Creditreform Rating has confirmed the SME Issuer Rating of Gateway Real Estate AG with BB-. The outlook is stable. Decisive for the rating assessment is, besides an increased capital and operating basis, the recently positive business development and the capital increase carried out in 2019, which contributed to an improvement of the result of the financial key figure analysis. The proven ability to access the capital market and the needs-based financial support from the group of shareholders have a positive effect on the rating, as does the well-filled project pipeline with a GDV of around EUR 5 billion. However, in our opinion, the (potentially) negative effects of the COVID 19 pandemic are dampening the rating, especially considering the ongoing recession and the renewed restrictions on public life in Germany. Based on the reporting as of June 30, 2020 and the earnings forecast for fiscal year 2020 as a whole, we consider the actual impact to date to be limited. Nevertheless, the situation remains challenging in the long term. Especially for commercial properties, which are particularly affected by the negative effects of the COVID 19 pandemic and account for more than half of Gateway Real Estate AG's project pipeline. The high dividend payout and the significant decline in cash and cash equivalents, which led to an increase in net financial debt despite the repayment of financial liabilities, also had a dampening effect on the rating.
The one-year outlook for the rating is stable for the time being. Based on a solid, growth-oriented development in fiscal year 2019 and a resulting improvement in key financial ratios, we see a certain buffer in the short term to compensate for the initially limited negative impact of the COVID 19 pandemic on the net assets, financial position and results of operations of Gateway Real Estate AG.