Pax Anlage: Loss in the first half of the year
Pax Anlage has to report a loss of almost eleven million CHF in the first half of the year. This was due to value adjustments resulting from the revaluation of properties, the company says.
The operating business of Pax Anlage AG developed positively in the first half of 2017, generating a net result of CHF 6.2 million before revaluations from the continuing segments of investment properties and development properties. However, the revaluations carried out on the properties led to net value adjustments of -15.9 million, resulting in a consolidated loss of 10.9 million in the first half of 2017.
Revaluation of existing portfolio leads to high value adjustment
In the portfolio properties segment, rental income increased by 40.1 percent to 4.2 million compared to the first half of 2016. This was mainly due to the acquisition of four properties in the previous year, Pax Anlage reports. Together with a slightly reduced direct expense from rentals, the company achieved a segment result of 3.5 million (previous year: 2.1 million). The gross yield generated in the first half of 2017 was 6.6 percent, compared to 6.2 percent in the same period last year. As of June 30, 2017, the vacancy rate measured in terms of target rental income was eight percent excluding properties under initial letting (end of 2016: 8.8 %) and 18.8 percent including initial letting (end of 2016: 22.8 %).
The revaluation carried out by PwC (previous year: Wüest Partner) led to a value adjustment of CHF 23.8 million to CHF 161.1 million (end of 2016: 184.9 million) for the existing portfolio. Pax Anlage Group did not acquire or sell any portfolio properties in the reporting period.
Development properties segment with higher earnings
During the reporting period, Pax Anlage signed contracts for the sale of condominiums with a transaction volume of 70.3 million, of which 31.1 million with taking possession in the first half of the year and 39.2 million with taking possession in the second half of this year. Overall, the Company reduced its portfolio of unsold properties from 338 at the end of 2016 to 283 units as of June 30, 2017, and the income from the sale of development properties with taking possession in the reporting period increased by 53 million to 87.4 million compared to the first half of 2016. The segment result generated in the first half of 2017 amounted to 2.7 million (previous year: 1.5 million).
The revaluation of development properties resulted in reversals of impairment losses of eight million net.
Reduction of vacancy rate and sale of condominiums
Pax Anlage Group intends to continue to focus on the sale of condominiums from the development property portfolio. Where development properties have not yet been completed or units have not yet been sold, the possibility of transferring them to the portfolio of existing properties and renting them out is being examined. In the case of existing properties, the focus is on efforts to reduce the excessively high vacancy rate, the company says.
Meanwhile, the SIX Swiss Exchange has approved the application of Pax Anlage AG for the delisting of the registered shares. Accordingly, the delisting of the shares will take place on October 10, 2017, with the last trading day of the Pax Anlage shares being October 9.
