Retail boosts rental income at Immofinanz

Vienna-listed Immofinanz group reported rental income rose 8.5% in the third quarter of the financial year ended 31 January 2012 to EUR 153.6 mln thanks to strong growth in the retail segment. However, net profit fell more than 90% quarter-on-quarter to EUR 4.3 mln due to negative, non-cash effects from foreign currency translation and the valuation of derivatives. Stripping out the foreign exchange effects, net profit for the period totalled EUR 54 mln.

For the first three quarters, rental income edged up 3.4% to EUR 437.3 mln, boosted by a 15% increase over the first six months of the previous year thanks to strong sales at the company's Russian shopping centres during the Christmas season. The opening of the Maritimo Shopping Center in Constanta, Romania and the expansion of the company's Silesia City Center in Katowice, Poland in October last year also bolstered income over the period. The strong growth of these activities helped offset negative effects arising from cost increases and revaluation results at the GoodZone mall project in Russia.

Rental income in the residential sector rose by 4.2% over the year-earlier period, but declined in the office (-8.2%) and logistics (-2.2%) segments. The fall in the office segment resulted from the sale of five properties in Austria and one in Germany.

After the inclusion of positive valuation results (including foreign exchange effects) totalling EUR 352.9 mln, Immofinanz saw EBIT (earnings before interest and tax) double to EUR690.9 mln in the first three quarters of 2011/12 from EUR 343.3 mln the previous year.

Commenting on the results, CEO Eduard Zehetner said the company had exceeded its operating targets during the past quarter: income was higher in all segments and administrative costs were again reduced. ‘We are working hard to transform Immofinanz Group from a real estate manager into a real estate machine’, he said. He added that the company’s growth course would be accelerated by the continuous optimisation of the standing investment portfolio, a reduction in operating costs and a stronger focus on cash flow generation.

Last Friday, the Austrian real estate group said it had agreed to buy the remaining 50% of the Golden Babylon Rostokino shopping centre it does not own in Moscow from Russian company Patero. Immofinanz said the parties had agreed not to disclose any financial details on the deal but that the deal was expected to close in mid-May.