DGAP-News: InCity Immobilien AG: INCITY'S SEMI-ANNUAL RESULT FOR 2019 ON TARGET - FORECAST FOR ENTIRE YEAR 2019 CONFIRMED

INCITY'S SEMI-ANNUAL RESULT FOR 2019 ON TARGET - FORECAST FOR ENTIRE YEAR 2019 CONFIRMED
 

• Consolidated loss in first half of 2019 as planned, positive result at single-entity level
• Change in ownership for one portfolio property, another portfolio property sold opportunistically
• Forecast for entire year 2019 remains unchanged

Frankfurt am Main, 19 September 2019. In its semi-annual financial statements for 2019 published today, InCity Immobilien AG reports a net profit of EUR 53 k at single-entity financial statement level and a net loss of EUR -870 k at Group level. This means that the results are nearly at the level of the first half of 2018 (semi-annual results for 2018: single-entity: EUR 93 k, Group: EUR -753 k). The Group's result of operations (EBITDA) was EUR 890 k, an increase of EUR 303 k over the same period of the prior year; this is mainly due to the sale of the property company holding the portfolio property at "Jacobsohnstrasse 27" in Berlin (EUR 261 k). "The results are in line with our plans," says CFO Helge H. Hehl. "It should also be noted that, due to accounting according to the German Commercial Code (HGB), the increasing value of our properties is not reflected in the reported result, while scheduled HGB depreciation of the properties had a negative effect of around EUR 800 k on the Group's results in the first half of 2019."
 

InCity's focus in the first half of 2019 was on continuing to implement the leases and renovation measures initiated in the previous years. All portfolio properties have a very good letting situation and no significant vacancies. The property at "Jägerstrasse 54/55" in Berlin-Mitte as well as the flats in the newly acquired property at "Leipziger Platz 8" in Berlin-Mitte are an exception to this. After the end of the first half of 2019, the office spaces (around 4,200 sqm) at "Jägerstraße 54/55" were transferred to the existing tenant. These spaces will generate annualised rental income of approximately EUR 1 m from the autumn of 2019 onwards. On 31 March 2019, the change in ownership and transfer of risks and rewards took place for the portfolio property purchased in November 2018 located at "Leipziger Platz 8" in Berlin-Mitte. The property is a ten-storey residential and commercial building with mainly office units and is located centrally at the Leipziger Platz, a prime location. The property features a rentable area of approximately 5,100 sqm, of which more than two thirds are allotted to office space, which is fully let. Three flats currently being renovated account for the remaining area.
 

In April 2019, InCity sold the portfolio property at "Jacobsohnstrasse 27" in Berlin as part of a share deal. As mentioned above, this sale resulted in a profit of approximately EUR 261 k at Group level. Including these two transactions, the InCity Group's property portfolio consisted of nine portfolio properties as of the balance sheet date on 30 June 2019, unchanged from 31 December 2018.
 

The 2019 earnings forecast for the InCity Group and InCity AG (single entity), issued in March 2019, remains unchanged and is therefore confirmed. Without taking into account positive earnings contributions from potential acquisitions, a net loss for the year of between
EUR -2.1 m and EUR -2.4 m is still expected for the Group. The effect on consolidated results from the sale of the portfolio property at "Jacobsohnstrasse 27" was not included in the forecast issued in March. The delay in transferring the commercial spaces at "Jägerstrasse 54/55" in Berlin-Mitte to the tenant has had an opposite effect, so that the earnings forecast remains unchanged. A net income of between EUR -0.3 m and EUR +0.1 m for the year continues to be forecast at the single entity level of InCity AG - also without taking into account potential acquisitions.
 

"We succeeded in generating value for our company and our shareholders, in particular through active asset management," says Michael Freund, CEO of InCity Immobilien AG. "We remain confident that our preferred locations Berlin and Frankfurt will continue to offer potential for growth. Despite the sale of the property at "Jacobsohnstrasse 27" in Berlin, the expansion of the property portfolio remains the focus of our activities. Nevertheless, we will take advantage of opportunities for sale if this is in the best interest of the Company and its shareholders. However, due to the continuing shortage of properties for sale on the real estate market in conjunction with our strict purchase criteria, a slowdown in purchases is to be expected in the coming years."
 

The significant increases in market value as a result of the positive market development as well as the operating value appreciation through active asset management are not taken into account in HGB accounting. However, this results in hidden reserves. As in the prior year, InCity subjected its portfolio properties to a market valuation by a third party as of 31 March 2019. This valuation took into account the property at Leipziger Platz 8. Based on the nine portfolio properties owned as of 30 June 2019 amounting to approximately EUR 205.7 m (without "Jacobsohnstrasse 27" in Berlin) and taking into account capitalised, value-raising renovation investments of approximately EUR 4.9 m in the second quarter at "Jägerstrasse 54/55" in Berlin-Mitte as well as the other Group balance sheet items, a net asset value of EUR 1.46 per share results as of 30 June 2019. Therefore, the InCity shares are valued with a significant NAV deduction. Details on the portfolio properties can be found in the updated company presentation, which can be viewed on the website along with the semi-annual financial statements for 2019 (www.incity.ag).
 

Contacts for enquiries:

InCity Immobilien AG                    
Beethovenstrasse 71           
60325 Frankfurt am Main, Germany
www.incity.ag

Press  
Thomas Luber
Tel.: +49 (0)69 7191889 66
[email protected]

Investor relations
Helge H. Hehl, CFA
Tel.: +49 (0)69 7191889 55
[email protected]
 

About InCity Immobilien AG
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 real estate 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 which range in value between EUR 5 m and EUR 50 m. In addition, InCity AG assumes comprehensive and individually developed asset management contracts for third parties that are adjusted to meet the needs of the respective property or portfolio.
Visit the website for further information about the company: www.incity.ag