MAGNAT Real Estate AG: MAGNAT publishes 2010/2011 financial year results

MAGNAT Real Estate AG / Key word(s): Final Results

28.07.2011 / 17:18


- Consolidated net result of EUR -15.2 million strongly affected by special
effects (previous year: EUR -14.0 million)
- Higher earnings from rent and property disposals offset by impairment
charges applied to at-equity valuations and receivables
- Equity ratio improves slightly to 63.2%, net debt down to EUR 45.1
million compared with EUR 50.7 million, and liquidity of EUR 5.3 million as
of March 31, 2011

Frankfurt am Main, July 28, 2011 - At its meeting today, the Supervisory
Board of MAGNAT Real Estate AG ('MAGNAT', ISIN DE000A0XFSF0) concerned
itself extensively with the single-entity annual financial statements and
consolidated financial statements for the 2010/2011 financial year,
including the management reports for both the single-entity and the Group,
which have been audited and furnished with unqualified audit certificates.
Supervisory Board adopted the single-entity annual financial statements,
and approved the consolidated financial statements.

Earnings in the 2010/2011 financial year were impacted by countervailing
trends: tangible growth in rental earnings from portfolio properties to EUR
3.0 million, compared with EUR 2.4 million in the previous year, a EUR 2.3
million disposal gain on the sale of properties - no properties were sold
in the previous year - and a marked improvement in the net financial result
to EUR 0.8 million (previous year: EUR -3.6 million), were offset, to the
tune of EUR -11.1 million (compared with EUR -5.8 million) of higher losses
on companies measured at-equity, and a loss on asset management arising
from services rendered for third parties (EUR -0.5 million, compared with
EUR 0.2 million).

Earnings before interest and tax (EBIT) amounted to EUR -16.0 million,
compared with EUR -10.0 million, and earnings before tax stood at EUR -15.1
million, compared with EUR -13.5 million. The consolidated net result
amounted to EUR -15.2 million, compared with EUR -14.0 million in the
previous year. After deducting minority interests (EUR -1.9 million,
compared with EUR -2.8 million), EUR -13.3 million was attributable to
shareholders, compared with EUR -11.2 million. This is equivalent to
earnings per share of EUR -0.96, compared with EUR -1.35. An average of
13,889,651 shares were in issue in the year under review, compared with
8,329,329 in the previous year.

Earnings from the rental of portfolio properties benefited from both a 5.0%
increase in revenue - a direct consequence of the further reduction in the
void rate - and a 6.9% reduction in operating expenses. Earnings on
property disposals reflect the successful resale of property as part of
house builders schemes in Austria within the Asset Management business

With regard to earnings from Asset Management arising from services
rendered for third parties, it should be noted that this segment was not
consolidated until August 31, 2009 in the previous year. Accordingly,
revenue in the year under review was up by almost 75% to EUR 1.3 million,
compared with EUR 0.7 million. The increase in expenses to EUR 1.7 million,
compared with EUR 0.5 million in the previous year, essentially reflects a
valuation allowance applied to receivables arising from Asset Management
services due from the Austrian bond companies, which communicated to MAGNAT
on February 25, 2011 that they would initiate reorganisation proceedings,
totalling EUR 1.3 million necessitated in this connection.

Impairment charges based on updated valuation surveys burdened earnings on
companies measured at equity to the tune of a total of EUR 5.0 million. The
surveys, which are prepared annually, identified the need for write-downs
primarily for the Ukrainian investments. In addition, and as a consequence
of a restructuring under corporate law, EUR 2.5 million of losses were
reported on a Polish development project. In contrast, a corresponding
positive change arose from the measurement of loans issued to the project
company, which is reported under the financial result.

Additionally, a EUR 3.4 million impairment charge connected with the
interest in the operating company for the Hotel Palais Schwarzenberg
project placed a burden on earnings. MAGNAT holds a 25.1% interest in
Schwarzenberg, equivalent to EUR 4.1 million of equity. At the same time,
MAGNAT has an exit right from this company, which the company utilised
after the end of the financial year. In light of the debate that has
entered the public arena concerning its former partner's solvency, MAGNAT
has already written down the respective at-equity valuation in the
2010/2011 financial statements. It has done this irrespective of the fact
that MAGNAT will deploy all legal means to satisfy its receivable.

The tax claim submitted by the Turkish tax authorities subsequent to
partial disposals from the YKB portfolio was reduced to EUR 6 million, as
already reported, and this provision was carried through the income
statement in the YKB portfolio. The 33% share attributable to MAGNAT
amounts to EUR 2 million.

Other operating income rose from EUR 2.8 million to EUR 5.0 million in the
year under review. General administrative costs increased from EUR 4.6
million to EUR 7.5 million primarily due to the first-time consolidation on
a 12 month basis of Asset Management. Other operating expenses were up to
EUR 7.1 million in the reporting year, compared with EUR 5.0 million in the
previous year. It should be noted in this context that, along with the
aforementioned valuation allowances applied to receivables, a further EUR
3.9 million of specific valuation allowances were required for receivables
(previous year: EUR 2.0 million). Other operating expenses were also
burdened by an impairment charge of EUR 1.8 million applied to portfolio
properties due to a valuation survey, compared with EUR 1.4 million in the
previous year. Excluding these one-off effects, other operating expenses
were reduced by 15.5% to EUR 1.4 million.

The reversal of an impairment charge applied to loans made to the Polish
project company exerted a positive impact on financial income. In the
previous year, financial expenses still included impairment charges applied
to loans to companies measured at equity.

Total assets fell by 15.4%, from EUR 176.7 million in the previous year to
EUR 149.4 million in the 2010/2011 financial year. The liquidity position
amounted to EUR 5.3 million as of the reporting year balance sheet date,
compared with EUR 8.8 million in the previous year. The equity ratio stood
at 63.2%, compared with 63.1% in the previous year. Net debt (financial
debt minus cash) amounted to EUR 45.1 million in the year under review,
compared with EUR 50.7 million in the previous year.

Due to changes in real estate valuation services, and revaluations of
receivables, the net asset value calculated in line with EPRA regulations
amounted to EUR 85.7 million as of the balance sheet date, compared with
EUR 106.0 million. This corresponds to EUR 6.17 of net assets per share,
compared with EUR 7.60 in the previous year. Both of these earnings per
share measurements are based on 13,894,651 shares in issue.

The annual financial report for the 2010/2011 financial year will be
available from July 29, 2011 at the company's website at
MAGNAT Real Estate AG is the first Frankfurt-listed real estate company
that focuses on property development in Eastern European, Austrian and
German conurbation areas.
MAGNAT is an integrated real estate group, covering the entire value chain
comprising the purchase, development and sale of projects and construction
land. The Group also offers real estate asset management for third parties.

MAGNAT Real Estate AG
Investor Relations
Dr. Joachim Fleing / Charlotte Frenzel
Lyoner Strasse 32
60528 Frankfurt/Main
Telephone: +49 (0) 69-719 189 79 36
Fax: +49 (0) 69-719 189 79 11

Press Relations
edicto GmbH
Axel Mühlhaus / Werner Rüppel
Telephone:  +49 (0) 69-905 50 55 2

End of Corporate News


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Language:    English                                             
Company:     MAGNAT Real Estate AG                               
             Lyoner Straße 32                                    
             60528 Frankfurt am Main                             
Phone:       +49 (0)69 / 719 189 79 0                            
Fax:         +49 (0)69 / 719 189 79 11                           
ISIN:        DE000A0XFSF0                                        
WKN:         A0XFSF                                              
Listed:      Regulierter Markt in Frankfurt (General Standard);  
             Freiverkehr in Berlin, Stuttgart                    
End of News    DGAP News-Service  
133631 28.07.2011