Release Date: September 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- EBITDA before valuations grew over 70% year-over-year, reaching EUR46.5 million.
- Operating malls achieved record tenant sales of EUR375 million, a 6% increase year-over-year.
- Strong leasing activity with renewals and re-lettings generating 16% higher rental income.
- Marinas' EBITDA increased by 9% to almost EUR10 million, with 100% occupancy in mega yacht marinas.
- Ellinikon project showed significant progress with cash proceeds from property sales approaching EUR800 million.
Negative Points
- Challenging market conditions due to high demand for public and private sector projects and a tight labor market.
- A one-time write-off associated with the redesign of the Ellinikon Mall, impacting financial results.
- Deferred revenue not yet recognized as P&L revenue amounted to EUR277 million, affecting short-term financial visibility.
- The market for office development remains weaker, leading to redesigns and potential delays.
- Uncertainty in the market conditions may affect the timing and profitability of future transactions.
Q & A Highlights
Q: Can you provide an update on the projects expected to be completed by the end of 2024 and those scheduled for 2025 in the Ellinikon? Also, what are the anticipated cash proceeds?
A: We have about EUR780 million worth of proceeds to date and expect another EUR52 million from the land plot sale announced in July. The remaining proceeds will come from Ellinikon residential sales, progress payments, and reservation payments. For 2025, we anticipate launching the remaining units for Live Athens, totaling around 450 units.
Q: Are you expecting to draw any new debt for the Ellinikon Malls development in 2024 or 2025?
A: We have not drawn any debt for the Ellinikon project so far. We believe we will continue to see positive results and may have good news to communicate for 2025. For the Ellinikon Malls, we are finalizing debt arrangements with banks and expect the first drawdown towards the end of this year.
Q: Can you clarify the changes in inventory and land valuation, particularly regarding the office space above the malls?
A: The residential land plots are recorded as inventory at cost, which hides significant value. The recent sale of five land plots at EUR2,100 per square meter against a book value of EUR500 demonstrates this. The change in use of the area above the malls from offices to additional GLA for retail resulted in a one-time write-off.
Q: What rental growth can we expect in 2025 for the existing malls, given the strong tenant sales?
A: For 2025, leases expiring and renewing are expected to produce 16% more income. Approximately 34% of the total rental income is under negotiation for renewal in 2025.
Q: Will there be any reduction in rates for the Marina within the Ellinikon development to compensate for construction inconveniences?
A: We do not expect to reduce rates over the next few years. We are minimizing disturbances and believe the benefit of a new Marina post-construction will maintain rates.
Q: Can you provide a rough estimate of CapEx for the next 12 months?
A: CapEx for the first half of 2024 was approximately EUR104 million, implying a run rate of EUR200 million. This will accelerate towards the end of the year and into 2025 due to increased residential and infrastructure works.
Q: Is there a probability of a transaction involving the sale of one of the four operating malls in the next 12 months?
A: We are taking an opportunistic approach. The market has not been favorable, and we do not need to do a transaction. We will consider market conditions and interest rate cuts to maximize shareholder returns.
Q: Can you explain the EUR7 million gain from the fair value adjustment of investment properties in the P&L?
A: The gain includes the valuation of the area previously planned for offices above the malls, now converted to retail GLA. The technical write-off of EUR25-26 million from this change diluted the overall positive valuation gains.
Q: Where can we see the EUR44 million invested in Ellinikon infrastructure works in the cash flow statement?
A: We can provide detailed information offline to direct you to the relevant data.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
