Swiss Prime Site increases revenue and profit
Swiss Prime Site increased operating income by almost 4% to CHF 607.7 million in the first half of 2019. Profit increased to 356.5 million, compared with 152 million in the previous year.
Compared to the previous year, operating income grew by 3.8% to 607.7 million, according to Swiss Prime Site. Both segments - real estate and services - contributed to the growth.
The core real estate business increased its income by 2.9% to 251.9 million; according to Swiss Prime Site, the reason for the plus is higher income from real estate developments. Real estate-related services increased their contribution by 4.3% compared to the previous year.
The value of the real estate portfolio increased by 2.4% to 11.5 billion compared to the end of 2018. As of June 30, 2019, Swiss Prime Site held a total of 192 properties in its portfolio, two more than at the end of 2018. The net yield declined from 3.7% to 3.5%; the vacancy rate remained stable at 4.7%.
Significant profit increase
In the first half of 2019, Swiss Prime Site generated a profit of 356.5 million - a significant increase on the previous year, when the figure was 152.0 million. This mainly includes positive effects from revaluations and the reversal of deferred tax liabilities amounting to 158.1 million, which are related to tax rate reductions at cantonal level, the company said.
Operating income (EBIT) at the end of the first half of 2019 was 286.1 million (previous year: 232.9 million), with the Real Estate segment contributing the bulk at 263.5 million (+21.4%), according to Swiss Prime Site.
At 85.7 million, revaluations were significantly higher than in the previous year (35.6 million). Excluding revaluations, EBIT amounted to 200.8 million, compared with 197.8 million in the prior-year period.
12.6 million Profit from sales
The real estate company generated pre-tax profits totaling 12.6 million from the sold development projects Espace Tourbillon in Plan-les-Ouates Weltpost Park in Berne and a sold retail property in Geneva.
Swiss Prime Site's equity ratio was 43.6% at the end of June 2019, and the loan-to-value ratio of the real estate portfolio was 46.6% (previous year 47.7%). NAV after deferred taxes was CHF 68.64 per share, up 5.2% year-on-year. Swiss Prime Site's annualized return on equity is put at 13.8% (previous year 6.4%).
Tertianum to be sold
Swiss Prime Site also announces that a sales process is to be initiated for the Tertianum Group. The background to this is a focus on the core business and directly related business areas, according to the statement. The sale is expected to be completed in the first half of 2020. Tertianum has 78 locations across Switzerland and generated revenues of CHF 206.1 million (+6.4%) in the reporting period. (ah)
