Swiss Finance & Property Investment AG – Solid financial year in 2018

Swiss Finance & Property Investment AG had a solid financial year in 2018. The operating result rose once more – a lower valuation impact resulted in a lower year-on-year profit. The Board of Directors is proposing an unchanged cash dividend from capital reserves of CHF 3.60 per listed share à CHF 12.60. This results in a dividend yield of 4.19% based on the share price as at 31 December 2018.

Annual results 2018

Swiss Finance & Property Investment AG (SIX Swiss Exchange: SFPN) ended the 2018 financial year with another increase in operating profit. Net profit excluding revaluation effects/deferred taxes rose by CHF 909 000 (+7.6%) year on year to CHF 12.9 million. This is mainly due to a property income of CHF 26.7 million that increased by CHF 3.3 million. However, significantly lower revaluation effects held back the rise in operating income after revaluation from CHF 38.6 million to CHF 39.3 million. Earnings before interest and tax (EBIT) fell accordingly from CHF 29.8 million to CHF 21.9 million and net profit declined from CHF 19.3 million to CHF 13.4 million (-30.6%). Earnings per share excluding revaluation effects stood at CHF 3.83 (prior year: CHF 3.97), equity (NAV) per listed share as at 31 December 2018 was CHF 95.65 (prior year: CHF 95.10) and EPRA NAV was CHF 111.35 (prior year: CHF 110.43).

Real estate portfolio

The strategic focus on prime locations in Zurich and Basel continued throughout the 2018 financial year. After two purchases in the regions of Basel and Zurich and the revaluation effects, the value of the portfolio increased by CHF 40.2 million (6.6%) to CHF 645.3 million as at 31 December 2018. The vacancy rate as at 31 December 2018 had increased slightly to 3.84% but is still low (prior year: 1.66%).

Current projects

In the 2018 financial year, the main focus was on expanding the lettable spaces at Walzwerk Münchenstein and planning the Riehen development project. The latter was acquired after the balance sheet date due to building approval being obtained. Three apartments at the Residenza Parco d'Oro promotion project in Ascona were sold in 2018, which means that one is still remaining. The planning application will be made in spring 2019 for the Elsässerstr. 1+3 promotion project in Basel.

Solid financing

The company is robustly financed with an equity ratio of 47.2% (prior year: 49.3%). The average interest rate including swaps on interest-bearing loans was 1.86% (prior year: 1.75%). The average fixed interest period was 7.93 years (prior year: 8.11 years).

Outlook 2019

The management is well aware of the challenging environment and is dealing with this situation with a strategy of stronger consolidation, whilst simultaneously whilst cautiously expanding existing potential. Given low interest rates, strong institutional demand for investment properties is still expected. Based on a careful assessment of the risks and opportunities, the Board of Directors and management are again expecting a convincing result for 2019 that will sustain the current attractive and stable dividend policy.

Proposals for the Annual General Meeting on 10 April 2019

The Board of Directors is proposing a dividend distribution of CHF 3.60 from capital reserves per registered share à CHF 12.60 nominal, and of CHF 0.72 per registered share à CHF 2.52 nominal. This results in a dividend yield of 4.19% for the registered shares à CHF 12.60 nominal listed on the SIX Swiss Exchange based on the share price as at 31 December 2018.

The Board of Directors is also proposing the election of Mr Andreas Hämmerli, architect, Dipl. HTL, as a new board member in addition to the current members. Mr. Hämmerli was responsible for development in the Mobimo management for ten years. Furthermore, the BoD will propose at the Annual General Meeting to elect Mr. Alexander Vögele as Chairman of the Board of Directors. Dr. Hans-Peter Bauer, the current Chairman of the Board of Directors, will remain a board member. The BoD is also proposing to rename the company as "SF Urban Properties AG". The change of name is consistent with the vehicle's investment strategy and distinguishes it more clearly from the asset manager Swiss Finance & Property AG.

The Board of Directors would like to thank Chairman Hans-Peter Bauer and the CEO until the end of August 2018, Thomas Prajer, for their hard work and dedication, and wishes them all the best for the future.

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