Original-Research: Warimpex Finanz- und Beteiligungs AG (von East Value Research GmbH ):

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 (+10.1% y-o-y, our estimate: EUR 48.5m), of which 62.1% (2022: 62.9%) stemmed from Russia. While EBITDA (EUR 21.6m, +31% 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. +49 30 20609082

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