UBM Development AG's Preliminary FY 2023 Results: A Closer Look

UBM Development AG, as reported by NuWays AG, revealed their preliminary financial figures for FY 2023, which showed an EBT loss of €39m, falling below both NuWays' and consensus estimates due to higher-than-expected devaluations in their development and standing asset portfolio. These results reflect the impact of a challenging real estate market, highlighted by a drop in transaction volumes and notable bankruptcies within the sector. Despite these setbacks, UBM continues to maintain a solid balance sheet with €152m in cash and an equity ratio within the target range of 30-35%.

The company successfully sold its 33.5% stake in Palais Hansen to Wiener Städtische, leading to a net cash inflow of approximately €17m. Additionally, UBM acquired a 25% share in the Vienna-based "Central Hub" project, emphasizing their strategic investments despite market challenges. With a significant €2.3bn development pipeline and 75% planned in hybrid-timber construction aligning with EU taxonomy, UBM is positioned to leverage market opportunities for sustainable projects.

Despite these challenges, NuWays AG maintains a "BUY" recommendation for UBM Development AG with a target price of €28.00. This optimistic outlook is based primarily on UBM's robust balance sheet, strategic asset divestures, and a promising pipeline that could shield profitability against ongoing macroeconomic headwinds.