TAG Immobilien’s shares fell after a drop in the valuation of the company’s portfolio due to higher interest rates dragged it into a net loss for last year.
At 1058 GMT, shares were 1.5% lower at EUR12.14, having fallen more than 4% earlier. The stock remains up nearly 80% compared with a year ago.
The German real estate company said its 2023 net loss amounted to 396.9 million euros ($433.7 million) compared with a profit of EUR113.1 million in 2022. The company attributed the loss to write-downs on the valuation of its German property portfolio linked to higher interest rates.
However, it posted a full-year increase in net rental income to EUR281.3 million, from EUR277.9 million in 2022.
Funds from operations–a closely watched industry metric–fell to EUR171.7 million from EUR189.4 million. Adjusted earnings before interest, taxes, depreciation and amortization for its rental business rose to EUR236.4 million from EUR233.5 million.
Analysts saw net rental income at EUR284.3 million, a net loss of EUR277.2 million, funds from operations at EUR172.5 million, according to consensus estimates compiled by Visible Alpha.
Despite results coming in below expectations, the company’s asset values seem to be stabilizing, Berenberg analyst Kai Klose said in a research note. The company’s portfolio saw a softening in the pace of devaluations to of 4.1% in the second half of 2023 from a 7.4% drop in the first, the analyst said.
“We think that this trend of portfolio values stabilizing is positive and is also likely to continue this year as TAG’s German rental apartments are very conservatively valued,” Klose said.
The company reiterated its 2024 outlook.