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Original-Research: S Immo - from NuWays AG
Classification of NuWays AG to S Immo
Company Name: S Immo
ISIN: AT0000652250
Reason for the research: Update
Recommendation: Kaufen
from: 27.03.2024
Target price: EUR 19.00
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Philipp Sennewald
FY '23 showing strong rental growth - Strategy update // chg.
S IMMO released FY '23 figures, showing strong operational results as well
as a lower-than-expected devaluation of the real estate portfolio.
FY rental income came in at EUR 203m (eNuW: EUR 193m; eCons: EUR 191m), up 30%
yoy thanks to acquisitions to the tune of EUR 1bn, mainly in Austria and the
Czech Republic as well as an improved l-f-l rental level of the portfolio.
Importantly, revenues from hotel operations increased by 24% yoy to EUR 70m
(eNuW: EUR 65m; eCons: EUR 64m), thus significantly exceeding pre-pandemic
levels (2019: EUR 59m). Overall revenues (incl. service charges) increased by
29% yoy to EUR 336m (eNuW: EUR 321m; eCons: EUR 323m).
Against this backdrop, FFO grew by 52% yoy to EUR 99.7m (eNuW: EUR 101m, eCons:
EUR 84m), mainly driven by the improved top-line as well as operating
leverage on the G&A level. Yet, despite the strong operations, the result
from property valuations again came in negative at EUR -109m, which was
however below market expectations (eNuW: EUR -148m, eCons: EUR -134m).
Moreover, when taking a closer look at the regional split, one can see that
especially the German portfolio saw a strong devaluation (EUR -118m) while
the CEE portfolio even gained value (EUR 37m), although part of this was due
to purchase price adjustments. Nonetheless, this once more supports
management's decision to shift the strategic focus towards the higher
yielding Eastern European office market.
In fact, S IMMO recently published a strategy update, stating that the
whole German portfolio is now included in the disposal program, which
initially only included the German residential portfolio. On top of this,
the company aims to gradually streamline the portfolio, focusing on the
divestment of small and medium-sized office properties with limited
development potential, possibly leading to a market exit in Croatia (EUR 75m
BV) and Slovakia (EUR 150m BV). While management did not put a number on the
disposal programs, we estimate it to comprise properties worth c. EUR 750m
(incl. Zagrebtower), which are set to be disposed within the next three
years (eNuW). The freed funds are seen to be merely invested into office
and retail properties in Austria and the Czech Republic. Here the company,
recently signed an LOI acquire an office and retail portfolio in the Czech
Republic from parent company CPI (EUR 495m BV).
Based on continued strong operations and metrics as well as the possibility
of a delisting offer looming, S IMMO remains a BUY with a new PT of EUR 19.00
(old: EUR 18.40) based on NTA and DDM.
You can download the research here:
http://www.more-ir.de/d/29267.pdf
For additional information visit our website
www.nuways-ag.com/research.
Contact for questions
Die Analyse oder weiterführende Informationen zu dieser können Sie hier downloaden: www.nuways-ag.com/research.
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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The issuer is solely responsible for the content of this research.
The result of this research does not constitute investment advice
or an invitation to conclude certain stock exchange transactions.
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