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Original-Research: Warimpex Finanz- und Beteiligungs AG - from East Value Research GmbH
Classification of East Value Research GmbH to Warimpex Finanz- und Beteiligungs AG
Company Name: Warimpex Finanz- und Beteiligungs AG
ISIN: AT0000827209
Reason for the research: Update
from: 07.05.2024
Target price: EUR 2.23
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Adrian Kowollik
While they were better than our estimates on the revenue and EBITDA level,
Warimpex' EBIT and net income disappointed due to an unexpected
remeasurement loss of EUR 38.3m (thereof: EUR 36.7m in Russia), which
resulted from higher interest rates and lower expected rent income. Both
factors currently affect the whole real estate sector. Positive was the
significant improvement of operating cash flow, which more than doubled to
EUR 24.8m, and the further reduction of net debt to EUR 212.6m (only 20% of
interest-bearing debt is on variable rates and only 12.4% is short-term).
Although the market environment for all real estate companies should slowly
improve as central banks start lowering their interest rates, the main risk
at WXF remains the high exposure to Russia (35% of Gross Asset Value, 62.1%
of total turnover). Given a lower peer-group-based FV (EUR 2.66 vs, EUR
3.23 before), we derive a new 12-months PT (50% NNNAV that we have
additionally discounted by 50% due to the exposure to Russia, 50% peer
group) for Warimpex of EUR 2.23 (previously: EUR 2.69). Due to the
currently difficult market environment we now only expect the opening of
new office buildings (Mogilska IV, Chopin, West Yard and MC55) in
2027E-2028E.
In 2023, Warimpex' results were affected on the one hand by higher
occupancy and average prices at its hotels, first-time full consolidation
of the fully occupied Avior (from January 2023) and c. 64% occupied
Mogilska 35 (from November) buildings, and on the other an unexpected,
significant remeasurement loss and weaker rouble. Total turnover equalled
EUR 49.7m (+10.1% y-o-y, our estimate: EUR 48.5m), of which 62.1% (2022:
62.9%) stemmed from Russia. While EBITDA (EUR 21.6m, +31% y-o-y, our
estimate: EUR 21.6m) was in-line with our estimate, EBIT (EUR -16.8m, 2022:
EUR 59.2m, our estimate; EUR 18.8m) and net profit (EUR -23.8m, 2022: EUR
42.8m, our estimate: EUR 4.5m) were much weaker. In terms of asset sales,
in 2023 WXF sold 9.88% in the Palais Hansen Kempinski Hotel for EUR 5.3m.
In the previous year, it generated proceeds of EUR 12.9m with the sale of
the B52 office building.
While WXF's equity ratio went down due to the loss in 2023, the company
continued to reduce its net debt, the majority of which is long term and
with a fixed rate. Warimpex mainly finances its new projects with its high
operating cash flow from the rental of office buildings and operation of
hotels.
You can download the research here:
http://www.more-ir.de/d/29637.pdf
For additional information visit our website
https://eastvalueresearch.com/.
Contact for questions
Adrian Kowollik
Email: ak@eastvalueresearch.com
Tel. +49 30 20609082
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The result of this research does not constitute investment advice
or an invitation to conclude certain stock exchange transactions.
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