Condensed Unaudited Results for FY 31 Dec 2022

RNS Number : 7320R

Globalworth Real Estate Inv Ltd

03 March 2023

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

3 March 2023

Globalworth Real Estate Investments Limited

("Globalworth" or the "Company")

Condensed Unaudited Financial Results for the year ended 31 December 2022

Globalworth, the leading office investor in Central and Eastern Europe, announces the release of its Unaudited Consolidated Statement of Comprehensive Income and Unaudited Consolidated Statement of Financial Position for the year ended 31 December 2022.

The Company intends to announce its audited Financial Results for the year ended 31 December 2022 and publish its 2022 Annual Report towards the end of March 2023.

Key Highlights for the year ended 31 December 2022

· Total combined portfolio value remained effectively unchanged at €3.2 billion (0.2% higher compared to 31 December 2021).

o  Combined standing commercial properties at year-end were appraised at €2.9 billion. Like-for-like properties marginally lower at €2.8 billion (1.3% decrease compared to 31 December 2021), with new facilities acquired or completed in 2022 adding €75.5 million in standing commercial portfolio value.

· Focused development program in select high-quality projects.

o  Romania; delivered 6 new logistics facilities offering 104.4k sqm of GLA, with 3 logistics facilities under development which are expected to have a total GLA of 30.0k sqm.

o  Poland; two mixed-use properties under refurbishment/repositioning.

· Acquired the first small business units logistic facility in Romania (Bucharest), with a total area of 7.1k sqm.

· Overall standing portfolio footprint net increase of 103.3k sqm (+7.9% compared to 31 December 2021) to 1.4m sqm of GLA in 71 standing properties.

· Leasing transactions of 206.9k sqm of commercial space at an average WALL of 4.4 years, despite continued challenging market conditions.

· Average standing occupancy of 85.6% (85.9% including tenant options), 2.9% lower compared to 31 December 2021.

o  Addition of 7 properties with an average occupancy of 54.2%, some of which are in the lease-up phase, negatively impacted the overall combined standing occupancy.

o  Like-for-like standing occupancy adjusted for Warta Tower in Warsaw (property held for sale and now effectively vacant), of 90.5% (+0.2% compared to 31 December 2021).

· Total annualised contracted rent up by 3.0% to €189.2m

o  Like-for-like annualised commercial contracted rents in our standing commercial portfolio increased by 1.7% to €177.5 million at the end of 2022, mainly as effect of rent indexation.

· Rate of collections invoiced and due remained high at 99.0% for 2022.

· Net Operating Income ("NOI") was lower by 3.2% compared to 2021 at €139.7 million.

· EPRA earnings increased by 21.2% to €71.6 million (2021: €59.1 million), as prior year EPRA earnings were impacted by the exceptional one-off costs associated with the cash offer for Globalworth's shares initiated in May 2021.

· Adjusted normalised EBITDA decreased by 3.2% to €126.0 million (2021: €130.2 million), due to lower NOI, partially offset by the positive impact of the lower recurring administrative and other non-operating expenses.

· Net loss of €16.1 million (2021: net profit of €47.5 million) due to revaluation losses of €89.5 million in 2022 compared to the €5.7 million revaluation losses in 2021.

· Cash dividend paid to shareholders of €0.27 per share in 2022.

· Preliminary EPRA Net Reinstatement Value (NRV) of €1.8 billion, or €8.29 per share, decreasing from €8.66 at 31 December 2021 mainly due to revaluation losses on the property portfolio.

· High liquidity of €163.8 million (vs €418.7 million at 2021 year-end) plus available liquidity from committed undrawn facilities of €300 million; LTV 42.7% at 31 December 2022 (vs 40.1% at 2021 year-end).

· Maintained investment grade rating by all three major rating agencies.

· Sustainability:

o  €2.6 billion in 53 green certified properties.

o  45 properties were certified or recertified with BREEAM Very Good or higher certifications during the year.

o  Committed to reduce our carbon footprint based on a science-based approach to align with a 1.5^oC trajectory.

o  Issued the third sustainable development report and our inaugural Green Bond Report.

o  Maintained low-risk rating by Sustainalytics and our MSCI rating to "A".

o  Contributed to over 15 social initiatives in Romania and Poland.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2022

		31 December	31 December
		2022	2021
		€'000	€'000
Revenue		239,251	219,350
Operating expenses		(99,571)	(75,098)
Net operating income		139,680	144,252
Administrative expenses		(13,712)	(25,622)
Acquisition costs		(7)	-
Fair value loss on investment property		(89,471)	(5,738)
Share-based payment expense		-	(532)
Depreciation and amortisation expense		(673)	(536)
Other expenses		(2,013)	(1,851)
Other income		524	1,051
Foreign exchange gain/(loss)		851	214
Loss from fair value of financial instruments at fair value through profit or loss		222	(386)
Profit before net financing cost		35,401	110,852
Finance cost		(52,532)	(55,539)
Finance income		2,694	1,749
Share of profit of equity-accounted investments in joint ventures		3,219	5,010
(Loss)/profit before tax		(11,218)	62,072
Income tax expense		(4,886)	(14,583)
(Loss)/profit for the year		(16,104)	47,489
Items that will not be reclassified to profit or loss:
Loss on equity instruments designated at fair value through other comprehensive income		(5,391)	-
Other comprehensive income for the year, net of tax		(5,391)
Total comprehensive income		(21,495)	47,489
(Loss)/profit attributable to:		(16,104)	47,489
-  ordinary equity holders of the Company		(16,961)	47,489
-  non-controlling interests		857	-
Total comprehensive income attributable to:		(21,495)	47,489
-  ordinary equity holders of the Company		(22,352)	47,489
-  non-controlling interests		857	-

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2022

		2022 €'000	2021 €'000
ASSETS
Investment property		2,945,460	2,966,080
Goodwill		12,349	12,349
Advances for investment property		4,393	3,436
Investments in joint ventures		67,967	48,908
Equity investments		7,521	12,109
Other long-term assets		1,784	2,083
Prepayments		226	338
Deferred tax asset		161	151
Non-current assets		3,039,861	3,045,454
Financial assets at fair value through profit or loss		3,554	7,324
Trade and other receivables		22,337	16,208
Contract assets		9,967	6,106
Guarantees retained by tenants		98	885
Income tax receivable		840	117
Prepayments		2,430	2,104
Cash and cash equivalents		163,767	418,748
		202,993	451,492
Investment property held for sale		126,009	130,537
Total current assets		329,002	582,029
Total assets		3,368,863	3,627,483
EQUITY AND LIABILITIES
Equity
Issued share capital		1,704,476	1,704,476
Treasury shares		(4,859)	(4,917)
Fair value reserve of financial assets at FVOCI		(5,469)	-
Share-based payment reserve		156	156
Retained earnings		(37,798)	38,914
Equity attributable to ordinary equity holders of the Company		1,656,506	1,738,629
Non-controlling interests		862	-
Total equity		1,657,368	1,738,629
Interest-bearing loans and borrowings		1,433,631	1,285,641
Deferred tax liability		154,866	150,713
Lease liabilities		19,861	18,762
Guarantees retained from contractors		1,995	2,661
Deposits from tenants		3,897	3,844
Trade and other payables		1,034	956
Non-current liabilities		1,615,284	1,462,577
Interest-bearing loans and borrowings		21,600	348,279
Guarantees retained from contractors		3,652	3,361
Trade and other payables		35,679	39,788
Contract liability		1,743	1,940
Other current financial liabilities		67	261
Current portion of lease liabilities		1,669	1,303
Deposits from tenants		17,477	16,068
Income tax payable		382	550
Current liabilities		82,269	411,550
Liabilities directly associated with the assets held for sale		13,942	14,727
Total current liabilities		96,211	426,277
Total equity and liabilities		3,368,863	3,627,483

COMBINED CONSOLIDATED PORTFOLIO SNAPSHOT

AS AT 31 DECEMBER 2022

Our real estate investments are in Poland and Romania, the two largest markets in the CEE. As at 31 December 2022, our portfolio was spread across 13 cities, with Poland accounting for 50.2% by value and Romania 49.8%.

Combined Portfolio Snapshot
	Poland	Romania		Combined Portfolio
Standing Investments(1)	19	22		41
GAV(2) / Standing GAV (€m)	€1,584m / €1,423m	€1,574m / €1,471m		€3,159m / €2,894m
Occupancy	81.3%	88.4%		85.6%
		(89.0% incl. tenant options)		(85.9% incl. tenant options)
WALL(3)	3.8 years	5.0 years		4.4 years
Standing GLA (k sqm)(4)	542.1k sqm	863.5k sqm		1,405.6k sqm
Contracted Rent (€m)(5)	€93.3m	€95.9m		€189.2m
GAV Split by Asset Usage
Office	83.0%	75.0%		79.0%
Mixed-Use	17.0%	0.0%		8.5%
Industrial	0.0%	17.2%		8.6%
Others	0.0%	7.9%		3.9%
GAV Split by City
Bucharest	0.0%	84.0%		41.9%
Timisoara	0.0%	6.3%		3.1%
Pitesti	0.0%	3.7%		1.8%
Constanta	0.0%	4.0%		2.0%
Arad	0.0%	1.1%		0.5%
Oradea	0.0%	0.4%		0.2%
Tg. Mures	0.0%	0.5%		0.3%
Warsaw	44.6%	0.0%		22.3%
Krakow	20.7%	0.0%		10.4%
Wroclaw	16.0%	0.0%		8.0%
Katowice	10.8%	0.0%		5.4%
Lodz	4.3%	0.0%		2.1%
Gdansk	3.7%	0.0%		1.8%
GAV as % of Total	50.2%	49.8%		100.0%
1. Standing Investments representing income producing properties. One investment can comprise multiple buildings. e.g. Green Court Complex comprises three buildings or one investment.
2. Includes all property assets, land and development projects valued at 31 December 2022.
3. Includes pre-let commercial standing and development assets. WALL of standing commercial properties in Romania, Poland and the Combined portfolio are 5.0 years, 3.7 years and 4.4 years, respectively.
4. Including 22.4k sqm of residential assets in Romania.
5. Total rent comprises commercial (€181.3 million) and residential (€0.7 million in Romania) standing properties, rent in assets under redevelopment (€6.7 million in Poland) and development pre-lets (€0.5 million in Romania).

Annualised Commercial Portfolio Lease Expiration Profile
Year	2023	2024	2025	2026	2027	≥2028	Total
€ million	20.2	28.8	19.0	19.6	25.7	75.2	188.5
% of total	10.7%	15.3%	10.1%	10.4%	13.6%	39.9%	100%

For further information visit www.globalworth.com or contact:

Enquiries

Stamatis Sapkas  Tel: [phone]

Chief Financial Officer

Panmure Gordon (Nominated Adviser and Broker)     Tel: [phone]

Dominic Morley

About Globalworth / Note to Editors:

Globalworth is a listed real estate company active in Central and Eastern Europe, quoted on the AIM-segment of the London Stock Exchange. It has become the pre-eminent office investor in the CEE real estate market through its market-leading positions both in Poland and Romania. Globalworth acquires, develops and directly manages high-quality office and industrial real estate assets in prime locations, generating rental income from high quality tenants from around the globe. Managed by over 260 professionals across Cyprus, Guernsey, Poland and Romania, a combined value of its portfolio is €3.2 billion, as at 31 December 2022. Approximately 96.4% of the portfolio is in income-producing assets, predominately in the office sector, and leased to a diversified array of over 690 national and multinational corporates. In Poland Globalworth is present in Warsaw, Wroclaw, Lodz, Krakow, Gdansk and Katowice, while in Romania its assets span Bucharest, Timisoara, Constanta, Pitesti, Arad, Oradea and Targu Mures.

For more information, please visit www.globalworth.com and follow us on Facebook, Instagram and LinkedIn.

 

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