UBM Development AG Maintains BUY Recommendation, Despite Market Challenges

NuWays AG provided an update on UBM Development AG, affirming a BUY recommendation with a target price of EUR 28.00 within a 12-month view. This follows a challenging fiscal year for UBM, evidenced by their final FY 2023 results which aligned with preliminary figures but showed a significant year-over-year sales decline of 36%. The real estate market's downturn, hitting a transaction volume low in Germany, heavily influenced these results.

UBM's revenue from property sales nearly halved, attributed to specific disposals, including a 34% share in Palais Hansen (Hotel) and the transfer of F.A.Z tower to HMG. The reported FY EBT of € -39.4m reflected negative impacts from property write-downs and increased discount rates, despite growing rent levels.

In light of the net loss, UBM plans to propose a dividend waiver at the AGM as a precaution. However, CEO Winkler assured this move does not signal a departure from their dividend policy, expressing optimism for future profitability and dividend reliability.

No 2024 guidance has been released, due to market uncertainty. UBM's focus remains on executing its timber pipeline and strengthening liquidity through strategic disposals. The company has made progress in this area, expecting results from these efforts in H1.

Despite the challenging market conditions and a slow recovery forecast, UBM's commitment to taxonomy-compliant hybrid-timber developments sets a positive outlook for its positioning in a market rebound. NuWays AG reiterates a BUY recommendation for UBM, maintaining a positive perspective amid cautious market conditions.