Dusseldorf, Berlin For the ancient Romans, Consus was the god of the harvest brought in. At the moment, no one can speak of a good harvest from the Berlin project developer of the same name. The balance sheet data for 2020, which Consus Real Estate presented on Monday, gives little cause for celebration. Losses have increased massively.
Consus posted a balance sheet loss of 80.3 million euros. This consists of a net loss for the year of EUR 65.4 million and a loss carried forward of EUR 14.9 million. In the previous year, 2019, the balance sheet loss was almost 15 million euros. At that time, the loss carried forward of 40.6 million euros was offset by an annual surplus of 25.7 million euros.
The project developer, who claims to have projects with a volume of more than eight billion euros in the pipeline, is becoming more and more of a problem. In 2020, Consus merged with Ado Properties and Adler Real Estate to form Adler Group SA, based in the Grand Duchy of Luxembourg. The takeover is considered one of the most spectacular real estate deals in recent years – but also one of the most controversial.
Ado shareholders felt cheated, the German financial regulator Bafin warned of conflicts of interest, personal ties and possible violations of the German Stock Corporation Act. British shortseller Fraser Perring took up the criticism when he published an extensive dossier last October. He accused Adler of fraud, manipulation and deception of his financiers.
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At the time, Adler “completely” rejected the allegations. The heavily indebted group is currently striving to maintain important relationships with banks. At the end of 2021, the group repaid a €300 million revolving credit facility from Barclays, Deutsche Bank and JP Morgan Chase & Co. In addition, Adler apparently plans to sell non-core development projects that could bring in around one billion euros.
Steglitzer Kreisel is for sale
The development projects that are now to be sold, according to the Bloomberg news agency, include those from Consus, which have recently not or hardly progressed. For example, the base of the large-scale project Steglitzer Kreisel in Berlin and the prestigious Düsseldorf district Upper North are up for sale.
The special investigation that the group commissioned to clarify Perring’s allegations from the auditing company KPMG recently caused new unrest at Adler. Because the KPMG audit is unlikely to be completed before the second quarter of 2022, Adler recently had to postpone the publication of the 2021 annual report, which was planned for March 31. The finances of Consus are also included in these consolidated financial statements.
However, the annual financial statements of the Berlin project developer Consus did not have to be certified by an auditor, because with fewer than 50 employees and a turnover of 3.7 million euros, it qualifies as a “small corporation” – even though it has a huge balance sheet total of almost 1.9 billion euros.
Consus’ massive loss is mainly due to the decline in “income from profit and loss transfer agreements”, which fell from 80.4 million euros to zero. In addition, there were higher costs for “interest and similar expenses”. The assumption of losses from subsidiaries had an effect of minus 15.4 million euros.
The Consus management has so far left questions about the numbers unanswered. The company has also not been able to provide a short-term explanation of the figures.
Uncertain future prospects
However, the board members Theodorus Gorens and Bernd Dieter Schade warned of risk factors in the future in the published annual financial statements.
Consus is currently in financing talks, which are “significantly influenced” by the current reporting – with possible consequences for development and investment projects. There is a risk of an “immediate significant impact” on the valuation of the investments, the annual result and equity.
Read more about the real estate group Adler Group and the subsidiary Consus:
The headlines that Consus recently accompanied in many media were mainly negative. There has been little progress on many Consus construction sites in the past few months. Some prominent projects of the Adler subsidiary have been standing still for years. The parent company justified the delays with the weather, then with delivery bottlenecks or the corona pandemic.
The group did not communicate that Consus had also initiated a special test. As the Handelsblatt learned, in August 2020 Consus commissioned the Frankfurt white-collar criminal lawyer and ex-public prosecutor Kai Hart-Hönig to conduct a forensic investigation. Among other things, it was about the suspicion of outflows of funds and financial abnormalities on construction sites.
The special audit is also reflected in the figures now presented by Consus Real Estate. The other operating expenses have accordingly increased to around twelve million euros. In the previous year they had amounted to around seven million euros. The report states that the item mainly includes the costs for consultants, auditors and lawyers.
In 2020, the board members finally brought in a handsome harvest at Consus. Their salary rose to more than five million euros. In the previous year, these payments amounted to only 1.6 million euros.
More: Postponed annual financial statements: Adler Group reassured, investors’ nerves are on edge