Amid a Challenging Market Environment, Vonovia, One of Germany's Leading Residential Real Estate Groups, Presents Its Annual Financial Statements. While the Operational Business Registers Satisfactory Figures, a Multi-Billion Portfolio Revaluation Impacts Negatively on the Books. This Resulted in a Record High Post-Tax Loss of Approximately 6.8 Billion Euros in 2023 - a Significant Deterioration Compared to the Previous Year's Deficit of 669 Million Euros.
Main Cause for This Dramatic Development Is the Valuation of Real Estate Held as Investment Properties, Which Records a Loss of 10.65 Billion Euros - a Sharp Increase Compared to the Previous Year, Which Only Reported a Loss of 1.18 Billion Euros. The DAX-Listed Company Attributes This to a "Record Valuation Loss" Resulting from Accounting According to the IAS 40 Standard, as Explained by CEO Rolf Buch in a Hastily Called Media Conference Call. This "Pure Valuation Issue" Is a Phenomenon Affecting the Entire Real Estate Industry, Primarily Due to the Increased Level of Interest Rates.
Operational Results: Vonovia Achieved around 1.8 Billion Euros Last Year, a Decrease Compared to the Approximate 2 Billion Euros of the Previous Year. The Company's Dividend Policy is Being Adjusted: From 2024 Onwards, the Dividend Proposal Will No Longer Be Tied to the Group FFO after Third Parties, but to the Adjusted Pre-Tax Result (adj. EBT) Plus Excess Liquidity from the Operating Free Cash Flow (OFCF). Nevertheless, a Slightly Increased Dividend of 0.90 Euros per Share is Planned for 2023.
Despite Negative Trend, Vonovia Reaffirms Growth Ambitions. The Company Aims to Increase Adjusted EBITDA to 2.55 to 2.65 Billion Euros This Year. Significant Focus is on Investment in Photovoltaics for Power Generation and Planned Portfolio Sales Worth Approximately 3 Billion Euros. CEO Rolf Buch Assures No Capital Increase is Planned and Expects the LTV Debt Ratio to Return to the Target Range of 40 to 45 Percent by the End of the Year.
The challenges faced by Vonovia and the entire real estate industry are reflected in recent market reactions. Vonovia's stock experienced a temporary decline of 6.38 percent to 25.11 euros in XETRA trading. This illustrates the market's sensitivity to the combination of operational performance, strategic decisions, and external economic factors such as interest rates and market conditions.
