Annual Results as of 31 March 2025 / Successful Business Year 2024/25

Ad hoc announcement pursuant Article 53 LR - Züblin Immobilien Holding AG
Zurich, 15 May 2025

Financial year 2024/25 was a successful one for Züblin. Net rental income rose significantly as a result of new lettings, while lower interest rates had a positive impact on the revaluation of our properties and on financial expenses. Active property management will remain an important determinant of the company’s success in the new financial year.

Increased operating income

Target rents increased by 1.6% year-on-year to CHF 10.2 million (previous year: CHF 10.0 million). This was primarily attributable to the indexation of a high proportion of our rental contracts and the resulting adjustments to rents due to inflation. Successful new lettings and re-lettings, in particular the new letting of the first floor of the property in Berne from July 2024, reduced the vacancy rate by 24.7% to CHF 0.7 million (previous year CHF 0.9 million). The vacancy rate stood at 4.8% at the reporting date (previous year: 9.3%), a reduction of 48% or 4.5 percentage points. Rental income rose by 4.3% to CHF 9.4 million (previous year CHF 9.0 million).

The impairment of an outstanding rent receivable and associated legal costs led to an increase in property expenses. Excluding this one-off effect, property expenses would have declined by 13.6% year-on-year. Lower energy costs and higher expenses passed on to tenants led to lower heating and ancillary costs. Ongoing maintenance costs were at the previous year's level. Despite the aforementioned one-off effect from the writedown of outstanding rent receivables, the operating result increased by 2.1% to CHF 8.8 million (previous year CHF 8.6 million).

Administrative expenses increased by CHF 0.1 million due to higher investor relations costs (which are normally listing-related) as a result of the mandatory amendment of the Articles of Association and the associated legal advisory expenses. The slight increase in personnel expenses compared to the previous year was due to the changes in the Executive Board. Despite the one-off effect already mentioned (writedown of the outstanding rent receivable), EBITDA was unchanged from the previous year's level of CHF 6.3 million. Without the one-off effect, EBITDA would have been CHF 0.2 million higher.

The revaluation of the property portfolio led to a value increase of CHF 5.8 million, or 2.6% (previous year: downward correction of CHF 3.4 million, or 1.5%). This upward revaluation was driven mainly by lower interest rates and the associated reduction in the effective discount rate by 9 basis points across the whole portfolio. Despite this adjustment, net rental income yield remains at an attractive level of 3.9% (previous year: 3.9%). Financial expenses declined from CHF 1.6 million to CHF 1.3 million due to the reduction in interest rates. The average effective interest rate on mortgage debt was 1.4% at the balance sheet date (previous year: 3.1%). This debt is financed via a variable-rate secured credit facility linked to SARON with a remaining term of 4 years. Tax-deductible losses carried forward from previous years were used up in the 2024/25 financial year. As a result, part of this year’s annual profit is subject to income tax.

Overall, the company achieved a very satisfactory result in the financial year. Net profit totalled CHF 8.7 million (previous year CHF 1.3 million), which corresponds to CHF 2.62/share (previous year CHF 0.40/share). This increase is largely attributable to the high revaluations and lower financial expenses. After adjusting for valuation effects, EPRA earnings increased by CHF 0.3 million to CHF 4.3 million, which corresponds to an operating result (EPRA earnings per share) of CHF 1.29/share (previous year CHF 1.22/share), an increase of 6.1%. A slight improvement in the operating result is expected in the current financial year.

Low debt and secure long-term liquidity

Total balance sheet amounted to CHF 239.4 million as at 31 March 2025, compared with CHF 229.4 million in the previous year. The increase of CHF 10 million was due to the change in the market value of the property portfolio. The equity ratio remained almost unchanged at 59.3% (previous year 59.5%). Net asset value (NAV) per share was CHF 42.82; after the dividend payment of CHF 1.00 to shareholders in June 2024, this was slightly higher than the NAV of CHF 41.19 at 31 March 2024.

The property portfolio was valued at CHF 235.6 million at the end of the financial year, up from CHF 225.1 million in the previous year. Five of our six investment properties are still financed via a framework loan of CHF 100.0 million until 2029. At the balance sheet date, CHF 64.0 million of this credit line had been utilised, compared to CHF 63.0 million in the previous year. EPRA LTV, which is based on net liabilities, remained unchanged at 31.0%.

Continuation of dividend policy

EPRA earnings per share of CHF 1.29 enable Züblin to continue its stable dividend policy and allow shareholders to participate in the company's success. By distributing CHF 1.00 per registered share entitled to dividends. Züblin aims to ensure that sufficient funds remain in the company for property investments.
The Board of Directors will propose to the 2025 Annual General Meeting that a tax-free distribution of CHF 1.00 per registered share enitled to dividends be made from the statutory capital contribution reserves. Based on the share price at the balance sheet date, this corresponds to a tax-free distribution yield of 3.0%.

Outlook

Given US trade and tariff policy and the threat of trade conflicts, the economic outlook is clouded by significant uncertainties. If the US were to implement the high tariffs on imports from Switzerland, this would have far-reaching consequences for the Swiss economy and export-oriented companies as well as their suppliers and service providers. Almost all companies would likely be affected to a greater or lesser extent by second-round effects. The fiscal measures in Europe, on the other hand, are likely to have a positive impact.
In light of declining prime rates and financing costs, the property market has picked up and should maintain this positive momentum. With a relatively low vacancy rate compared to previous years and a low debt ratio, Züblin is in a good operational position to take advantage of potential buying opportunities in the coming financial year. We will continue to endeavour to reduce the vacancy rate further while increasing the quality of the portfolio through targeted investments.

 

* * * * * * *