IMMOEAST Annual Report 2006/07

230 IMMOEAST Annual Report 2006/07
IAS 24.12
Changes in interest rates have an influence on the valuation of property. As part of the discounted cash flow method
(DCF) that is used to value office and commercial properties, the present value of future cash flows from a property
is determined by discounting these amounts based on the applicable interest rate. This interest rate is generally comprised
of a risk-free basic interest rate and a risk premium that reflects the property category and sub-market. Rising
interest rates lead to an increase in the risk-free basic interest rate, and thereby result in a higher discount factor. This
reduces the present value of cash flows and, in turn, reduces the fair value of the property.
The risk associated with changes in interest rates is determined by sensitivity analyses. A sensitivity analysis presents
the effects of changes in market interest rates on interest payments, interest income and expense, other components of
earnings and, possibly, also on equity. The following sensitivity analysis shows the influence of variable market interest
rates on the interest expense associated with financial liabilities. This analysis presents the impact of an assumed average
increase/decrease of 30, 75 and 135 basis points in interest rates on interest expense recognised during 2006/07:
Interest expense Interest rate scenarios
All amounts in TEUR 2006/2007 +/- 0.30% +/- 0.75% +/- 1.35%
Increase in variable interest rate -45,017.8 -45,150.9 -45,350.6 -45,616.9
Decrease in variable interest rate -45,017.8 -44,884.7 -44,685.0 -44,418.8
8.1.2.2.3 Other price risks
As an international company, IMMOEAST is also exposed to price risks. Price risks are understood to mean the
possible fluctuation in fair value or future cash flows as a result of changes in market prices.
IMMOEAST would be exposed to price risk if the development of the property market in a region leads to increasing
yields and property acquisitions were concluded at fixed yields that are below these market figures.
8.2 Earnings per share
In accordance with IAS 33, earnings per share are calculated
by dividing net profit for the period by the weighted
average number of issued shares.
Diluted earnings per share are not reported separately
because the company has no potential diluting shares of
common stock.
8.3 Information on the company
The members of the Executive Board and Supervisory Board of IMMOEAST AG are as follows:
Executive Board
Karl Petrikovics – Chairman
Norbert Gertner – Member
Christian Thornton – Member (since 1 May 2007)
Edgar Rosenmayr – Deputy member (since 1 May 2007)
Supervisory Board
Helmut Schwager – Chairman
Wolfgang Reithofer – Vice-Chairman
Christian Böhm
Herbert Kofler
Erhard Schaschl – up to 27 February 2007
2006/07 2005/06
Total number of shares
Weighted average number
555,882,750 222,353,100
of shares 515,676,436 191,040,910
Net profit for the period in EUR 528,172,708 145,308,333
Earnings per share in EUR 1.02 0.76