Dear shareholders and business associates,
The IPO in October of the 2006 business year marked the public debut of CA Immo International on the domestic property investment company market. Thriving on its strong roots in the CA Immo Group, the company champions lucrative investments in the most attractive property markets in the new Europe. The strategic goal pursued by developing the company in this way is to give institutional investors in particular the opportunity to share in the potential of these markets in the Central and Eastern European (CEE) and South East European (SEE) states and the CIS. Investors eagerly accepted the offering, as illustrated by the development of the share‘s key indicators. Between the company‘s first listing and the end of 2006, the market capitalisation increased from
€ 588 m to € 687 m. On average, about 299,400 shares changed hands on the stock exchange per trading day. In the first ten weeks after the first listing, the share price climbed by 17%, from € 13.52 to € 15.80 at the end of the year. The net asset value per share rose by 14% to
€ 13.41.
The balance sheet ratios seamlessly reflect this trend. Measured against 2005 – when CA Immo International was already active within the Group – all the key values increased significantly. The most significant revenue factor, rental income, increased by 49%, from € 25.6 m to € 38.2 m. The net operating income rose by 53%, from € 22.2 m to € 34 m. The EBITDA advanced from € 20.7 m to € 32 m, which represents growth of 55%. The EBIT climbed by 6% to close at € 63.8 m, and the consolidated net income reached € 47.8 m. The cash flow rose by an exceptional 42%, from € 18.9 m to € 26.9 m.
Dynamic portfolio
While the business was expanding, the property assets also increased by 8% to € 530 m. The equity rose by 140% to a total of € 583 m as of the balance sheet date. In the few weeks that elapsed between the IPO and the end of the year, we initiated a vigorous growth pattern that has been sustained in the current business year. The medium-term portfolio strategy is seeking to achieve a balanced mix of properties in CEE, SEE and the CIS. We took initial steps towards this goal in 2006. By way of our first investment in Moscow, for example, we made our debut on the Russian market. In Q1 2007 we took further steps along this route with investments in Serbia and Romania.
On many markets, development projects constitute the only focused way of establishing a strong and lucrative presence. In this context we pursue a dual strategy. On the one hand, we develop projects that will enrich the portfolio, with a view to exploiting the properties‘ earning power long-term. On the other hand, in individual cases, we sell the developed property if this option can achieve an appreciable increase in value and, therefore, generate a substantially higher return at a stroke.
Promising equity investments
Alongside its other measures, CA Immo International is seeking to grow by way of strategic equity investments. Two shareholdings were thus acquired in 2006. First, CA Immo International now holds a 51% interest in the CA Immo New Europe property fund, a project development fund for institutional wholesale investors, and second, it acquired a holding of 25% plus four shares in UBM Realitätenentwicklung AG, the Vienna real estate development company. This investment concurs with the strategic mission to extend the value chain of CA Immo International and position the company as an integrated real estate service provider.
Ambitious targets
We have adopted unambiguous targets for the current business year. The investment budget totals about € 1.5 bn, of which € 1 bn are earmarked for the core property portfolio of CA Immo International and € 500 m for the CA Immo New Europe property fund. Other special funds are expected to be launched in the near future.
As regards the types of use, the aim is to achieve a balanced mix: one-third office properties and the rest divided between retail and logistics on the one hand, and business hotels on the other. The majority of investments fall into the categories of forward purchases and own development projects. As of March 2007 the project pipeline encompasses a volume of more than € 2.2 bn. Of special interest to investors is the intention of CA Immo International to distribute a dividend for 2007, its first full year of business. The envisaged amount is 2% of the average net asset value in 2007.
Wholehearted commitment
The company‘s strong position on the market and vigorous growth from the outset originate from the concerted endeavours of our own team and the confidence of our investors. We therefore extend special thanks to our employees and to all the private and institutional backers who have invested in CA Immo International. Their confidence provides the inspiration for us to accelerate growth and devote all our efforts to shaping the company‘s success in the current business year.
Ing. Gerhard Engelsberger Dr. Bruno Ettenauer Mag. Wolfhard Fromwald