21 Assets and Liabilities Held for Sale and Assets and Liabilities of Discontinued Operations
Assets and Liabilities Held for Sale
As part of Vonovia’s efforts to sell off a portfolio in Berlin, a notarized sales contract was successfully concluded on April 23, 2024. Two companies with around 4,500 residential units and a real estate value of approx. € 700.0 million will be disposed of within the scope of this transaction. The transaction is expected to be closed on December 31, 2024. The assets and liabilities of the two affected property-holding companies (share deal) are therefore recognized as a disposal group in the balance sheet as of June 30, 2024. The assets are almost exclusively composed of investment properties. Liabilities mainly comprise deferred tax liabilities.
In addition, Vonovia successfully concluded a notarized sales contract for around 1,970 residential units and six commercial units on July 26, 2024. The purchase price of around € 300.0 million is slightly higher than the carrying amounts of the properties sold recognized at the time of the negotiations. The assets are therefore recognized as assets held for sale, with the expected purchase price, in the balance sheet as of June 30, 2024.
The sale in the first half of 2024 of real estate portfolios from the Rental segment which, as of December 31, 2023, had been classified as assets and liabilities held for sale had the opposite effect.
Impairment Losses on the Disposal Group
The management currently expects the purchase price to match the balance of IFRS 5 assets and liabilities less costs to sell.
As a result, the valuation of the disposal group at the lower of carrying amount and fair value less costs to sell has not produced any valuation effects.
Assets and Liabilities Held for Sale of the Discontinued Operation
As of June 30, 2024, the assets and liabilities of the discontinued Care segment were as follows:
Assets from the discontinued operations
in € million | Dec. 31, 2023 | Jun. 30, 2024 | |||
Intangible assets | 22.6 | 9.2 | |||
Property, plant and equipment | 28.9 | 29.0 | |||
Investment properties | 619.4 | 532.2 | |||
Other assets | 40.3 | 28.3 | |||
Total non-current assets of discontinued operations | 711.2 | 598.7 | |||
Inventories | 0.9 | 0.9 | |||
Trade receivables | 9.0 | 24.6 | |||
Other assets | 2.0 | 3.7 | |||
Income tax receivables | 2.6 | 0.1 | |||
Cash and cash equivalents | 44.4 | 49.5 | |||
Total current assets of discontinued operations | 58.9 | 78.8 | |||
Total assets of discontinued operations | 770.1 | 677.5 | |||
The drop in non-current assets and liabilities of the discontinued operations is due to the sale of Care properties in the first half of 2024 with a carrying amount of € 90.8 million.
Liabilities from the discontinued operations
in € million | Dec. 31, 2023 | Jun. 30, 2024 | |||
Provisions | 30.7 | 32.6 | |||
Non-derivative financial liabilities | 35.6 | – | |||
Lease liabilities | 3.6 | 3.0 | |||
Other liabilities | 0.1 | ||||
Deferred tax liabilities | 23.2 | 3.9 | |||
Total non-current liabilities of discontinued operations | 93.1 | 39.6 | |||
Provisions | 1.0 | 12.7 | |||
Trade payables | 11.2 | 4.4 | |||
Non-derivative financial liabilities | 0.8 | – | |||
Lease liabilities | 1.0 | 1.0 | |||
Current income taxes | 11.4 | 0.3 | |||
Other liabilities | 23.5 | 17.3 | |||
Total current liabilities of discontinued operations | 48.9 | 35.7 | |||
Total liabilities of discontinued operations | 142.0 | 75.3 | |||
The earnings contribution from discontinued operations is comprised as follows.
Earnings contribution from the discontinued operations
in € million | Jan. 1–Jun. 30, 2023 | Jan. 1–Jun. 30, 2024 | Apr. 1–Jun. 30, 2023 | Apr. 1–Jun. 30, 2024 | |||||
Revenue from property letting | |||||||||
Other revenue from property management | 132.0 | 145.6 | 67.5 | 73.8 | |||||
Revenue from property management | 132.0 | 145.6 | 67.5 | 73.8 | |||||
Income from disposal of properties | – | 87.7 | – | 87.7 | |||||
Carrying amount of properties sold | – | -90.8 | – | -90.8 | |||||
Profit from the disposal of properties | – | -3.1 | – | -3.1 | |||||
Net income from fair value adjustments of investment properties | -0.7 | -22.2 | -0.7 | -22.2 | |||||
Cost of materials | -27.8 | -26.4 | -14.8 | -11.9 | |||||
Personnel expenses | -80.7 | -90.5 | -40.0 | -47.0 | |||||
Depreciation and amortization | -22.0 | -9.6 | -19.0 | -9.6 | |||||
Other operating income | 11.5 | 8.9 | 3.3 | 3.7 | |||||
Net income from the derecognition of | 0.1 | 0.1 | 0.0 | – | |||||
Other operating expenses | -10.7 | -9.4 | -4.7 | -4.9 | |||||
Interest expenses | -0.6 | -0.7 | -0.4 | 0.1 | |||||
Earnings before tax | 1.1 | -7.3 | -8.8 | -21.1 | |||||
Income taxes | 2.0 | -0.4 | 4.2 | 1.3 | |||||
Profit for the period from discontinued operations (before valuation of | 3.1 | -7.7 | -4.6 | -19.8 | |||||
Valuation result from | – | -13.4 | – | -13.4 | |||||
Profit for the period from | 3.1 | -21.1 | -4.6 | -33.2 | |||||
Cumulative Income or Expenses Included in Other Comprehensive Income
Taking into account deferred tax effects, the cumulative result from the measurement of actuarial gains and losses in connection with the disposal group in the amount of € 10.0 million is included in other comprehensive income. € 2.4 million of the gains and losses are attributable to Vonovia’s shareholders and € 0.4 million to non-controlling shareholders.
Earnings per Share
Earnings per share attributable to the profit for the period for the discontinued operations amount to € -0.02 as of June 30, 2024 (first half of 2023: € 0.00). Due to the small amount of cumulative income and expenses included in other comprehensive income, this also matches the earnings per share of total comprehensive income.
Cash Flows from the Discontinued Operation
Cash Flows from the discontinued operations
Key Data from the Statement of Cash Flows | |||||
in € million | Jan. 1–Jun. 30, 2023 | Jan. 1–Jun. 30, 2024 | |||
Cash flow from operating activities | 27.4 | 27.5 | |||
Cash flow from investing activities | -15.6 | 48.2 | |||
Cash flow from financing activities | -11.7 | -70.6 | |||
Net changes in cash and cash equivalents of discontinued operations | 0.1 | 5.1 | |||
Cash and cash equivalents at the beginning of the period | 41.6 | 44.4 | |||
Cash and cash equivalents at the end of the period of | 41.7 | 49.5 | |||
Impairment Losses on the Discontinued Operations
The valuation of the disposal group at the lower of carrying amount and fair value less costs to sell produced impairment losses of € 13.4 million. The impairment losses relate to the impairment of the customer base in the amount of € 13.4 million within the disposal group.