conwert announced write-downs for a total amount of 187 mn euros or 2.19 per share. Out of the 187 mn total write-downs, some 70 mn concern property write-downs and the remainder are write-downs mainly related to goodwill. The property write-downs represent 2.6% of the total portfolio.
As a result of the adjustments, Baader Bank's NAVps forecast for 2013E declines to 14.70 euros from 15.56 (9M12 reported undiluted EPRA NAV: 18.06 euros). The effect on the NAV calculation is more limited as the NAV calculation had already excluded the goodwill position of 114.8 mn euros, analysts say. Based on the new NAVps of 14.70 euros, the current discount to 2013E NAV is about 31%.
In Baader Bank's view, it is positive that conwert is cleaning up its balance sheet. The write-downs may facilitate the disposal of some non-core assets (i.e. located in CEE or commercial assets in general) which we would also regard as positive.
As the write-downs of the goodwill are driven by the fact that the company expects lower disposal volumes going forward, an increase of the recurring cash flow will become even more important in order to allow the company to pay a dividend. Baader Bank's rating ist Hold, the price target is 9.00 euros.