. 'Overall the purchase price was 7% below fair value.'

Immofinanz has made a string of purchases in the past year, including minority stakes in the Goodzone retail project in Moscow and Adama, a residential developer in Romania. It also acquired the remaining shares it did not already own in a number of development schemes in Poland and Czech Republic. The company is striving to obtain majority stakes or full control of joint ventures and companies that it sees as its core business and dispose of minority stakes in non-core activities. At present the company has a minority stake of 25% in Trigranit, the Budapest-based developer, but there are no plans at present to boost this shareholding. 'For the time being, we're not in a position to increase our stake in this company,' Zehetner said.

Immofinanz is aiming to boost the level of its direct real estate holdings to 90% from 75% and is shedding properties outside its core countries - Austria, Germany, Poland, Czech Republic, Hungary, Romania, Russia and Slovakia.

Immofinanz Group has assets under management totalling some EUR 9 bn and claims to be one of the five largest listed property companies in Europe.