Financial expert analyzes: Adler Group SA reports an operating loss of 971 million euros

Financial expert analyzes: Adler Group SA reports an operating loss of 971 million euros

According to a report by finanzmarktwelt.de,

Adler Group SA has reported an operating loss of 971 million euros for the first nine months of 2023. This loss is mainly due to rising interest rates and the costs of the restructuring plan. Despite the sale of development projects and new apartments in Berlin, Adler's loan-to-value ratio rose to 89.1%, reflecting the slow completion of sales. The company has paid off €270 million in debt, but sales are progressing more slowly than expected. Efforts to restructure the company were made more difficult by the turnaround in the German real estate market, which is suffering from the end of the zero interest period.

The Adler Group faces the challenge of repaying debts amounting to 2.2 billion euros in 2025. To pay off this debt, the company plans to sell almost 6,800 apartments as well as its remaining 63% stake in Brack Capital Properties NV.

Due to the increasing interest burden, the Adler Group's FFO I indicator reported a negative sign of minus 7 million euros for the first time. The company's portfolio includes around 25,000 residential units, of which almost 18,000 are in Berlin. At its peak, the company owned around 70,000 apartments.

This development could lead to a further slowdown in the real estate market in Germany as the Adler Group is forced to sell a large number of residential units to pay off its debts. This selling pressure could lead to oversupply in the market and affect prices.

It remains to be seen how the Adler Group will develop in the coming years and how its sales activities will impact the real estate market as a whole.