Original-Research: Warimpex Finanz- und Beteiligungs AG (von East Value Resea...

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Original-Research: Warimpex Finanz- und Beteiligungs AG - from East Value Research GmbH

Classification of East Value Research GmbH to Warimpex Finanz- und Beteiligungs AG

Company Name: Warimpex Finanz- und Beteiligungs AG

ISIN: AT0000827209

Reason for the research: Update

from: 07.05.2024

Target price: EUR 2.23

Target price on sight of: 12 Monaten

Last rating change:

Analyst: Adrian Kowollik

While they were better than our estimates on the revenue and EBITDA level,

Warimpex' EBIT and net income disappointed due to an unexpected

remeasurement loss of EUR 38.3m (thereof: EUR 36.7m in Russia), which

resulted from higher interest rates and lower expected rent income. Both

factors currently affect the whole real estate sector. Positive was the

significant improvement of operating cash flow, which more than doubled to

EUR 24.8m, and the further reduction of net debt to EUR 212.6m (only 20% of

interest-bearing debt is on variable rates and only 12.4% is short-term).

Although the market environment for all real estate companies should slowly

improve as central banks start lowering their interest rates, the main risk

at WXF remains the high exposure to Russia (35% of Gross Asset Value, 62.1%

of total turnover). Given a lower peer-group-based FV (EUR 2.66 vs, EUR

3.23 before), we derive a new 12-months PT (50% NNNAV that we have

additionally discounted by 50% due to the exposure to Russia, 50% peer

group) for Warimpex of EUR 2.23 (previously: EUR 2.69). Due to the

currently difficult market environment we now only expect the opening of

new office buildings (Mogilska IV, Chopin, West Yard and MC55) in

2027E-2028E.

In 2023, Warimpex' results were affected on the one hand by higher

occupancy and average prices at its hotels, first-time full consolidation

of the fully occupied Avior (from January 2023) and c. 64% occupied

Mogilska 35 (from November) buildings, and on the other an unexpected,

significant remeasurement loss and weaker rouble. Total turnover equalled

EUR 49.7m (.1% y-o-y, our estimate: EUR 48.5m), of which 62.1% (2022:

62.9%) stemmed from Russia. While EBITDA (EUR 21.6m, % y-o-y, our

estimate: EUR 21.6m) was in-line with our estimate, EBIT (EUR -16.8m, 2022:

EUR 59.2m, our estimate; EUR 18.8m) and net profit (EUR -23.8m, 2022: EUR

42.8m, our estimate: EUR 4.5m) were much weaker. In terms of asset sales,

in 2023 WXF sold 9.88% in the Palais Hansen Kempinski Hotel for EUR 5.3m.

In the previous year, it generated proceeds of EUR 12.9m with the sale of

the B52 office building.

While WXF's equity ratio went down due to the loss in 2023, the company

continued to reduce its net debt, the majority of which is long term and

with a fixed rate. Warimpex mainly finances its new projects with its high

operating cash flow from the rental of office buildings and operation of

hotels.

You can download the research here:

http://www.more-ir.de/d/29637.pdf

For additional information visit our website

https://eastvalueresearch.com/.

Contact for questions

Adrian Kowollik

Email: ak@eastvalueresearch.com

Tel. 30 20609082

-------------------transmitted by EQS Group AG.-------------------

The issuer is solely responsible for the content of this research.

The result of this research does not constitute investment advice

or an invitation to conclude certain stock exchange transactions.

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