InCity Immobilien AG: WITH A CONSOLIDATED LOSS OF EUR 2.9 M ACC. TO HGB, INCITY’S ON TARGET FOR 2022 – CONTINUED HIGH HIDDEN RESERVES IN THE PORTFOLIO
EQS-News: InCity Immobilien AG / Key word(s): Annual Report
WITH A CONSOLIDATED LOSS OF EUR 2.9 M ACC. TO HGB, INCITY’S ON TARGET FOR 2022 – CONTINUED HIGH HIDDEN RESERVES IN THE PORTFOLIO
Schönefeld, 27 April 2022 – The annual report of InCity Immobilien AG (“InCity AG”) published today reports a net loss (acc. to HGB) of EUR 2.9 m at Group level and a net loss of EUR 1.9 m at single-entity annual financial statement level for fiscal year 2022. The final results thus correspond to the preliminary figures published on 28 March 2023. The decrease compared to the results of the prior fiscal year (2021: EUR 1.0 m at Group and EUR 2.1 m at single-entity annual financial statement level) results in particular from one-off effects in the prior year with a significant positive profit contribution (mainly the sale of the portfolio property at “Werftstrasse 3” by way of a share deal). In addition, InCity AG’s single-entity annual financial statements for 2022 are also characterised, due to an existing profit transfer agreement with the InCity subsidiary IC Objekt8 Frankfurt GmbH, by a non-liquidity-related extraordinary depreciation of the portfolio property held by the latter company located at “Stiftstrasse 18/20” in Frankfurt am Main in the amount of approximately EUR 1.8 m. “At Group level, the result was in line with our planning; by contrast, the result of the single-entity annual financial statements – taking into account further relevant mutually offsetting one-off effects – fell below the forecast figure, mainly due to the extraordinary non-liquidity-related depreciation of the portfolio property held by IC Objekt8 Frankfurt GmbH (“Stiftstrasse 18/20”). However, with the exception of this property, the market values of all other portfolio properties of InCity remain – for the greater part significantly – above their HGB carrying amounts, although the changes in capitalisation interest rates have, for the first time in several years, led to a decrease in market values for the portfolio properties. The latter was to be expected based on the general market development, and particularly in view of the above, the hidden reserves of our property portfolio, which continue to be high, are an indicator of the quality of our properties, as is the stable development of the income from the rental of portfolio properties”, says CFO Helge H. Hehl.
As of the balance sheet date on 31 December 2022, the InCity Group’s property portfolio comprised seven properties in total, five residential and commercial buildings and two office properties in Berlin and Frankfurt am Main. The number of portfolio properties held by InCity thus remained constant in fiscal year 2022. As of 31 December 2022, the HGB carrying amount of the property portfolio amounted to approximately EUR 149 m (31 December 2021: around EUR 152 m); the decrease can be explained by the standard annual amortisations and depreciations to be carried out according to HGB as well as the above-mentioned extraordinary non-liquidity-related depreciation of a portfolio property; neither additions nor disposals were recorded in the past fiscal year.
InCity Immobilien AG’s equity ratio was 89.6% as of the balance sheet date on 31 December 2022 (31 December 2021: 91.3%). The Group’s equity ratio was approximately 45.9% as of the balance sheet date (31 December 2021: 50.1%) and thus remained at a high level. The decrease of the Group’s equity ratio compared to the prior year is mainly due to the consolidated net loss generated in the reporting year in connection with the increase of total assets as a result of the progress in construction of the new office property in Schönefeld.
The net asset value (NAV) of InCity AG’s shares was EUR 1.66 per share as of 31 December 2022 (31 December 2021: EUR 1.88 per share). The decrease of the NAV reflects the development of the market value of the property portfolio in particular. As part of a valuation performed by an external third party as of 31 December 2022, the market value was determined to be EUR 207.0 m (31 December 2022: EUR 227.2 m). This decrease mainly relates to an increase in the capitalisation interest rates used (or the decrease of the multipliers used on the achievable market rents for the portfolio properties). For “Stiftstrasse 18/20” in Frankfurt am Main alone, an extraordinary and non-liquidity-related depreciation – as described above – became necessary for HGB accounting, as the currently determined market value is below the HGB carrying amount in this case (at amortised cost: acquisition costs reduced by the standard amortisation according to the expected useful life). For the six other portfolio properties, the market values determined as of the cut-off date remain – the greater part significantly – above the acquisition costs at amortised cost.
With a view to the current fiscal year 2023, the Management Board forecasts a net loss for the year of between EUR -3.8 m and EUR -4.3 m in the InCity consolidated financial statements. This will primarily be due to ordinary HGB depreciation of around EUR 1.9 m on property, plant and equipment, of which in turn around EUR 1.8 m is attributable to the portfolio properties, as well as investments in the portfolio. The latter are expected to amount to between EUR 3.1 m and EUR 3.6 m and will not be capitalised, and instead have a negative effect on results. The vast majority of the planned investments are value-enhancing measures.
As a multi-disciplinary real estate company, InCity Immobilien AG (referred to in the following as InCity AG) is dedicated to creating and increasing the value of property portfolios and operates in the fields of asset management and project development. For its property portfolio, InCity AG focuses on the real estate markets of the two major cities Berlin and Frankfurt am Main and pursues a sustainable investment strategy. The decisive factors here are location, property quality and long-term value stability. Accordingly, the portfolio consists of high quality core properties with value stability in Berlin as well as properties in locations in Frankfurt that are attractive in the long term with investment volumes between EUR 5 m and EUR 50 m. In addition, InCity AG assumes comprehensive and individually developed asset management contracts for third parties. InCity AG significantly strengthened its project development business unit in July 2021 by undertaking a contract, as a general contractor, for the construction of a new office property in the immediate vicinity of the Berlin-Brandenburg (BER) airport, as well as adding its own project development activities.
27.04.2023 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG.
InCity Immobilien AG
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