Notice of Interim Results & Prelim Interim Info

RNS Number : 6624X

Globalworth Real Estate Inv Ltd

31 August 2022

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

31 August 2022

Globalworth Real Estate Investments Limited

("Globalworth" or the "Company")

Notice of Interim Results & Preliminary Interim Financial Information

Globalworth announces that it intends to publish its Interim Report and Financial Statements for the six-month period ended 30 June 2022 during the week commencing 19 September 2022. Ahead of this publication, the Company is today providing a preliminary release of its unaudited Consolidated Statement of Comprehensive Income and unaudited Consolidated Statement of Financial Position to 30 June 2022.

Key Highlights for the period ended 30 June 2022

· Total combined portfolio value increased by 1.7% to €3.2 billion, mainly due to new acquisitions and net positive impact from our developments (delivered, in progress or under refurbishment).

o  Like-for-like appraised value of standing commercial properties marginally increased to €2.8 billion (0.8% higher compared to 31 December 2021).

· Developments focused on high-quality logistic / light-industrial facilities in Romania (56.0k sqm) and the refurbishment / repositioning of two mixed-use properties in Poland aiming at increasing their class "A" office space and improving their retail/commercial offering, in response to current market conditions.

· Completed the development of four high-quality logistic facilities, adding 61.7k sqm of spaces to our portfolio.

· Acquired our first small business units logistic facility in Bucharest Greater Area with an area of 7.1k sqm.

· Overall standing portfolio footprint net increase of 64.2k sqm to 1.4m sqm of GLA in 71 standing properties.

· Leasing transactions for 106.1k sqm of commercial space taken-up or extended at an average WALL of 5.0 years despite continued challenging market conditions.

· Average standing occupancy of our combined commercial portfolio of 88.1% (88.4% including tenant options), marginally lower to year-end 2021 (88.5% or 88.7% including tenant options).

o  Average occupancy impacted by the addition of four newly completed industrial properties assets (2 in lease up phase) with average occupancy of 61.8%, offsetting the higher occupancy observed in the smaller business units logistics facility acquired with occupancy of 98.0%.

o  Like-for-like occupancy marginally increased by 0.9% despite the challenging market conditions and the WARTA Tower now effectively vacant.

· Total annualised contracted rent increased by 2.5% to €188.4 million compared to year end 2021, of which:

o  92.3% is contracted in office and industrial properties

o  95.9% is in active leases, with the remainder 4.1% of contracted annualised rent to commence in the future.

· Like-for-like annualised commercial contracted rents in our standing commercial portfolio increased by 2.1% to €178.1 million at the end of the first half of 2022, mainly as effect of rent indexation.

· Challenging market conditions and war in the Ukraine impacting the economic and business environment negatively.

· S&P and Fitch re-affirmed the investment grade rating following their 2021 year end review of Globalworth, with Moody's maintaining and stabilising their rating outlook of the Company in Q4 2021.

· Repaid on its maturity date the outstanding principal amount of €323 million of the inaugural GWI 17/22 bond, resulting in the Company having no material debt maturing until March 2025.

· Entered into a 6-year term loan agreement for €85 million with the International Finance Corporation ("IFC"), which is a member of the World Bank.

· Net Operating Income was lower by 3.2% compared to H1-2021 at €69.9 million.

· EPRA earnings increased by 18.2% to €34.3 million (H1-2021: €29.0 million), partially impacted by the better operating results due to lower administrative costs and lower income tax expenses (excluding deferred tax expense on investment property) compared to the same period in 2021.

· Adjusted normalised EBITDA (including share of minority interests) decreased by 2.1% to €63.4 million (H1-2021: €64.8 million), due to a decline in NOI partially offset by lower administrative and other expenses .

· Profit attributable to equity holders of the Company significantly improved to €32.6 million (H1-2021: €12.5 million) due to fair value gain on investment property, lower administrative expenses, increase in the share of profit of equity-accounted investments in joint ventures which were partially net off by higher operating expenses.

· Interim cash dividend paid to shareholders of €0.13 per share in H1-2022.

· Preliminary EPRA Net Reinstatement Value (NRV) of €1.9 billion, or €8.72 per share, a marginal increase (+0.6% per share) from €8.66 at 31 December 2021 mainly due to dividends paid and lower operating performance offsetting the positive impact from significantly lower non-recurring costs in H1-22, positive revaluation gains.

· IFRS Earnings per share of 15 cents in H1-2022 (H1-2021: 6 cents).

· Maintaining high levels of liquidity even after the GWI 17/22 bond repayment at €185 million plus €155 million in undrawn RCF facility, and an LTV at 41.0% at 30 June 2022 (vs 40.1% at 2021 year-end).

· Sustainability:

o  €2.8bn in 57 green certified properties in our portfolio;

o  23 properties were certified or recertified with BREEAM Very Good or higher certifications in the period;

o  Issued the fourth sustainable development report for the Group, and our second Green Bond Report; and

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

INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 20 22
	30 June  2022 Unaudited	30 June 2021 Unaudited
	€'000	€'000
Revenue	116,551	108,110
Operating expenses	(46,696)	(35,957)
Net operating income	69,855	72,153
Administrative expenses	(6,484)	(9,323)
Acquisition costs	(7)	-
Fair value gain/(loss) on investment property	7,019	(14,703)
Share-based payment expense	-	(432)
Depreciation and amortisation expense	(309)	(259)
Other expenses	(720)	(795)
Other income	295	476
Foreign exchange gain/(loss)	307	(50)
Gain/(loss) from fair value of financial instruments at fair value through profit or loss	73	(243)
Profit before net financing cost	70,029	46,824
Finance cost	(27,547)	(27,523)
Finance income	1,179	839
Share of profit/(loss) of equity-accounted investments in joint ventures	2,012	(1,273)
Profit before tax	45,673	18,867
Income tax expense	(12,245)	(6,333)
Profit for the period	33,428	12,534
Items that will not be reclassified to profit or loss
Gain on equity instruments designated at fair value through other comprehensive income	36	-
Other comprehensive income for the period, net of tax	36	-
Total comprehensive income for the period	33,464	12,534
Profit attributable to:	33,428	12,534
-  ordinary equity holders of the Company	32,606	12,534
-  non-controlling interests	822	-
Total comprehensive income attributable to:	33,464	12,534
-  ordinary equity holders of the Company	32,642	12,534
-  non-controlling interests	822	-

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 20 22

	30 June 2022 Unaudited €'000	31 December 2021 Audited €'000
ASSETS
Investment property	3,005,689	2,966,080
Goodwill	12,349	12,349
Advances for investment property	3,483	3,436
Investments in joint-ventures	66,155	48,908
Equity investments	12,628	12,109
Other long-term assets	1,927	2,083
Prepayments	460	338
Deferred tax asset	17	151
Non-current assets	3,102,708	3,045,454
Financial assets at fair value through profit or loss	7,397	7,324
Trade and other receivables	17,951	16,208
Contract assets	6,138	6,106
Guarantees retained by tenants	47	885
Income tax receivable	1,769	117
Prepayments	4,591	2,104
Cash and cash equivalents	184,709	418,748
	222,602	451,492
Investment property held for sale	126,926	130,537
Total current assets	349,528	582,029
Total assets	3,452,236	3,627,483
EQUITY AND LIABILITIES
Issued share capital	1,704,476	1,704,476
Treasury shares	(4,889)	(4,917)
Share-based payment reserve	156	156
Retained earnings	42,749	38,914
Equity attributable to ordinary equity holders of the Company	1,742,492	1,738,629
Non-controlling interests	827	__--
Total equity	1,743,319	1,738,629
Interest-bearing loans and borrowings	1,431,659	1,285,641
Deferred tax liability	163,731	150,713
Lease liabilities	17,834	18,762
Deposits from tenants	4,050	3,844
Guarantees retained from contractors	1,628	2,661
Trade and other payables	956	956
Non-current liabilities	1,619,858	1,462,577
Interest-bearing loans and borrowings	18,623	348,279
Guarantees retained from contractors	3,737	3,361
Trade and other payables	32,306	39,788
Contract liability	1,729	1,940
Other current financial liabilities	47	261
Current portion of lease liabilities	1,426	1,303
Deposits from tenants	16,603	16,068
Income tax payable	702	550
	75,173	411,550
Liabilities directly associated with the assets held for sale	13,886	14,727
Total current liabilities	89,059	426,277
Total equity and liabilities	3,452,236	3,627,483

COMBINED CONSOLIDATED PORTFOLIO SNAPSHOT

AS AT 30 JUNE 2022

Our real estate investments are in Poland and Romania, the two largest markets in the CEE. As at 30 June 2022, our portfolio was spread across 12 cities, with Poland accounting for 50.8% by value and Romania 49.2%.

Combined Portfolio Snapshot (as at 30 June 2022)
	Poland	Romania	Combined Portfolio
Standing Investments(1)	19	21	40
GAV(2) / Standing GAV (€m)	€1,628m / €1,459m	€1,578m / €1,470m	€3,206m / €2,929m
Occupancy	84.0%	90.9%	88.1%
		(91.3% incl. tenant options)	(88.4% incl. tenant options)
WALL(3)	3.8 years	5.3 years	4.6 years
Standing GLA (k sqm)(4)	542.1k sqm	824.4k sqm	1,366.5k sqm
Contracted Rent (€m)(5)	€94.9m	€93.5m	€188.4m
GAV Split by Asset Usage
Office	82.7%	76.2%	79.5%
Mixed-Use	17.3%	0.0%	8.8%
Industrial	0.0%	15.7%	7.7%
Others	0.0%	8.1%	4.0%
GAV Split by City
Bucharest	0.0%	84.7%	41.7%
Timisoara	0.0%	6.2%	3.1%
Pitesti	0.0%	3.8%	1.9%
Constanta	0.0%	3.9%	1.9%
Arad	0.0%	1.1%	0.5%
Oradea	0.0%	0.4%	0.2%
Warsaw	44.2%	0.0%	22.5%
Krakow	21.1%	0.0%	10.7%
Wroclaw	16.0%	0.0%	8.1%
Katowice	10.9%	0.0%	5.5%
Lodz	4.2%	0.0%	2.1%
Gdansk	3.5%	0.0%	1.8%
GAV as % of Total	50.8%	49.2%	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 30 June 2022.
3. Includes pre-let commercial standing and development/re-development assets. WALL of standing commercial properties in Romania, Poland and the Combined portfolio are 5.3 years, 3.8 years and 4.5 years, respectively.
4. Including 25.7k sqm of residential assets in Romania.
5. Total rent comprises commercial (€180.8 million) and residential (€0.9 million in Romania) standing properties, rent in assets under refurbishment (€6.5 million in Poland) and development pre-lets (€0.2 million in Romania).

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]

Alina Vaskina

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 240 professionals across Cyprus, Guernsey, Poland and Romania, a combined value of its portfolio is €3.2 billion, as at 30 June 2022. Approximately 96.3% of the portfolio is in income-producing assets, predominately in the office sector, and leased to a diversified array of over 660 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 and Oradea.

IMPORTANT NOTICE: This announcement has been prepared for the purposes of complying with the applicable laws and regulations of the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom. This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "targets", "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward looking statements include all matters that are not historical facts and involve predictions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business, results of operations, financial position, liquidity, prospects, growth or strategies and the industry in which it operates. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. Save as required by law or regulation, the Company disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements in this announcement that may occur due to any change in its expectations or to reflect events or circumstances after the date of this announcement.

 

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