DGAP-News: Instone Real Estate Group AG: Final results for Q1 2020 confirm positive start to the year

Instone Real Estate: Final results for Q1 2020 confirm positive start to the year

- Adjusted revenues of EUR 99.7 million for the first quarter considerably above the previous year's level (+18.4%)

- Significant increase in adjusted EBIT (EUR 18 million, +14.6%) and adjusted net income (EUR 8.7 million, +13.0%)

- Adjusted gross profit margin of 29.8% remains at an attractive level

- Starting in the second quarter the COVID-19 pandemic has a negative impact mainly on the speed of sales. The Management Board still expects a clearly positive operating cash flow for the full year, however

- First-time of dividend payment for the full year 2020 still planned (target distribution ratio: 30% of adjusted net income)

- Management Board confirms earnings outlook of at least EUR 90.0 million (adjusted net income) for 2021 and mid-term growth targets

Essen, 28 May 2020: Instone Real Estate Group AG ("Instone") started to the current financial year in the first quarter of 2020 as planned. The group continued its dynamic course of growth with a significant increase in revenues and earnings compared to the same quarter in the previous year. Beginning in the second quarter, however, a noticeable slowdown, particularly in sales, is anticipated due to the effects of the COVID-19 pandemic. While construction activity continues to progress according to plan, demand is currently restrained as a result of the adopted restrictions and the general increase in uncertainty. Nevertheless, Instone expects a clearly positive operating cash flow for the full year and confirms its mid-term targets.


"In view of the noticeable economic effects of the COVID-19 pandemic, it appears German residential real estate has once again gained in relative attractiveness as an asset class due to its high level of stability and value retention. As a leading residential developer, Instone is in an excellent position to seize the opportunities that arise on the market and to achieve its ambitious mid-term growth targets," says Kruno Crepulja, CEO of Instone Real Estate Group AG.

Good start to the year, as planned

The final figures for the first quarter of 2020 confirm the preliminary results. Adjusted revenues increased by 18.4% year-on-year to EUR 99.7 million in the reporting quarter (Q1-2019: EUR 84.2 million). According to Instone management, the continued high gross profit margin of 29.8% is clear evidence of the high quality of Instone's project pipeline and its focus on attractive city-centre locations in A-cities and metropolitan regions and of Instone's expertise in project acquisition, planning and execution capabilities.

Platform costs in the first quarter were nearly at previous year's level, thus the adjusted operating result (EBIT) rose by 14.6% to EUR 18.0 million (previous year EUR 15.7 million). As expected, the purchase of land particularly in the second half of 2019, thus investments in future growth, resulted in a significant increase in financing costs to EUR 4.7 million (previous year EUR 2.5 million).

COVID-19: restraint in demand, construction activity proceeds according to plan

With the escalation of the corona crisis, the Management Board's focus is on safeguarding the health of employees, customers and suppliers. Moreover, in view of the existing project pipeline of EUR 5.745 billion, the Management Board has temporarily put additional growth investments on hold, despite the favourable cash position and strong balance sheet, and currently plans to only selectively carry out further project acquisitions during the year. As of the reporting date, available cash including unused loan facilities totalled EUR 250 million. The company also had around EUR 240 million in unused lines for project-level financing.

Management Board confirms targets for the 2021 and 2022 financial years and its intention for a first-time dividend payment for the 2020 financial year

Based on the existing project portfolio as of 31 March 2020 with an expected sales volume of EUR 5.75 billion, management confirms the targets communicated for the 2021 and 2022 financial years.

Beginning in the second half year, the Management Board expects a gradual stabilisation and recovery of the macroeconomic environment and confirms the existing mid-term targets for adjusted revenues (2021: EUR 900.0 million to EUR 1.0 billion; 2022: > EUR 1.0 billion). At the same time, the company confirms its earnings outlook for the 2021 financial year with an expected adjusted net income of at least EUR 90.0 million.

Given the existing cash position, Instone is in an outstanding position to take advantage of additional growth opportunities.

Furthermore, the Management Board still intends to distribute a share of around 30% of its adjusted net income as a dividend to shareholders, starting in 2021 for the 2020 financial year.

"Instone is financially very well positioned. Despite the distortions related to COVID-19, we also expect to continue generating a clearly positive operating cash flow for the current financial year and maintain our intention to pay a dividend, for the first time, for the 2020 financial year," says Foruhar Madjlessi, CFO of Instone Real Estate Group AG.

The Quarterly Group Statement Q1 2019 is available on the company website for download at the following address: https://ir.de.instone.de/websites/instonereal/English/3200/financial-reports.html

* The definitions of the alternative performance indicators mentioned in the press release can be found in the glossary on the company's website at https://ir.en.instone.de/websites/instonereal/English/3600/glossary.html

About Instone Real Estate (IRE)

Instone Real Estate is one of Germany's leading residential developers and is listed in the SDAX. The company develops attractive multi-family and residential buildings as well as publicly subsidised housing, designs modern urban quarters and refurbishes listed buildings for residential use. Buyers are mainly owner-occupiers, private investors with an intention to let, and institutional investors. In 29 years, Instone Real Estate has successfully developed more than one million square metres. In total, 380 employees work at nine locations nationwide. As of 31 March 2020, the company's project portfolio comprised 53 development projects with an expected total sales volume of roughly EUR 5.75 billion and 12,952 units.

Investor Relations

Instone Real Estate

Burkhard Sawazki

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45131 Essen

Tel.: +49 (0)201 45355-137

E-Mail: [email protected]


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Instone Real Estate

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10179 Berlin

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E-Mail: [email protected]