Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome, and thank you for joining the Immofinanz conference call on the results of the first half of 2022. Throughout today's conference, 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 telephone. Please press the star key followed by zero for operator assistance. It's my pleasure, and I would like now to turn the conference over to Immofinanz. Please go ahead.
Yeah. Good afternoon from Vienna. Vesna Saric speaking. Thanks for your time and for your interest. I think for many of you, it's the third conference call with an Austrian real estate company today. We will do our best to keep it short and very efficient. With me today is Katja Dörr, our Executive Board Member, as well as our former Board Members and now Advisors to the Board, Dietmar Reindl and Stefan Schönauer. Katja will guide you through the presentation, and afterwards, we will be happy to answer your questions. I will hand over to Radka.
Thank you, Vesna. Good afternoon, ladies and gentlemen. Welcome to our conference call on results for the first half of 2022. The operating environment was challenging. However, Immofinanz again generated some very good results. On page 3 of the presentation, you can see an overview of our portfolio highlights. Rental income was stable and high of roughly EUR 144 million. After an adjustment for a positive one-off effect in the previous year, increased by more than 4%. This effect will be explained later in detail. We also recorded strong growth in like-for-like rental income during the second quarter, with a growth of more than 7%. A cost saving supported an increase of 3% in the result of asset management to EUR 110 million. Our properties have a very high complete occupancy rate, and 94.3%.
In the retail business, we are fully rented to 98.5%. The value of our portfolio has grown to roughly EUR 5.4 billion and gross return equal to 6.4%. A look at our financial KPIs underscores our good performance. EBITDA improved by more than 6% to roughly EUR 79 million. Net profit was lower year on year as a whole due to non-recurring effects and a lower contribution from our equity accounting investment. Still a high EUR 162.7 million. The EPRA NTA per share rose by 1% to 99.9 EUR. We also strengthened our financial base during the past half year. This is still reflected by a strong increase in the net debt to assets ratio to 57.3%, and in a very conservative net loan-to-value ratio of 32.5%.
As you can see on page five, we improved our portfolio's sustainability footprint. A total of 18 STOP SHOPs in the Adriatic region successfully completed green certification. That means 53% of our standing investment portfolio is now certified green. Including our development projects, we have now already reached roughly 1 million square meters of green rentable space. That will continue to increase substantially as planned in our ESG strategy. We are currently preparing sustainability certification for 70 retail properties. On Top Living, our brand for sustainable and affordable apartments in all our STOP SHOPs was also a focus point of our work during the past six months, and pilot projects are already in progress in several countries.
The On Top Living showroom partner near our headquarters on the Wienerberg in Vienna, which you can see here on this photo, drew quite a lot of attention. It shows the advantages of wood construction of roughly 54 square meters of living space. Something else we are particularly proud of, at the upcoming UN Climate Change Conference in November, we have been invited as one of the only 45 companies in the world because of our sustainable On Top Living concept. As a part of our community program, we are continuing our support measures for people in Ukraine who have been affected by war, and we are working, among others, with the Red Cross. The continuous work on our portfolio with our tenants and communities is also reflected in our ESG rating.
The three-year review by Sustainalytics resulted in a further improvement and a low-risk classification. Now let us take a look at our P&L, starting on page seven. Rental income was stable year-over-year at roughly EUR 144 million. However, if you recall that in the previous year, that was positively influenced by a compensation payment of EUR 6.7 million for the reduction of space by tenants, you can see a very good growth of 4.2%. The results of asset management improved by 3% to EUR 110 million due to cost savings. The result of property sales totaled EUR -11.8 million and were negatively affected by write-off of purchase price receivable from Russia.
This EUR 12.9 million receivable originated from the sale of the Russian portfolio in 2017 and was scheduled for settlement in the first half of this year. However, the general environment and the payment restriction in Russia made the collection of this receivable unlikely, and therefore decided in favor of a full write-off. Immofinanz has no other receivables or obligations from the sale of the Russian portfolio and is currently evaluating all its legal options. The result of property development amounted to EUR -7.8 million and reflected an increase in the construction cost of individual projects. The results of operation amounted to EUR 56.3 million and were negatively influenced by one-off costs that occurred because of the change of control in Immofinanz.
These EUR 13.2 million non-recurrent effects consist primarily of consultancy fees related to takeover offers by CPIPG and S IMMO. The property revaluation on page eight of the presentation shows positive development. Hence also, we recognize revaluation of EUR 74.7 million on our standing investment, which represents roughly 1.5% of property value. Two-thirds of this increase were related to retail properties. Here we had positive effects from the STOP SHOP and VIVO! shopping centers above all due to the improvement in the retail environment. In our office businesses, the positive revaluations were related primarily to the office properties in Warsaw, Vienna and Prague. Financial results on the next slide were positive at EUR 68.8 million, but almost 25% lower than the previous year.
As to the main drivers, we saved nearly 3% in the net financing cost, which in the end amounted to EUR 39.8 million. Other financing reserves, financial results were positive at EUR 80.9 million, above all due to the positive evaluation of our interest rate derivatives. This demonstrates the effectiveness of our hedging strategy. The equity account investment results were EUR 27.4 million. That is significantly lower than in the previous year, whereby EUR 25.2 million can be estimated. The comparable amount from the first half of 2021 equals EUR 124.1 million, and above all reflected the substantial positive revaluation of our investment in S IMMO shares in 2021 due to the increased value of the share price. Earnings before tax amounted to roughly EUR 200 million.
Net profit reached a very good level of EUR 162.7 million, which represents earnings per share of EUR 1.2 compared with EUR 1.7 in the first half of the previous year. A look at our sustainable FFO1 from the standing investment business showed a nice increase of more than 6% to EUR 78.7 million. This amount includes a dividend of EUR 12.7 million from S IMMO. To improve comparability, we adjusted FFO from the first half of 2021 and included the dividend, which was originally paid in the fourth quarter 2021 and compared the value for the first half of the year. FFO1 per share equals EUR 0.58 and is slightly lower than in the previous year.
This decline resulted from the increase in the number of shares outstanding due to conversion of our convertible bonds to equity. Our next focal point is Immofinanz's robust financial structure and liquidity profile. Liquidity was lower in comparison with the year-end 2021 due to the repayment of corporate bonds. However, the cash on hand has remained at the solid level of EUR 381 million at the end of June. We have also a credit line of EUR 100 million at our disposal, which has not been used to date and is therefore available in full. With a net loan-to-value ratio of 32.5, our debt level is very conservative and even declined in comparison this year and in 2021. Financing costs remain low at 1.19%. Our remaining term of financing increased to 4.2 years.
Immofinanz has a high hedging quota, where 81% of all financing are hedged against interest rate fluctuations. I think it creates an important advantage in the current environment. With regard to our financing, we are well positioned with our investment grade rating. I would like to take you through now the outlook and explain the strategy update, which we recently adopted and published following the acquisition of majority stake by CPI Property Group in Immofinanz. Our objective is to drive growth. We have a successful and crisis-resistant urban store brand and safeguard our robust financing base. With a focus on the retail properties and light industrial office solutions, we intend to continue our expansion in the Immofinanz core countries. We want to further strengthen our ESG activities and benefit from synergies and close cooperation with CPI Property Group.
Looking at our financial policy, our solid financing structure and investment grade rating present an important base for acquisition and generating cash flows. In the current environment, which is characterized by rising interest rates and high inflation, we intend to focus on highly yielding retail and office properties. As a part of our active portfolio management, we therefore plan to sell properties with a value of approximately EUR 1 billion. Most of these properties will be low-yielding buildings and single-tenant buildings. We intend to reinvest the proceeds from these disposals in properties that further strengthen our brands or use these funds to repay debt. On the following slide is an overview of our plans for the individual brands. The fastest growth of STOP SHOP retail parks is going to grow from just over 100 at the present to 140 locations.
This will correspond to a retail area of about 1 million square meters and will further consolidate our position as a market leader in Europe. Our neighborhood shopping center plan will also be strengthened by acquisitions in regional shopping centers. This segment is attractive due to positive development of retail sales and visitors numbers. Year two, we aim to become the market leader of the medium term in SCE. In office sector, we will continue our premium growth course with myhive office solution. With our new co-supporting brand, On Top Living from the overbuilding of our retail parks, the sustainable and affordable apartments, we are addressing the most urgent needs of our time, climate protection and affordable housing. All in all, this is a portfolio of first-class and innovative brands which places us very close to our customers.
Our majority shareholder CPI Property Group is also convinced of the quality of our portfolio and our customer focus. We are already working together with CPI on several projects to further strengthen our position and benefit from synergy effects. We have agreed that CPI Property Group will provide asset management services to local companies in most of the countries. This optimization of local structure will increase the efficiency of our teams. We expect EBITDA before tax in the year 2022 to reach a good prior year level of approximately EUR 120 million. We have not yet decided on our dividend policy for 2022 financial year. The decision will depend on further market development, the timing of our acquisitions and disposals, and coordination with our majority shareholder. Ladies and gentlemen, as you can see, Immofinanz is very well positioned with its portfolio.
Our goal is to further expand our position and convince more and more tenants of the advantages of our innovative, flexible, and sustainable real estate concept. Now, we will be happy to answer your questions.
Ladies and gentlemen, at this time, we will begin the question-and-answer session. If you would like to ask a question, please press star followed by one on your telephone. If you wish to remove yourself from the question queue, you may press star followed by two. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. I repeat, to register for a question, please press star followed by one. We have the first question from Oliver Simkovic from RBI. Please go ahead. Sir, may we unmute your line? Mr. Simkovic? Now we can hear you.
Hello?
Yes.
Oh, perfect. Sorry about that. Two questions from my side. The first one on your FFO I guidance. You reached that goal of EUR 79 million in the first half. You're still guiding only EUR 120 million, which would imply the second half in terms of FFO I being worse than the second quarter. Could you maybe give me some insight into what you expect here for the second half and why this is so low?
Traditionally, we expect a higher maintenance and fit out in the second half of the year, so we stay on the conservative side.
Okay. Thank you very much. The second one is on the one-off in other operating expenses. You mentioned some digitalizations and costs relating to the CPI offer. Could you maybe split those EUR 13 million up into the two individual components? Also, with respect to the digitalizations, can you tell us more about the projects that have been done here and if there are also some other IT cost increases expected in the following quarters?
Hi, Oliver. Regina here. As you have mentioned, we had adjusted this over about EUR 13.2 million for this one-off effect. You can say about half of this amount is due to the CPI's takeover with regards to additional costs. I would say because it's the main part.
Okay. These IT projects, or digitalization projects, they are not going to show up again in the second half. Do I understand that correctly?
Digitalization is part, but it's a smaller part because a larger part of this increase is of course the effect of the supermajority in S IMMO.
Okay. Thank you very much.
This is also shown in personal expenses that you can see in our report. Personal expenses increased from EUR 11.4 million- EUR 16.9 million, as is shown on page 66 of our half-year report. The main part was at the exit of the support members.
Thank you very much. That's all from my side.
The next question is from Neeraj Kumar from Barclays. Please go ahead.
Hello. Thank you for taking my question. My first question is regarding your acquisition and disposal plans. If I understand correctly, you're planning to dispose assets around EUR 1 billion. Looking at current market conditions, how comfortable you feel about that, and what's the timeline around it? If that could be my first question.
Hello. [Micha] here. I think that we have, during the last year, shown a lot of expertise in selling properties, and I think we can use this very good track record we have in the market, even in times where it's maybe a bit more difficult because of, you know, the financing we see. We see that deals below EUR 100 million can be done faster. We have some here in Austria, some other countries. Deals below EUR 100 million will take a bit more time with a bit more discussion. The decisions are a bit more properly than in the past from investor side. I would say part of this can happen between this year and the second part will be 2023.
Okay, thank you. What about the acquisitions? Is there any magnitude decided over there, and what's the timeline?
I think the acquisitions, because they're our own decisions, I would say, can happen, things done this year. That's maybe more on the retail side, on the retail park side, where we have as well a very good experience in doing these deals with a fixed set of our consultants. They know the properties. They know the business. We know the business. That's why it might be a bit faster, which might hide. For office acquisition, I would say it might continue up to next year.
Got it. After these activities, where do you see your LTV, if there is any midterm target around that?
Target is still 40%.
Sorry?
The target is still 40%.
40%. Okay. Thank you. Thank you. That's all from my side.
Thank you.
There are no further questions at this time and I hand back to Immofinanz.
Yes, thank you very much. It was a very efficient talk. Thanks for your interest. If you have further questions in the next days, please don't hesitate to reach out to us in the IR department. I wish you a nice afternoon, and hope to hear from you at the latest for these pre-results at the end of November. Bye.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.