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The forecast for 2023 cannot be achieved due to business performance in the first half of the year and the persistently weak market conditions
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It is currently not possible to provide a well-founded and reliable forecast framework
Berlin, August 31, 2023 – The persistently challenging economic environment continued to severely impact the German housing market in the second quarter of 2023, following a weak start to the year. Accordingly, investment volume in the sector was down by more than 60% compared to the previous year, marking the lowest first-half revenue since 2011. Residential real estate prices also continued to decline, albeit at a significantly slower pace recently than in previous quarters.
The challenging market conditions had a significant impact on ACCENTRO’s business performance in the first half of 2023. Consolidated revenue fell to EUR 36.1 million during the reporting period (comparative period: EUR 93.5 million). This is primarily attributable to the significant decline in revenue to EUR 26.7 million (comparative period: EUR 84.8 million) in the “Trade and Privatization” segment, resulting from the sharp decline in the volume of notarized transactions since the second half of 2022, as well as market price trends. Rental income, on the other hand, posted another increase. Due to the continued expansion of the portfolio last year and rent increases, revenue rose by approximately 17% to EUR 9.1 million (comparative period: EUR 7.8 million).
Consolidated earnings before interest and taxes (EBIT) amounted to -9.4 million EUR in the first six months (comparative period: 9.0 million EUR). The significant decline compared to the same period last year is also largely attributable to developments in the “Retail and Privatization” segment. By contrast, earnings from leasing showed a positive trend due to a significant improvement in margins.
Consolidated comprehensive income fell to -24.6 million EUR (comparative period: -2.3 million EUR). This was also influenced by the increase in interest expense resulting from the refinancing of the two bonds. Earnings per share amounted to -0.75 EUR (comparative period: -0.07 EUR). The equity ratio rose to 28.4% as of June 30, 2023 (as of December 31, 2022: 28.2%).
Given the business performance in the first half of the year, the market situation that remains extremely tense, and the ongoing weak demand in the housing market, the Executive Board no longer expects that the forecast for fiscal year 2023—first issued at the end of April with the publication of the 2022 Annual Report (revenue: EUR 100–120 million, EBIT: 0–2 million EUR) can be achieved. Furthermore, due to the unpredictable business environment, the Executive Board is currently unable to provide a well-founded and reliable forecast framework for the current fiscal year. The forecast is therefore temporarily suspended. For the 2023 fiscal year, a significant decline in consolidated revenue and consolidated earnings before interest and taxes (EBIT) is to be expected compared to the original forecast.
An improvement in the market situation requires, above all, more stable economic conditions. These are an essential prerequisite for investors and private individuals alike to become more willing to engage in transactions again. In this regard, the development of interest rates and housing prices plays a particularly decisive role. Even though further interest rate hikes by the European Central Bank are expected this year and it is still too early to say that prices have bottomed out, a gradual stabilization of both factors appears possible.
Jörg Neuß, CEO of ACCENTRO, looks to the future with confidence: “Despite the current difficult economic situation and its impact on our industry, the fundamentals show that the German housing market remains intact and has significant growth potential. The demand for housing remains high and is met by a supply that is far too scarce—a situation further exacerbated by the massive slump in new construction. ACCENTRO is ideally positioned to benefit from this long-term growth. As Germany’s leading residential privatization company, with an attractive real estate portfolio and a housing stock that offers significant potential for rent and value appreciation, we are well-positioned for the coming years.”
About ACCENTRO Real Estate AG
ACCENTRO Real Estate AG is a residential real estate investor and the market leader in residential privatization in Germany. As of June 30, 2023, its real estate portfolio comprised 5,815 units with a total area of approximately 340,000 square meters. The book value of the entire portfolio amounted to around 600 million EUR. In addition to Berlin, its regional focus includes major cities and metropolitan areas in central Germany as well as the Rhine-Ruhr metropolitan region. ACCENTRO’s business activities encompass three core areas: the sale of apartments to private owner-occupiers and investors at rental-level prices; the sale of real estate portfolios to institutional investors; the management of its own real estate portfolio; and services for third parties. The shares of ACCENTRO Real Estate AG are listed on the Prime Standard segment of the Frankfurt Stock Exchange (WKN: A0KFKB, ISIN: DE000A0KFKB3). www.accentro.de
Investor Relations Contact:
Thomas Eisenlohr
ACCENTRO Real Estate AG
Kantstraße 44/45
10625 Berlin
Email: eisenlohr@accentro.de
Phone: +49 (0)30 88 71 81 272