DGAP-News: Instone Real Estate Group AG
/ Key word(s): 9 Month figures/Quarterly / Interim Statement
Instone Real Estate performs as planned in Q3 2020; forecast for 2020 and 2021 reiterated
- Adjusted revenues for the nine months 2020 down slightly on the previous year (-3.7%) at EUR 291.3 million despite the negative effects of COVID-19
- High gross margin of 32.3% underscores quality of project portfolio and first-class execution
- Adjusted EBIT fell to EUR 50.0 million (-11.8%) and adjusted EBT to EUR 34.4 million (-25.4%) due to negative operating leverage as well as investments in future growth
- Approved five new project acquisitions with Gross Development Value (GDV) of around EUR 600 million since end of June
- Strong balance sheet leaves Instone ideally positioned to exploit further attractive growth opportunities
- Earnings forecasts for 2020 and 2021 confirmed: adjusted earnings after tax for 2020: EUR 30-35 million; 2021: at least EUR 90 million
- Intention to distribute inaugural dividend for 2020 financial year confirmed (target distribution ratio: 30% of adjusted earnings after tax)
Market data for Instone's core markets confirms sustained high demand for residential properties as well as ongoing positive price trends. The asset class is widely recognised as offering superior resilience and stability as demonstrated throughout the pandemic.
"Demand for our products remains high. With the launch of our innovative affordable living product, we are tapping into a new market that offers immense growth potential. With our acquisitions and the continued expansion of our project portfolio we have further strengthened our basis to exploit this potential", says Kruno Crepulja, Chairman of the Management Board/CEO of Instone Real Estate Group AG.
Earnings reflect pandemic-driven decline in sales
Adjusted operating result (EBIT) fell by 11.8% to EUR 50.0 million (previous year: EUR 56.7 million). The adjusted EBIT margin for the first nine months was 17.2% (previous year: 18.8%), reflecting negative operating leverage and investments made in the Instone platform to enable the planned future growth.
Adjusted earnings after tax (EAT) in the first three quarters fell by 42.6% to EUR 24.9 million (previous year: EUR 43.4 million). Key drivers here were the decline in adjusted EBIT as well as increased interest expenses in relation to financing the expansion of Instone's project pipeline in 2019. Furthermore, 2019 comparable figures benefited from a first time recognition of tax loss carry forwards and an unusually low corresponding tax rate.
Increased growth potential via further acquisitions
"The COVID-19 pandemic has underpinned the resilience and stability of our business model. Given our financial and operational strengths, we now find ourselves in a position to quickly resume our ambitious growth path as previously communicated", says Dr. Foruhar Madjlessi, CFO of Instone Real Estate Group AG.
Confirmation of earnings forecasts for 2020 and 2021
In 2021, for the first time, the Management Board also intends to distribute approximately 30% of adjusted earnings after tax to shareholders as a dividend for the 2020 financial year.
The Q3 2020 quarterly statement is available for download on the company's website at: https://ir.de.instone.de/websites/instonereal/English/3200/financial-reports.html
The definitions of the alternative key performance indicators mentioned in the statement can be found in the glossary on the company's homepage at:
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. Over the past 29 years, Instone Real Estate successfully developed more than one million square metres. Its more than 400 employees work out of nine different locations nationwide. As of 30 September 2020, the company's project portfolio comprised 53 development projects with an expected total sales volume of c. 5.9 billion euros and 13,374 units.
Instone Real Estate
|Company:||Instone Real Estate Group AG|
|Phone:||+49 201 453 550|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart, Tradegate Exchange|
|EQS News ID:||1150709|
|End of News||DGAP News Service|