REG - Globalworth Real Est - Condensed Unaudited Results for FY 31 Dec 2021

Globalworth Real Estate InvestmentsAnnouncement

04/03/2022 07:00

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RNS Number : 6035D  Globalworth Real Estate Inv Ltd  04 March 2022

The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014. Upon the publication of this announcement, this information is
considered to be in the public domain.

4 March 2022

Globalworth Real Estate Investments Limited

("Globalworth" or the "Company")

Condensed Unaudited Financial Results for the year ended 31 December 2021

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 2021.

The Company intends to announce its audited Financial Results for the year
ended 31 December 2021 and publish its 2021 Annual Report towards the end of
March 2022.

The Company will continue to report under International Financial Reporting
Standards as adopted by the European Union ("EU IFRS"), as it has done since
incorporation. As such, the condensed Unaudited Financial Results have been
prepared under EU IFRS, as will the audited Financial Results for the year
ended 31 December 2021 in due course.

Key Highlights for the year ended 31 December 2021

·      Total combined portfolio value up by 3.9% to €3.2 billion.

·      Focused development program in select high-quality projects.

o  Romania; delivered a class "A" office comprising 29.2k sqm of GLA, with 5
logistics facilities under development which are expected to have a total GLA
of 98.9k sqm

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

·      Acquired two high-quality logistics facilities in Romania, with a
total area of 27.0k sqm, for €17.9 million.

·      Overall standing portfolio net increase of 2.4% to 1.3m sqm of
GLA in 66 standing buildings.

·      Leasing transactions of 285.5k sqm of commercial space at an
average WALL of 4.6 years, registering our second highest yearly volume to
date.

·      Average standing occupancy of 88.5% (88.7% including tenant
options), lower by 2.3% compared to 31 December 2020.

·      Total annualised contracted rent up by 0.2% to €183.7m, of
which 91.4% from office and industrial properties.

·      Rate of collections invoiced and due remained high at 99.0% for
2021.

·      Net Operating Income was lower by 8.3% compared to 2020 at
€144.3 million.

·      EPRA earnings decreased by 28.2% to €59.1 million (2020:
€82.3 million), partially 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 8.1% to €130.2 million
(2020: €141.6 million), due to lower NOI, as offset by the positive impact
of the €1.6 million (10.2% lower compared to 2020) savings in recurring
administrative expenses(1).

·      Net profit significantly improved to €47.5 million (2020: net
loss of €46.8 million) due to marginal revaluation losses of €5.7 million
in 2021 compared to the €116.2 million revaluation losses in 2020.

·      Cash dividend paid to shareholders of €0.30 per share in 2021.

·      Preliminary EPRA Net Reinstatement Value (NRV) of €1.9 billion,
or €8.66 per share, a marginal decrease from €8.68 at 31 December 2020
mainly due to dividends paid, lower operating performance and non-recurring
costs, offsetting the positive impact of lower revaluation losses (by €110.4
million compared to 2020).

·      High liquidity of €418.7 million (vs €527.8 million at 2020
year-end) plus €215 million in undrawn RCF facility, and an LTV at 40.1% at
31 December 2021 (vs 37.8% at 2020 year-end).

·      Maintained investment grade rating by all three major rating
agencies, improving our outlook to "Stable" (from "Negative) by Moody's.

·      Sustainability:

o  €2.7 million in 55 green certified properties

o  Several green initiatives completed or in progress to improve our
footprint.

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

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

o  Contributed €1.0 million to support 18 initiatives in Romania and
Poland.

·      The consortium of CPI Property Group and Aroundtown became the
controlling shareholders of Globalworth with 60.6% of the share capital.

 

(1) Recurring administrative expenses for 2021 exclude €11.5 million
exceptional and non-recurring costs incurred in connection with the cash offer
for Globalworth shares, made by CPI Property Group S.A. and Aroundtown SA
(through Zakiono Enterprises Limited) in May 2021 (non-recurring expenses for
2020: €2.3 million).

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2021

 

                                                                                      31 December  31 December
                                                                                2021  2020
                                                                                      €'000        €'000
 Revenue                                                                              219,350      223,309
 Operating expenses                                                                   (75,098)     (66,031)
 Net operating income                                                                 144,252      157,278
 Administrative expenses                                                              (25,622)     (17,986)
 Acquisition costs                                                                    -            (2,689)
 Fair value loss on investment property                                               (5,738)      (116,153)
 Share-based payment expense                                                          (532)        (1,071)
 Depreciation and amortisation expense                                                (536)        (466)
 Other expenses                                                                       (1,851)      (2,565)
 Other income                                                                         1,051        494
 Foreign exchange gain/(loss)                                                         214          (395)
 Loss from fair value of financial instruments at fair value through profit or        (386)        (47)
 loss
 Profit before net financing cost                                                     110,852      16,400
 Finance cost                                                                         (55,539)     (51,140)
 Finance income                                                                       1,749        2,383
 Share of profit of equity-accounted investments in joint ventures                    5,010        1,897
 Profit/(loss) before tax                                                             62,072       (30,460)
 Income tax expense                                                                   (14,583)     (16,335)
 Profit/(loss) for the year                                                           47,489       (46,795)
 Other comprehensive income                                                           -            -
 Total comprehensive income                                                           47,489       (46,795)
 Profit/(loss) attributable to equity holders of the Company                          47,489       (46,795)

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2021

                                                            2021       2020

                                                            €'000      €'000
 ASSETS
 Non-current assets
 Investment property                                        2,966,080  3,013,014
 Goodwill                                                   12,349     12,349
 Advances for investment property                           3,436      4,215
 Investments in joint ventures                              48,908     28,358
 Equity investments                                         12,109     10,369
 Other long-term assets                                     2,083      2,148
 Prepayments                                                338        432
 Deferred tax asset                                         151        786
 Non-current assets                                         3,045,454  3,071,671

 Financial assets at fair value through profit or loss      7,324      7,695
 Trade and other receivables                                16,208     16,025
 Contract assets                                            6,106      2,819
 Guarantees retained by tenants                             885        894
 Income tax receivable                                      117        931
 Prepayments                                                2,104      2,227
 Cash and cash equivalents                                  418,748    527,801
                                                            451,492    558,392
 Investment property held for sale                          130,537    -
 Total current assets                                       582,029    558,392
 Total assets                                               3,627,483  3,630,063
 EQUITY AND LIABILITIES
 Equity
 Issued share capital                                       1,704,476  1,704,374
 Treasury shares                                            (4,917)    (12,977)
 Share-based payment reserve                                156        6,184
 Retained earnings                                          38,914     57,783
 Total equity                                               1,738,629  1,755,364

 Interest-bearing loans and borrowings                      1,285,641  1,604,043
 Deferred tax liability                                     150,713    144,843
 Lease liabilities                                          18,762     27,324
 Guarantees retained from contractors                       2,661      2,235
 Deposits from tenants                                      3,844      3,449
 Trade and other payables                                   956        692
 Non-current liabilities                                    1,462,577  1,782,586

 Interest-bearing loans and borrowings                      348,279    26,051
 Guarantees retained from contractors                       3,361      4,032
 Trade and other payables                                   39,788     40,209
 Contract liability                                         1,940      2,088
 Other current financial liabilities                        261        875
 Provision for tenant lease incentives                      -          46
 Current portion of lease liabilities                       1,303      1,765
 Deposits from tenants                                      16,068     16,245
 Income tax payable                                         550        802
                                                            411,550    92,113
 Liabilities directly associated with the assets            14,727     -

 held for sale
 Total current liabilities                                  426,277    92,113
 Total equity and liabilities                               3,627,483  3,630,063

COMBINED CONSOLIDATED PORTFOLIO SNAPSHOT

AS AT 31 DECEMBER 2021

Our real estate investments are in Poland and Romania, the two largest markets
in the CEE. As at 31 December 2021, our portfolio was spread across 12 cities,
with Poland accounting for 51.2% by value and Romania 48.8%.

 

 Combined Portfolio Snapshot
                                 Poland                 Romania                               Combined Portfolio
 Standing Investments((1))       19                     20                                    39
 GAV((2)) / Standing GAV (€m)    €1,613m / €1,447m      €1,540m / €1,419m                     €3,152m / €2,866m
 Occupancy((3))                  85.6%                  90.7%                                 88.5%
                                                        (91.0% including tenant options)      (88.7% including tenant options)
 WALL((4))                       3.9 years              5.5 years                             4.7 years
 Standing GLA (k sqm)((5))       542.1k sqm             760.2k sqm                            1,302.3k sqm
 Contracted Rent (€m)((6))       €94.7m                 €89.0m                                €183.7m
 GAV Split by Asset Usage
    Office                       82.8%                  77.4%                                 80.2%
    Mixed-Use                    17.2%                  0.0%                                  8.8%
    Industrial                   0.0%                   13.4%                                 6.6%
    Others                       0.0%                   9.1%                                  4.5%
 GAV Split by City
    Bucharest                    -                      85.6%                                 41.8%
    Timisoara                    -                      5.8%                                  2.8%
    Pitesti                      -                      3.6%                                  1.7%
    Constanta                    -                      3.6%                                  1.8%
    Arad                         -                      1.1%                                  0.5%
    Oradea                       -                      0.4%                                  0.2%
    Warsaw                       44.4%                  -                                     22.7%
    Krakow                       21.2%                  -                                     10.8%
    Wroclaw                      15.9%                  -                                     8.2%
    Katowice                     10.8%                  -                                     5.5%
    Lodz                         4.2%                   -                                     2.2%
    Gdansk                       3.5%                   -                                     1.8%
 GAV as % of Total               51.2%                  48.8%                                 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 2021.
 3. Occupancy of standing commercial properties, and in the case of Poland,
 including office rental guarantees.
 4. Includes pre-let commercial standing and development assets. WALL of
 standing commercial properties in Romania, Poland and the Combined portfolio
 are 5.4 years, 3.9 years and 4.7 years, respectively.
 5. Including 30.3k sqm of residential assets in Romania.
 6. Total rent comprises commercial (€174.5 million) and residential (€0.9
 million in Romania) standing properties, which includes contracted rent under
 master lease agreement, rent in assets under redevelopment (€6.8 million in
 Poland) and development pre-lets (€1.5 million in Romania).

 

 

 Annualised Commercial Portfolio Lease Expiration Profile
 Year         2022   2023  2024   2025  2026   ≥2027    Total
 € million    18.8   16.1  30.3   17.4  20.7   79.3     182.8
 % of total   10.3%  8.8%  16.6%  9.5%  11.3%  43.4%    100%

 

 

 

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

Enquiries

Stamatis
Sapkas
Tel: +40 732 800 000

Deputy Chief Investment Officer

 

Panmure Gordon (Nominated Adviser and
Broker)                                Tel: +44
20 7886 2500

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 31 December 2021. Approximately 95.9% 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.

 

For more information, please visit www.globalworth.com
(http://www.globalworth.com) and follow us on Facebook, Instagram and
LinkedIn.

 

 

 

 

 

 

 

 

 

 

 

 

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