Original-Research: Warimpex Finanz- und Beteiligungs AG - from East Value Research GmbH
Classification of East Value Research GmbH to Warimpex Finanz- und Beteiligungs AG
Company Name: Warimpex Finanz- und Beteiligungs AG ISIN: AT0000827209
Reason for the research: Update
from: 06.06.2024
Target price: EUR 1.58
Target price on sight of: 12-Monaten
Last rating change:
Analyst: Adrian Kowollik
Despite strong Hotel business, where the average occupancy rate is developing well, Warimpex’ (WXF) Q1/24 results were weak. The reason was a 9.3% decline in the Investment properties segment, which we believe stemmed from two factors that will likely persist in Q2-Q4 2024: 1. A weak rouble FX rate, and 2. Increasing problems with Russian tenants such as Gazprom that seek to reduce office space and rent. As we wrote in previous reports on WXF, Russia – which still accounts for >60% of the company’s total turnover and 35% of its Gross Asset Value – is the biggest risk from investors’ perspective and the reason for the high discount to NAV. Based on our lower estimates for 2024E-2026E and lower peer-group-based fair value (EUR 1.44 vs. EUR 2.66 before), we have determined a new 12-months PT (50% NNNAV that we have additionally discounted by 50% due to the exposure to Russia, 50% peer group) for Warimpex of EUR 1.58 (previously: EUR 2.23).
In Q1/24, the main factors affecting Warimpex’ results included: 1. Higher occupancy rates in the Hotels segment 2. Weaker Russian rouble 3. Higher operating costs and 4. Provisions for trade receivables, in our view relating to Russian clients. Total turnover equalled EUR 12.1m (-6.3% y-o-y) and EBITDA, EBIT and net income were 32.2%-161.3% below last year. Like in Q1/23, there were no asset sales. At the end of March 2024, WXF had net debt of EUR 212.5m (31/12/23: EUR 210.3m, 31/03/23: EUR 218.1m).
While the Chopin co-living/office building in Cracow and the MC55 in Bialystok have already received the building permits, we still expect that they will only be completed in 2027E as WXF makes the start of construction dependent on market conditions. In April 2024, Warimpex received the BREEAM certificate for the 4th building: the Red Tower in Lodz. This shows that sustainability and conformity with EU Taxonomy are clearly in the management’s focus.
You can download the research here:
http://www.more-ir.de/d/29983.pdf
For additional information visit our website
https://eastvalueresearch.com/.
Contact for questions
Adrian Kowollik
Email: ak@eastvalueresearch.com
Tel. +49 30 20609082
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