HIS: 4Q17 results
Operating 4Q17 results in line with our estimates
Hotels segment continues benefiting from its exposure to the Canary Island, where ADR and RevPar increased by 7% in 2017. The office segment reached an occupancy rate of 87% in December 2017 (+100bp in 4Q17). Regarding the residential segment, average rentals increased by 15% to €12.0/sqm/month. The sales plan continued to progress, having sold 37 flats in 4Q17.
GAV increased by 18.4% LfL in 2017
The company reported a GAV of €2,475Mn as of December 2017, implying a LfL increase of 18.4% in 2017. Hispania’s NFD amounted to €651.8Mn at December 2017, implying a LTV of 26.3%.
Hispania provisioned an additional €39Mn of management incentive fees in 2H17
Although Hispania’s incentive fees depend only on the proceeds effectively distributed to the shareholders as cash flows, it has provisioned an additional €39Mn of incentive fees in 2H17, totaling €95Mn in 2017. Our valuation of Hispania includes a Management incentive fee of €119.7mn.
Dividend of €45Mn (0.41295/share)
Hispania has announced a dividend of €45Mn (€0.41295/share) payable in March 5th, 2018. It implies a 2.5% yield to the last closing price, but is lower than our estimate of €51.3Mn (or €0.47/share).
Our Hold recommendation is unchanged
Hispania is trading slightly above NAV (€15.93/share) and our target price of €15.70/share. We expect positive news from its divestments that may drive the share price. Our Hold recommendation is unchanged.
Hispania Activos Inmobiliarios SOCIMI SA, formerly Hispania Activos Inmobiliarios SA, is a Spain-based company primarily engaged in the operation of commercial real estate investment trust (REIT). The Company focuses on the acquisition, management and rental of commercial properties in Spain. The Company's activities are divided into five segments: Offices, which leases assets for business purposes; Residential, which provides residential units; Hotels, which rents hotel real estate; Hotels under management, which includes operation and development of hotels within concession agreement, and Other, which leases other real estate assets, such as logistics centers and shopping malls. The Company operates through a number of subsidiaries, such as Hispania Real SOCIMI SAU, Bay Hotels & Leisure SOCIMI SA and Eco Resort San Blas SLU.
Bankinter S.A. is a Spanish brokerage firm established in 1989. The company's line of business includes the provision of market research and trading services for Equity and Fixed Income products.
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