DGAP-News: Instone Real Estate Group AG / Key word(s): Real Estate/Quarterly / Interim Statement
Instone Real Estate: successful third quarter brings significant increase in profits and revenues in the first nine months of 2019
- Adjusted earnings before interest and taxes (EBIT) show significant improvement and, consequently, a near tripling of the results to EUR 56.7 million (9M 2018: EUR 20.6 million)
- Adjusted revenues up by 35.9% to EUR 302.4 million (9M 2018: EUR 222.5 million)
- Adjusted gross profit margin increases to 32.7% (9M 2018: 26.8%)
- Sale of large-scale projects in Q3 2019 and important progress in construction reported
- Forecast for the fiscal year 2019 confirmed
Adjusted earnings before interest and taxes (EBIT) showed a significant year-on-year increase to EUR 56.7 million (9M 2018: EUR 20.6 million). Adjusted earnings before taxes (EBT) also rose considerably to EUR 49.4 million (9M 2018: EUR 13.8 million) as a result of the positive business development and improvement in the financing structure. Adjusted group earnings after taxes also showed appreciable growth, totalling EUR 46.7 million (9M 2018: EUR -1.7 million).
Instone's adjusted revenues for the first nine months of the year were EUR 302.4 million, up 35.9% on the prior year (9M 2018: EUR 222.5 million). The adjusted gross profit margin was 32.7% (9M 2018: 26.8%).
The number of projects during the reporting period also expanded due to new purchases and the acquisition of S&P Stadtbau, which has now also opened up the growing region of northern Bavaria for Instone. As of 30 September 2019, the project portfolio comprised a total of 52 development projects with an expected total sales volume of around EUR 5.4 billion and more than 12,000 units (30 June 2019: 47 projects) in all major metropolitan areas in Germany and in prospering medium-sized cities.
The third quarter of 2019 was marked by important progress in construction and the sale of large-scale projects to institutional investors. For example, the third quarter of 2019 saw the start of construction on the final phase of the "Schumanns Höhe" project in Bonn, a part of the "Marie" project in Frankfurt and the "Schwarzwaldstrasse" project in Herrenberg near Stuttgart. Sales activities for the "Amanda" project in Hamburg and the "Beethovenpark" project in Augsburg began in the third quarter of 2019.
For the "Niederkasseler Lohweg" project in Düsseldorf with 221 apartments and for the large-scale "Westville / Kleyerquartier" project in Frankfurt am Main with more than 1,200 planned apartments, forward sales contracts were also concluded with institutional buyers in the third quarter of 2019.
Forecast increase of 16 September 2019 confirmed
The Management Board of Instone Real Estate confirms the forecast for the 2019 fiscal year that was raised on September 16, 2019, considering the sale of the "Westville" project in Frankfurt as part of a forward sale. It continues to expect adjusted revenues in the range of EUR 700 million to EUR 750 million and adjusted earnings before interest and taxes (EBIT) of EUR 110 million to EUR 125 million. The Management Board also confirms the changed forecast for the adjusted gross profit margin of around 24%. Without taking into account the large "Westville" project with an expected sales volume of around EUR 600 million, the initial forecast for the gross profit margin of around 28% would have been confirmed.
Kruno Crepulja, CEO of Instone Real Estate, comments: "The highly favourable nine-month figures confirm that we are on the right track. For Instone, the fourth quarter will also be marked by significant contributions from contracts already concluded with institutional investors. Our product continues to enjoy considerable demand, which is why we believe we are optimally positioned for the future and for the objectives we have set ourselves."
The report on the third quarter of 2019 is available on the company website for download at the following address:
About Instone Real Estate (IRE)
Instone Real Estate is one of Germany's leading residential developers and is listed in the SDAX. The company develops attractive multi-family and residential buildings as well as publicly subsidized housing, designs modern urban quarters and refurbishes listed buildings for residential use. Buyers are mainly owner-occupiers, private investors intending to buy and let, and institutional investors. In more than 28 years, Instone Real Estate has successfully developed more than one million square metres. Around 360 employees work at nine locations nationwide. As of 30 September 2019, the company's project portfolio comprised 52 development projects with an expected total sales volume of roughly 5.4 billion euros and more than 12,000 units.