Q1 2024 RESULTS
FAVOURABLE FIRST QUARTER PERFORMANCE LEADS TO IMPROVED KEY
METRICS, FITCH CONFIRMS BB+ RATING
REVENUES FROM | FFO I | NET LTV | OCCUPANCY | CASH/ CASH & ESCROW |
RENTAL ACTIVITIES | ||||
€46M | €19M | 48.1% | 86% | €122M/€149M |
Q1 2024 FINANCIAL HIGHLIGHTS
- Revenues from rental activity up 7% to €46m in Q1 2024 (€43m in Q1 2023); Like-for-likerental revenue growth of 7%
- Gross margin from rental activity up 9% to €32m in Q1 2024 (€30m in Q1 2023)
- FFO I at €19m in Q1 2024 (€16m in Q1 2023), FFO per share at €0.03
- EPRA NTA at €1,247m as of 31 March 2024 (€1,232m as of 31 December 2023)
EPRA NTA per share at €2.17 (PLN 9.34) - Net LTV at 48.1%1 (49.3%¹ as of 31 December
2023); Net LTV adjusted for cash on escrow accounts at 47.0% - Cash of €122m; cash on the escrow accounts of €27m.
Q1 2024 PORTFOLIO HIGHLIGHTS
- Occupancy at 86% as of 31 March 2024 (87% as of 31 December 2023)
- Leasing activity reached 19,000 sq m in Q1 2024 (24,300 sq m in Q1 2023)
- Average weighted lease term at 3.4 yrs.
- 87% of real estate portfolio is recurring income- producing
- 65% of recurring income-producing portfolio is office
- 92% of assets green certified
"We had a very good first quarter. Our revenues were again boosted by indexation and grew 7%. Our FFO also showed a significant growth and was, along-side the funds drawn under the new loan agreement, a positive driver for our comfortable cash position of EUR 122 million and a decrease in LTV to 48.1%." - commented Gyula Nagy, GTC's President of the
Management Board.
"We are closely monitoring debt capital markets and are pleased with their recovery reflected in several successful real estate exchange offers and new bonds issuances. Based on these positive tailwinds, we, together with our financial advisers, are working on a financing strategy to address the bond maturities in 2026. We are committed to stay at the debt capital market and therefore committed to keep our public rating which Fitch recently affirmed as BB+ stable," - added Nagy.
1 Includes non-current financial assets
1
OPERATING ACHIEVEMENTS IN Q1 2024
Office sector
Retail sector
- Occupancy at 83% as of 31 March 2024 (84% in December 2023)
- Average weighted lease term of 3.4 yrs. (3.5 yrs. in December 2023)
- Leasing activity reached 11,300 sq m in Q1 2024 (20,800 sq m in Q1 2023):
- Prolongation of AHOP in Francuska Office Centre, Katowice (c. 1,800 sq m)
- Match Trade Technologies chose Pixel, Poznań (c. 1,300 sq m)
- Nickel Development chose Pixel, Poznań (c. 1,300 sq m)
- Prolongation of Arup lease in Korona Office Complex, Krakow (c. 900 sq m)
- Gyms4U chose Matrix C, Zagreb (c. 550 sq m)
- Prolongation of Takeda Pharma in Duna Tower, Budapest (c. 500 sq m)
- Occupancy at 96% as of 31 March 2024 (96% as of 31 December 2023)
- Average weighted lease term of 3.2 yrs. (3.5 yrs. in December 2023)
- Leasing activity reached 7,700 sq m in Q1 2024 (3,500 sq m in Q1 2023):
- Prolongation of LC Waikiki in Ada Mall, Belgrade (c. 1,200 sq m)
- Prolongation of LPP brands in Galeria Jurajska, Czestochowa (c. 1,200 sq m)
-
Prolongation of New Yorker in Galeria Jurajska, Czestochowa (c. 700 sq m) o Super Dr. Max chose Ada Mall, Belgrade (c. 600 sq m)
o Prolongation of Douglas in Galeria Północna, Warsaw (c. 300 sq m)
FINANCIALS
Rental and service | |
revenues | • Up 7% to €46m in Q1 2024 as compared to €43m in Q1 2023 |
The Group recognized an increase in rental revenues of €1.5 following the completion of | |
GTC X in Belgrade, Rose Hill Business Campus in Budapest and Matrix C in Zagreb. | |
The Group observed also an increase in an average rental rate following the indexation | |
of its rental rates to the European CPI. | |
Gross margin from | • At €32m in Q1 2024 as compared to €30m in Q1 2023 |
operations | Mainly due to an increase in rental and service revenues partially offset by an increase |
in the service charge cost due to inflation. | |
Administrative expenses | • At €4.5m as compared to €3.9m in Q1 2023 |
Mainly due to recognition of one-off payments related to the severance payments, | |
an increase in remuneration fees and other advisory expenses. | |
Profit /(loss) from | • Loss of €6m as compared to €3m loss in Q1 2023 |
revaluation of | Loss in the three-month period ended 31 March 2024, is mainly a result of capitalized |
investment properties | |
expenditures on completed buildings. | |
2
Financial expenses, net | • Financial expenses, net at €8.5m as compared to €7.6m in Q1 2023 |
Average interest rate at 2.58%. | |
Tax | • Corporate income tax amounted to €3m as compared to €3m tax in Q1 2023 |
Taxation consists mainly of €1.7m of current tax expenses and €1.5m of deferred tax. | |
Adjusted EBITDA and | • Adjusted EBITDA was at €27m (€24m in Q1 2023). Net profit amounted to €10m in |
net profit /(loss) | Q1 2024 (€12m profit in Q1 2023). The decrease mainly resulted from the loss from |
revaluation. | |
Funds From Operations | • At €19m as compared to €16m in Q1 2023, FFO I per share at €0.03. |
(FFO I) | |
Total investments and | • Total investments, including non-current financial assets, at €2,434m as of 31 |
GAV | March 2024 (€2,416m as of 31 December 2023) and GAV at €2,298m as of 31 March |
2024 (€2,281m as of 31 December 2023), mainly due to investments into assets under | |
construction of €22m and recognized increase in the right-of-use (and corresponding | |
increase in lease liabilities) due to new annual perpetual usufruct payments of €24m. | |
This increase was partially offset by loss from revaluation related to investment | |
properties of €6m. | |
EPRA NTA / share | • At €2.17 compared to €2.15 on 31 December 2023 |
Corresponding to EPRA NTA of €1,247m compared to €1,232m as of 31 December | |
2023. | |
Debt and debt related | • Debt at €1,319m compared to €1,274m as of 31 December 2023 |
indicators | Related mainly to proceeds from long-term borrowings (€56m) combined with foreign |
exchange differences on bonds denominated in HUF (€5m), compensated by | |
repayments (€5m). Current portion of long-term debt increased due to reclassification | |
of loan related to Galeria Jurajska due to upcoming maturity in Q1 2025. | |
• Weighted average debt maturity of 3.6 years and average interest rate of 2.58% | |
p.a. | |
• Net LTV 48.1%2 (49.3%² on 31 December 2023). Net LTV adjusted for cash transferred | |
to the escrow accounts at 47.0%. | |
• Annualized consolidated coverage ratio (based on EBITDA) at 3.3x (3.4x as of | |
31 December 2023) | |
• Unsecured debt at 49% (52% as of 31 December 2023) and unencumbered | |
properties at 41% (46% as of 31 December 2023) | |
Cash | • Cash balance of €122m as of 31 March 2024 (€60m as of 31 December 2023) |
The cash balance was increased partially due to acquisition of new long-term secured | |
loan of €56m, net cash proceeds from operating activities of €27m and change in short- | |
term deposits designated for bonds buy back of €12m, partially offset by expenditures | |
on investment properties of €19m, interest paid in the amount of €7m and repayment of | |
borrowings of €5m. | |
2 Includes non-current financial assets;
3
Annex 1 Consolidated Statement of Financial Position as of 31 March 2024
(in millions of euro)
31 March 2024 | 31 December 2023 | ||||
unaudited | audited | ||||
ASSETS | |||||
Non-current assets | |||||
Investment property | 2,311.8 | 2,273.4 | |||
Residential landbank | 27.2 | 27.2 | |||
Property, plant and equipment | 15.8 | 16.0 | |||
Blocked deposits | 13.3 | 13.1 | |||
Deferred tax asset | 2.2 | 1.8 | |||
Derivatives | 2.4 | 2.3 | |||
Non-current financial assets measured | 136.4 | 135.1 | |||
at fair value through profit or loss | |||||
Other non-current assets | 0.2 | 0.2 | |||
Loan granted to non-controlling interest partner | 11.7 | 11.6 | |||
2,521.0 | 2,480.7 | ||||
Current assets | |||||
Accounts receivables | 16.6 | 15.7 | |||
VAT and other tax receivables | 4.0 | 3.1 | |||
Income tax receivables | 1.9 | 1.5 | |||
Prepayments and other receivables | 32.3 | 52.4 | |||
Derivatives | 10.3 | 11.9 | |||
Short-term blocked deposits | 17.4 | 17.3 | |||
Cash and cash equivalents | 122.5 | 60.4 | |||
Assets held for sale | 13.6 | 13.6 | |||
218.6 | 175.9 | ||||
TOTAL ASSETS | 2,739.6 | 2,656.6 | |||
4
Annex 1 Consolidated Statement of Financial Position as of 31 March 2024 (cont.)
(in millions of euro)
31 December | ||||
31 March 2024 | 2023 | |||
unaudited | audited | |||
EQUITY AND LIABILITIES | ||||
Equity attributable to equity holders of the Company | ||||
Share capital | 12.9 | 12.9 | ||
Share premium | 668.9 | 668.9 | ||
Capital reserve | (49.3) | (49.3) | ||
Hedge reserve | (3.4) | 0.7 | ||
Foreign currency translation reserve | (2.7) | (2.6) | ||
Accumulated profit | 480.6 | 471.3 | ||
1,107.0 | 1,101.9 | |||
Non-controlling interest | 24.8 | 24.3 | ||
Total Equity | 1,131.8 | 1,126.2 | ||
Non-current liabilities | ||||
Long-term portion of borrowings | 1,157.3 | 1,228.7 | ||
Lease liabilities | 65.2 | 43.2 | ||
Deposits from tenants | 13.3 | 13.1 | ||
Long term payables | 5.8 | 5.2 | ||
Derivatives | 27.5 | 18.7 | ||
Deferred tax liabilities | 136.4 | 135.1 | ||
1,405.5 | 1,444.0 | |||
Current liabilities | ||||
Current portion of borrowings | 160.6 | 45.3 | ||
Trade payables and provisions | 33.4 | 34.0 | ||
Deposits from tenants | 2.2 | 2.4 | ||
VAT and other taxes payables | 2.9 | 1.9 | ||
Income tax payables | 2.8 | 2.4 | ||
Liabilities related to assets held for sale | 0.4 | 0.4 | ||
202.3 | 86.4 | |||
TOTAL EQUITY AND LIABILITIES | 2,739.6 | 2,656.6 | ||
5
Annex 2 Consolidated Income Statement for the 3-month period ended 31 March 2024
(in millions of euro)
Three-month period ended | |||||
31 March | |||||
Unaudited | 2024 | 2023 | |||
Rental revenue | 34.3 | 31.1 | |||
Service charge revenue | 11.4 | 11.6 | |||
Service charge costs | (13.5) | (13.1) | |||
Gross margin from operations | 32.2 | 29.6 | |||
Selling expenses | (0.6) | (0.6) | |||
Administration expenses | (4.5) | (3.9) | |||
Loss from revaluation | (5.7) | (3.0) | |||
Other income | - | ||||
0.2 | - | ||||
Other expenses | (0.2) | (0.4) | |||
Net operating profit | 21.4 | 21.7 | |||
Foreign exchange differences | 0.1 | 0.2 | |||
Finance income | 0.8 | 0.2 | |||
Finance cost | (9.3) | (7.8) | |||
Result before tax | 13.0 | 14.3 | |||
Taxation | (3.2) | (2.7) | |||
Result for the period | 9.8 | 11.6 | |||
Attributable to: | |||||
Equity holders of the Parent Company | 9.3 | 11.2 | |||
Non-controlling interest | 0.5 | 0.4 | |||
Basic earnings per share (in Euro) | 0.02 | 0.02 | |||
Annex 3 Consolidated Statement of Cash Flow for the 3-month period ended 31 March 2024
(in millions of euro)
Three-month | Three-month | ||
period ended | period ended | ||
31 March 2024 | 31 March 2023 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | 14.3 | ||
Result before tax | 13.0 | ||
Adjustments for: | |||
Loss/(profit) from revaluation | 5.7 | 3.0 | |
Foreign exchange differences | (0.1) | (0.2) | |
Finance income | (0.8) | (0.2) | |
Finance cost | 9.3 | 7.8 | |
Share based payment provision revaluation | - | (0.4) | |
Depreciation | 0.3 | 0.1 | |
Operating cash before working capital changes | 27.4 | 24.4 | |||
Increase in accounts receivables and other current assets | (0.6) | (6.1) | |||
Increase in deposits from tenants | - | 0.8 | |||
- | |||||
Increase / (decrease) in trade and other payables | 1.3 | 1.7 | |||
Cash generated from operations | 28.1 | 20.8 | |
Tax paid in the period | (1.3) | (1.2) | |
Net cash from operating activities | 26.8 | 19.6 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Expenditure on investment property | (19.4) | (25.3) | |
Sale of completed assets | - | 49.2 | |
Change in short-term deposits designated for investment | 12.2 | - | |
Expenditure on non-current financial assets | - | (1.3) | |
VAT/tax on purchase/sale of investment property | (0.9) | 1.6 | |
Interests received | 0.2 | 0.1 | |
Net cash from/(used in) investing activities | (7.9) | 24.3 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from long-term borrowings
Repayment of long-term borrowings
Interest paid
Repayment of lease liability
Loan origination costs
Decrease/(increase) in short term deposits
Dividend paid to non-controlling interest
Net cash from/(used in) financing activities
Net foreign exchange difference, related to cash and cash equivalents
55.9 | - | |
(4.8) | (5.5) | |
(6.5) | (4.7) | |
(0.7) | (0.6) | |
(0.4) | - | |
(0.3) | (0.1) | |
- | (0.9) | |
43.2 | (11.8) | |
- | (0.1) | |
Net change in cash and cash equivalents | 62.1 | 32.0 |
Cash and cash equivalents at the beginning of the period | 60.4 | 115.1 |
Cash and cash equivalents at the end of the period | 122.5 | 147.1 |
About GTC
The GTC Group is a leading real estate investor and developer focusing on Poland and capital cities in Central and Eastern Europe. During nearly 30 years of its activity, GTC has developed 82 high standard, modern office and retail properties with a total area of 1.4 million sq. m through Central and Eastern Europe.
GTC now actively manages a commercial real estate portfolio of 46 commercial buildings providing ca. 755 ths. sq m of lettable office and retail space in Poland, Hungary, Bucharest, Belgrade, Zagreb and Sofia. In addition, GTC has a development pipeline of approx. 500 ths. sq m retail and office properties in capital cities of Central and Eastern Europe, 51 ths. sq m under construction.
GTC S.A. is listed on the Warsaw Stock Exchange and inward listed on the Johannesburg Stock Exchange.
For further information:
Małgorzata Czaplicka
Globe Trade Centre S.A.
M.: +48 22 166 07 10
e-mail:malgorzata.czaplicka@gtcgroup.com
Alicja Lewandowska-Wolińska
Hill & Knowlton
M.: +48 605 120 399
e-mail:Alicja.Lewandowska@hillandknowlton.com
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GTC - Globe Trade Centre SA published this content on 28 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 May 2024 05:30:06 UTC.