CA Immo presented its financial results for 2019 with a significant increase in recurring earnings (+13%) and rental income (+15%). The company expects challenging conditions on CA Immo's core markets due to COVID-19.
"Thanks to the profitable portfolio growth of recent years, we were able to significantly exceed the financial target set for 2019 to increase sustainable profitability, improve all profitability ratios and achieve another record consolidated net income. But even our successful business development is currently overshadowed by the global COVID-19 pandemic, the effects of which on our company cannot be fully assessed at this time. Thanks to the high quality of our portfolio's locations and buildings, the sector-diversified and high-quality tenant structure and our very robust balance sheet and high liquidity, we consider ourselves well equipped to meet this challenge and all its economic consequences with a high degree of resilience and stability. Our investment grade rating Baa2 with stable outlook was last confirmed by Moody's on March 18, 2020,” Andreas Quint, CEO of CA Immo explained.
Rental income increased by 14.7% to €220.7 million in 2019. In addition to the successful management of the investment portfolio with a high occupancy rate, this positive development is related to the portfolio growth in 2018. In addition to the project completions of the office building on Heidestrasse (Berlin), InterCity Hotel Frankfurt Central Station, Orhideea Towers (Bucharest) and ViE (Vienna), the acquired office buildings Warsaw Spire C (Warsaw), Campus 6.1 (Bucharest) and Visionary (Prague) made a clearly positive contribution year-on-year.
Earnings before interest, taxes, depreciation and amortization (EBITDA) of €171.7 million were up 18.4% on the previous year's level of €145.1 million. This rise was predominantly driven by a clearly higher rental result and reduced indirect expenditure.
Successful sale of the non-strategic stake in Immofinanz
In 2019, CA Immo sUccessfully sold the remaining stake in Immofinanz AG (a share volume of around 4.9% of the share capital issued by Immofinanz) on the market. The total investment generated a return on investment of €19 million, which corresponds to some 15% of the investment volume of around €130 million. CA Immo will use the proceeds from this non-strategic disinvestment to maintain its strong cash-position and invest in its core activities of investing, managing and developing modern office properties in its core markets.
Outlook
All economic forecasts have been revised in recent weeks on the occasion of the global COVID-19 pandemic. As a consequence, the company expects challenging conditions on CA Immo's core markets for the time being. The full impact on individual sectors and regions cannot yet be conclusively assessed but is subject to ongoing evaluation by CA Immo. With around 90% office share of the investment portfolio, which is almost fully occupied (occupancy rate: 96.1%), very good quality of location and buildings, and a diversified, high-quality tenant structure with a wide range of sectors, CA Immo is highly resilient. The robust balance sheet (50.4% equity ratio) and very comfortable liquidity position (cash and cash equivalents of €439.1 million as at 31.12.2019 and an additional net income of around €400 million from the benchmark bond issued in February 2020) provide stable backing and enable investments to be made even in a more difficult market environment. Beyond that, CA Immo takes a variety of measures to minimise potential negative effects on the company.
In order to protect the safety of its tenants and staff as effectively as possible, CA Immo provides ongoing information on epidemiological and medical recommendations from local authorities and the WHO. According to the recommendations of the authorities, CA Immo also ensures that its buildings are equipped with adequate disinfection equipment and that general surfaces are cleaned and disinfected particularly frequently.
