Corestate with weaker business development in the first half of 2022 - non-recurring items weigh on results

Corestate with weaker business development in the first half of 2022 - non-recurring items weigh on results

• Group revenue of € 23 million significantly below previous year due to decline in real estate debt business
• EBITDA of € -125 million and adjusted net profit of € -151 million strongly impacted by one-off operating effects, impairments and risk provisioning
• Ongoing cost and efficiency program intensified
• Securing sustained liquidity and restructuring of the two bonds have top priority

Luxembourg, 9. August 2022 – Corestate Capital Group (Corestate) reports results for the first half of 2022. In the core business, Real Estate Equity and Real Estate Debt, the assets under management amount to € 15.8 billion as of June 30, 2022 (2021: € 17.2 billion). On the income side, total revenue from continued operations declined in the first half of 2022 to € 22.9 million (previous year: € 98.3 million). The noticeable macro-economic uncertainty in conjunction with the interest rate and inflation dynamics led to a slump in transaction volumes in the real estate sector in recent months. As a result, in the Real Estate Debt segment the Group recorded a sharp decline in income from structuring and financing advisory services. In addition, due to the recently initiated restructuring of the Stratos II fund, which is economically significant for the Corestate subsidiary Helvetic Financial Services (HFS), a considerable portion of the performance fees has been ceased. Accordingly, segment revenues in the Debt segment amount to € 13.1 million (previous year: € 68.5 million). Revenue in the Real Estate Equity segment, on the other hand, is proving relatively stable at € 24.1 million (previous year: € 26.7 million).

In the first half of 2022, EBITDA from continued operations amounted to € -125.4 million, compared with € 35.7 million in the previous year. This development is mainly attributable to non-recurring expenses for risk provisions and value adjustments on bridge loans, performance fees and real estate projects. Taking into account all expenditures, including the exceptional impairment of goodwill and intangible assets at HFS and Corestate Bank, the Group posted earnings after taxes from continued operations of € -521.8 million (previous year: € 3.2 million). Adjusted for non-recurring effects from depreciation and amortization as well as deferred taxes, net profit from continued operations amounted to € -150.5 million (previous year: € 17.2 million).

Against this background, the Management Board has once again intensified the cost-cutting measures already initiated. The declared aim is to achieve a structural transformation of the Group into an efficient and effective investment house with the existing focus on real estate equity and debt business by the end of the year. To this end, operating units will be bundled, duplicate functions and overheads systematically reduced, offices closed and all non-personnel costs and other expenses fundamentally reviewed.

Beyond the operational and market challenges, securing liquidity and reducing the Group's debt are top priorities. At the end of the first half of the year, the Group's net financial debt amounted to € 553.1 million (2021: € 526.5 million), while cash and cash equivalents stood at € 61.0 million (2021: € 62.8 million). With regard to the two bonds maturing in the short term - a convertible bond in the amount of € 188 million (November 2022) and a senior bond in the amount of € 300 million (April 2023) - the Management Board mandated specialized advisors in the second quarter to explore and advance a viable alternative refinancing solution jointly with a group of major noteholders. The Management Board will continue to consistently pursue the steps already initiated to optimize the capital structure and free up liquidity.

The half-year report is available on the company's website:
https://corestate-capital.com/en/aktionaere/publications/

Key Figures¹

Press and Investor Relations Contact

Thomas Fritsche

T: +49 69 3535630-106 / M: +49 162 1036025
ir@corestate-capital.com

About Corestate Capital Holding S.A. (Corestate)

Corestate is an investment manager and co-investor with around € 16 billion in assets under management in the core business. The company sees itself as a manager for the entire length of the real estate value chain. Thanks to its fully integrated real estate platform, it is able to offer investors a wide range of services, especially the opportunity to invest in large-scale societal trends such as urbanization, demographic shifts or sustainability – trends that will continue to have a decisive influence on the living and working environment in the long term. The consistent focus on asset classes that will be successful in the long run constitutes a central cornerstone of the company strategy. At Corestate, all concepts are supported with ESG expertise that is unique to the industry. With more than 500 experts, Corestate offers clients and investors a full range of services and consultation from a single source, from project financing and real estate management to sales. Corestate is listed on the Frankfurt Stock Exchange and operates as a respected business partner for institutional and semi-institutional investors as well as high-net-worth private investors in 11 countries across Europe, with offices in Luxembourg, Frankfurt, Vienna, Zurich, Paris, Madrid and London. Please visit www.corestate-capital.com for further information.

Forward-looking statement

This press release may contain certain forward-looking statements based on current assumptions and forecasts made by our management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial position, development or performance of the Company and the estimates given here. These factors include those described in published reports. These reports are available on our website www.corestate-capital.com. The Company assumes no obligation whatsoever to update these forward-looking statements or to conform them to future events or developments. No inappropriate significance should be attached to forward-looking statements, which apply only to the date of this communication.