Cofinimmo will publish its 1Q13 results on Thursday 2 May before market.
We expect net rental income to drop y/y from € 63.7m to € 54.2m. Despite the lacking one-off indemnity payment of € 11.2m and the negative impact of the renegotiated North Galaxy contract, we however expect an increase in rental income driven by the delivered Police station, expansion in the healthcare segment and increased occupancy of the office building in Antwerp. Furthermore, we bank on a slight amelioration of the property related costs and charges, leading to an operating margin of 84% or an operating result before result on portfolio of € 45.5m vs. € 53.2m in 1Q12.
The non-cash impact (IAS40 & IAS39) is estimated to be positive. We assume a positive portfolio revaluation, while interest rates have remained broadly stable leading us to expect only a marginal change in Fair Value of the financial instruments. As a result, we bank on financial result (excl. IAS39) in-line with 4Q12 or € -16m, up 10% y/y (€ -15.3m in 1Q12).
Taking into account stable minorities and higher taxes, we expect a drop in net result from € 35.3m in 1Q12 to € 27.9m in 1Q13 or a net current result decline from € 37.4m in 1Q12 to € 27.1m in 1Q13. This result corresponds to a net current EPS of (weighted average number of shares over 1Q13): € 1.69 vs. € 1.74 in 1Q12 (excl. one-off).
Except for the refinancing of two credit lines (already mentioned with the FY12 figures) and the € 86.6m capital strengthening end of March, which we elaborately discussed in previous MN contributions, 1Q13 has been a really quiet period for Cofinimmo. We therefore look forward to the announcement of new acquisitions in healthcare in 2Q13.
We rate the stock Accumulate and reiterate our € 97 TP.