Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the Corestate Q3 2022 Results Conference Call and Webcast. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touch-tone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Dr. Kai Klinger. Please go ahead.
Ladies and gentlemen, thank you for joining us today on our earnings call for the presentation of our financial results for the first nine months of 2020. I hope that the postponement of our call originally 11:00 A.M. to 2:00 P.M. did not cause you any problems. On the Corestate Investor Relations website, you'll find the press release, the interim financial statement, and the corresponding slide deck. As usual, I'd like to draw your attention to the forward-looking statement and disclaimer wording on page two of our presentation. This safe harbor language applies to the presentation and all comments we'll be making today. I would also like to mention that everything is being recorded. You can replay the call and view the transcript on our investor relations website a few hours after the call.
With me on the call are the CEO of Corestate Capital Group, Stavros Efremidis, and our CFO, Udo Giegerich. I would like to start to guide you through the presentation, followed by the usual Q&A session. The timeframe for today's call is about 30 minutes. Now it's my pleasure to hand over to the CEO of Corestate, Stavros. The floor is yours.
Thank you, Kai, and good morning, ladies and gentlemen, and welcome from my side. There is a lot going on, not just at Corestate, but all over the world, both economically and politically. First things first. Please allow me to start by giving you an overview on the ongoing financial restructuring process at the past timeline. In May 2022, Corestate initiated the preparation of alternative measures to address the refinancing topics of the expiring notes and started one month later an extensive due diligence process with the financial and legal advisors of a group of major note holders with the objective in achieving a successful financial restructuring solution. This creditor group controls almost 50% of the convertible bond and close to 80% of the 2023 notes.
Following the presentation of a company proposal at the beginning of July, the noteholder group, together with its advisors, submitted several counter proposals to Corestate. Later, mid-October, certain members of the noteholder group entered into a confidential agreement with Corestate. Furthermore, also mid-October, the advisors of the bondholder group provided an updated proposal to Corestate, which contains conditions for an amendment of the bonds. Around the same time, a group of certain potential equity investors provided the company with binding equity commitment letters, which also included terms for an amendment of the notes. Both proposals from the noteholder group and from the equity investors group are not compatible. Even though on balance, they are not that far apart commercially. Main difference were the essential terms of the fresh money, the allocation of equity upside and governance.
To create the necessary preconditions for a financial restructuring on the capital side and to be flexibly positioned for various measures Corestate has invited to an EGM on 22 November this year to increase the authorized capital by 200 million new shares and to amend the articles of association. On the basis of the existing business proposals and the authorization resolution, an alternative decision on the restructuring of the two bonds and those on the continuation of Corestate is to be made at the bondholders meeting on 20 November this year. The corresponding resolution proposals and documents for the meeting are available on our website.
Now the proposal are on the table, and we continue to support the involved parties in their discussions towards potential agreement in order to be ready for noteholder meeting based on a joint proposal for a resolution before maturity of the convertible bond. As we have already stated several times, the most important and urgent goal this year is to restructure the outstanding refinancing. We are pursuing the goal in the best interest of the company to ensure the continuity of the group and to give our clients and our employees a solid and reliable future perspective. Now we are approaching the final round of discussion with the bond holder representatives and their consultants. Therefore, please understand that we are not able to provide you with further information on the status of these ongoing discussions in our Q&A session.
Once there are updates that can be shared with the capital markets, further information will be provided via the usual channels. Please follow me now on page four. The economic conditions have continued to deteriorate over the last few months. In the real estate sector, the central bank's interest rates increases and the fallout from Russia's war in Ukraine have severely shaken many of the pillars that ensured stability up to now. The real estate super cycle that had lasted more than a decade has ended abruptly. We are facing an extremely demanding situation at the moment. There have been critical impacts on the overall global investment market. Moreover, transaction volumes weakened further overall. The market is now experiencing a perfect storm. Taking these general conditions into account, Corestate showed a very subdued business course in the first nine months of 2022, as expected.
As a result from company specific reasons, the management had to adjust the goodwill and certain balance sheet positions in the third quarter again. All in all, this has an enormous impact on our interim statements. Our CFO will go into this in more details later. Nevertheless, we continue to pursue our strategy by focusing on our core business and preparing the company for a comprehensive restart. We are already well on track with our organizational restructuring measures and ongoing extended offensive program. A key objective in the context of the transformation of the group is also focusing the business model on core real estate activities to sharpen our profile in the market. Two, one of the strategic decisions was to divest a large part of the personnel intensive and low margin property management business by selling Capera and to dispose the non-core asset management.
At the end of the reporting period of 2022, assets under management in our core business decreased to EUR 17.3 billion due to the absence of some institutional clients. In comparison, these figures was EUR 20 billion at the end of 2021. The changes of the central bank side mean nothing less than a comprehensive and deep adjustment process for the real estate industry. Assets valuation is already and will be hit quite hard by the current market recession. In our special situation, the negative development is intensified by the value adjustment and risk provisions made, as well as the open refinancing issue and the resulting increased uncertainty on the corporate side. Naturally, we are experiencing a certain degree of reluctance with our clients towards new business. Please flip to page five.
In the light of the stormy market situation, risk aversion on institutional clients went up significantly, and the transaction volume fell sharply across the industry. However, during the first nine months, 2022, we have completed, on behalf of our clients, several transactions and investments. This brings us to a total amount of assets under management in our real estate equity core business and currently 13.2 billion euros. The main reason of the reduction was on the one hand, the disposal of some smaller commercial and micro living portfolios. On the other hand, due to the loss of three asset management contracts, what happened in the third quarter. Within our assets under management universe, we have an unchanged focus on specific asset classes like office and student accommodations, micro living, closely followed by retail and residential assets.
This also speaks to the fact that our property management specialist for student housing in the U.K., CRM, which was previously held for sale, is now considered as part of the core business going forward. Please go to page six. One of Corestate's most significant events in the debt segment is a discontinuation of business with the Stratos funds. Beyond the challenging market situation, the decisive factor for the decision was that the redemption of unit certificates was suspended. In this context, distributions and payments by the fund manager were also discontinued. Later on, a comprehensive restructuring of the Stratos funds was agreed between the responsible fund manager and the investors. Therefore, our subsidiary, HFS, will probably cease to act as investment advisor for the debt fund of the Stratos family by next year at the latest.
In the light of the major financial significance of the funds of HFS short- to mid-term business prospects, this substantially led to a strategic reassessment. In addition, the resulting lack of earnings prospects meant that Corestate had to adjust the corresponding balance sheet items, in particular, had to impair the entire goodwill of HFS. Amid market volatility and high inflation, lenders are now increasingly focused on mitigating risk. This has led to a shift in the markets which, combined with a rise in key interest rates, has significantly increased the cost of debt for borrowers. The more than double financing cost also caused many investors reevaluation in ongoing bidding processes and reducing their willingness to pay. This causes delays and many properties or development projects were taken off the market again.
That is exactly what we have seen in the last month, a very weak transaction environment and a sharp decline in our debt restructuring and financial business at the Corestate Bank. Furthermore, we decided, in view of the significant worsening in the macroeconomic environment, to adjust the goodwill of Corestate Bank as well. I'm also convinced that our debt advisory business at Corestate Bank will recover once the backlog in the transaction market has cleared. In times of rising interest rates, there is a clear need for a bank-independent financing solution. Here we can offer a unique value chain and track record. With this, I would like to hand over to Udo Giegerich.
Many thanks, Stavros, and a warm welcome to all of you also from my side. Firstly, I'd like to give you information on our income lines. As my colleagues has already pointed out, economic conditions in the real estate market deteriorated increasingly since the end of last year. The real estate sector has already been noticeably affected by this and shows significantly lower transaction volumes. Combined with our company's specific issues, this is a weighing on our new business and leading to lower earnings, especially from acquisition and performance-related fees. For this reason, Corestate recorded a very subdued business course in the first nine months of 2022. Including the revenue from real estate equity segment, from real estate debt segment, and the income from other segments at around EUR 50 million.
Aggregate revenues and gains from continued new operations in the reporting period were significantly below the previous year's figures of EUR 157 million. Let us take a deeper look into the individual top line development of the different reporting line segments. The real estate equity segment generated revenues of EUR 44 million. This means roughly EUR 50 million below the previous year, in particular, due to the lack of transaction business. For the same reason, revenue from sales and promote fees realized decreased from EUR 12.4 million to EUR 0.7 million, and the acquisition fees in this segment went down from EUR 6.5 million to EUR 2.2 million. Revenue from asset management proved to be a relatively stable component. These fees went down slightly to EUR 24.4 million from EUR 26.7 million in the previous year.
Revenues from property management increased from EUR 11.7 million to EUR 14.7 million, mirroring, of course, higher occupancy rates and increased assets under management, especially for our student housing specialist, CRM in U.K. Revenue from development fees were stable at EUR 1.9 million. The total income in the debt segment went down considerably by 78% to EUR 20 million from EUR 91.7 million last year. The underwriting and structuring fees, together with the income from trading activities, were rather weak and fell from EUR 31 million to EUR 3.6 million, characterized strongly by project cancellations and a very weak private debt market in 2022. Driven by the suspension of dividends and payments of the Stratos II fund, no performance fee could be recognized in the current reporting period.
In the last year, we still generated EUR 34 million performance fee. Income from bridge loans decreased from EUR 14.2 million to EUR 5.4 million, primarily due to the maintained and increased risk provisioning. Revenues from asset management were almost stable at EUR 11 million, thereby mirroring the slightly reduced fund volumes. Last but not least, the other segment generated an income of EUR -14.3 million coming from EUR 5.8 million in the last year. This was mainly caused by higher losses from fair value measurements in an amount of almost EUR 90 million due to the value adjustments in the Stratos funds. Moving on to slide eight, please.
With this chart, we would like to give you a little more background on our P&L figures for the first nine months, 2022. All in all, we had OpEx of EUR 158 million, up from EUR 75 million in the previous year. This development was strongly characterized by one-time expenses and risk provisions, such as the write-down on the bridge loans and the value adjustment of contract assets totaling EUR 100 million. All costs were digested directly in the operating lines. The G&A expenses are rather flattish, with EUR 38 million in comparison with the prior year's figures. Despite the several measures from the efficiency program already realized, we expect the first cost effects will be seen maybe end of the year.
Nevertheless, the absolute number of full-time employees decreased already from 811 at the end of last year, to 446 at the end of the third quarter. This development was mainly driven by the disposal of Capera in June. Irrespective of Capera, we have already reduced our remaining staff by around 20% at the end of September. As we already explained in the past presentation, the main focus in the coming months will remain on significantly improving the overall cost structure by reducing complexity, avoiding duplicate functions in the organization, and consistently cutting costs at all levels and in all areas. In summary, this led to a group EBITDA from continued operations of EUR -108.3 million in the reporting period, compared to EUR 53.4 million in 2021.
This development was despite the substantial one-time charges, chiefly attributable to the clearly lower fee volume, despite the yet to be adjusted cost structure across all segments. Depreciation and amortization went up significantly to EUR 459 million from EUR 23 million, mainly driven by complete impairment of the goodwill at HFS and the partial impairment of Corestate Bank due to the changed income expectations. Furthermore, this position also includes a small amount from depreciation and impairment of intangible assets recognized business combination. Our reported net profit from continued operations for the first nine months 2022 stood at EUR 582 million. Taking into account the one-time charges, the PPA effects and the deferred tax liabilities, the corresponding adjusted net profit from continued operations amounting to EUR -137 million.
I would just like to mention this for reason of completeness. Earnings per share after the first three quarters of 2022 are EUR -17 . EPS in the comparable period last year stood at EUR 0.14 . Please flip to the next page. On page nine, I would like to flag some balance sheet items and their development in the relevant period of 2022. The most significant changes in our balance sheet as of end of September 2022 occurred in the position goodwill and other intangible assets, mainly driven by the impairments in our debt business. Goodwill dropped from EUR 496 million last year to EUR 99 million, and the intangible assets decreased to EUR 29 million from EUR 86 million. Cash and cash equivalents amounted to EUR 40 million, down from EUR 65 million in December 2021.
Against the backdrop of the negative earnings development and one-time effects, total equity decreased drastically from EUR 626 million in 2021 to EUR 43 million at the end of the reporting period. The group's EBIT equity ratio thus fell to roughly 6% compared with 44% on December 31st, 2021. In this context, please be aware as a result of further potential risk provisioning and/or adjustment of the book values, a negative equity at the end of the year cannot be completely ruled out. Our financial liabilities totaled EUR 612 million as of September 30, 2022, after EUR 622 million in 2021.
With this net financial debt, including cash and cash equivalents, as well as restricted cash and adjusted for lease liabilities, were slightly up at EUR 556 million from EUR 527 million. This, the increase mainly results from the temporary acquisition of an office building project in Augsburg, which is expected to be placed in the next couple of months. We will continue to work on monetizing balance sheet assets, but we are also struggling with these market conditions. Therefore, to safeguard the operating business over the coming quarters and to enable real estate equity transactions as well as opportunistic deals in the near future, there is a clear need of fresh money. As you have already heard before, this aspect is reflected in both restructuring proposals.
In a nutshell, the nine months figures are overshadowed by major one-off effects, such as an extensive risk provisioning, unavoidable impairments, and the substantial valuation adjustments in the key balance sheet items. These measures were indispensable and driven by the market turmoil as well as the company's specific problems in the last months, and have thus significantly changed the operational growth perspective.
With this, I would like to thank you for your attention and please skip to page 10. Stavros, turn to you.
Many thanks. Beyond the bond restructuring and securing liquidity, the top priority is to stabilize our operations by reassuring our employees and clients by remaining convinced of the business model and the future potential of Corestate. In parallel, we are working flat out on our cost cutting measures to adapt the company to the current needs of the business. To this end, we have already bundled operating areas to thematically reduce double function and overheads. We are also in the process of closing offices and consistently reviewing all non-personnel costs and other expenses. On the earnings side, the savings will already be evident at the latest by the end of the year and will then be fully reflected in the coming year.
The aim is to implement a structural adjustment of the group to make an efficient and effective investment house with existing focus on real estate equity and real estate debt. After the agreement on a solution of the pending financing issue, we can start further measures to secure the future of our company. For example, we want to initiate a comprehensive rebranding of Corestate and carry out repositioning of the group. With a robust and adjusted strategy, we will again be able to strengthen our own competitiveness and regain the necessary trust of clients and investors. Corestate continues to find itself in a perfect storm. In view of the dynamic market environment and the demanding situation on the corporate side, we are challenged every day. Therefore, it is important that we set the right course now so that the company can once again operate successfully in the future.
To make such a new start possible, we have rigorously revised and adjusted numerous risk positions in our balance sheet. We are now working with a high pressure to find a solid solution for our restructuring and to implement our strategic agenda. I'm highly motivated and committed to achieve these important targets together with my colleagues on the management and supervisory board. With this outcome, I would like to hand back to the operator. We are all now ready to answer your questions. Thank you.
Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question is from the line of Peter Bergmann from Independent Bond Research. Please go ahead.
Yeah, thank you very much for taking my questions. I've got three, actually. The first question would be: why was the goodwill of HFS fully written off in Q3 when according to the business plan of the published cleansing document, it still estimates the future P&L?
Maybe Udo, would you take this question?
Yes. Maybe. Yeah. The agreement with HANSAINVEST was done after the completing of the business plan. Therefore, firstly, we will stop the old private debt business in HFS with end of this year for the funds. We will plan to restart a new business latest from 2024 onwards. In the business plan, basically the termination of the Stratos funds was planned, terminating over the next three years. Therefore, there is a discrepancy between the business plan and the current situation.
Okay, thank you for that. The second question from my side would be: can you confirm media reports that in the course of the bond restructuring, that highly confidential internal company information was passed on to third parties by members of the board of management without authorization? Thank you.
It's Kai. I'm sorry, but this would be an internal matter. Of course, we do not comment on any press articles or speculations, so I'm sorry.
Yeah, sure. That's understood. My final question. Thanks for that. Do you know whether individual members of the board of management, in particular the CFO, have received assurances from note holders that they will continue to work for the company while retaining their individual remuneration if they support the note holder's proposal? Thanks.
Again, we can't comment on speculation and market rumors, like that. Udo, do you want to add anything?
No. Nothing to add on this.
Thank you. Thank you for your questions.
Thank you.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star followed by one on your telephone. So far, we have no further questions, and I hand back to Dr. Klinger for closing comments.
Thank you so much for listening. We appreciate your interest. Do not hesitate to contact us if you have further questions. I would like to repeat that you will find the document for the EGM and the bondholder meetings on our homepage under the section shareholders. Once again, thank you. We look forward to speak to you soon. Take care and stay healthy. Bye-bye.
Ladies and gentlemen, the conference is now concluded and you may disconnect. Thank you for joining and have a pleasant day. Goodbye.