REG - Globalworth Real Est - Condensed Unaudited Results for FY 31 Dec 2024

Globalworth Real Estate InvestmentsAnnouncement

11/03/2025 07:15

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RNS Number : 0929A  Globalworth Real Estate Inv Ltd  11 March 2025

This announcement contains inside information.

 

11 March 2025

 

Globalworth Real Estate Investments Limited

("Globalworth" or the "Company")

Preliminary Unaudited Financial Results for the year ended 31 December 2024

Globalworth, the leading office investor in Central and Eastern Europe, is
pleased to provide a comprehensive update of its operations, along with a
preliminary release of its unaudited Consolidated Financial Statements for the
year ended 31 December 2024.

 

The Company intends to announce its audited Financial Results for the year
ended 31 December 2024 and publish its 2024 Annual Report towards the end of
March 2025.

 

Dennis Selinas, Chief Executive Officer of Globalworth,
commented: "Throughout 2024, Globalworth has successfully achieved key
milestones aimed at strengthening our business and improving our financial
profile. Our performance remained robust as we have continued to focus on
core-business resilience by implementing our "local landlord" approach."

 

 

Operational Highlights

 

·    Portfolio Value: The total combined portfolio value stood at €2.6
billion, 13.2% lower compared to the end of previous year, mainly impacted by
the disposal of non-core assets

o  Like-for-like appraised value of standing commercial properties slightly
decreased to €2.4 billion, down 1.6% from 31 December 2023

 

·    Divestments: We have successfully divested our interests in non-core
assets with the aim of deleveraging and enhancing liquidity:

o  During the first quarter, we sold Bliski Centrum in Warsaw, a 4.9k sqm
office property, which we deemed a non-core asset due to its smaller size

o  In May, we sold our fully owned Romanian logistics portfolio comprising
facilities located in Timisoara, Arad, Oradea and Pitesti as well as a
majority stake in two small business units in Bucharest

o  Furthermore, in July, we disposed of our 50% share in logistic assets in
Romania which were owned via joint venture companies

 

·    Standing Portfolio Footprint: Net reduction of 372.0k sqm, bringing
our standing-portfolio footprint down to 1.0 million sqm across 56 properties

 

·    Leasing: 162.9k sqm of commercial space leased or extended, with an
average WALL of 5.4 years, despite continued challenging market conditions

 

·    Commercial Occupancy: The average occupancy of our combined standing
portfolio was 86.7% as of 31 December 2024, down 1.5% from 2023 year-end,
mainly driven by the sale of non-core assets having average occupancy higher
than portfolio average.

o  Like-for-like occupancy slightly increased by 0.8pps, thanks to positive
evolutions for the assets that we own in Bucharest and Warsaw

 

·    Contracted Rent: Annualised contracted rents decreased by 6.8% to
€187.5 million, driven by asset disposals

o  Like-for-like annualised commercial contracted rents in our portfolio
increased by 4.5% to €177.6 million, mainly as effect of rent indexation

o  99.3% of the rent comes from office and mixed-use properties

o  96.9% of contracted rent is active on 31 December 2024, with the remainder
to commence in the future

 

·    Credit Ratings: In July, Fitch reaffirmed Globalworth's investment
grade rating and upgraded the outlook to stable. S&P maintained our BB+
rating with a negative outlook throughout the year.

 

·    Sustainability:

o  51 green-certified properties with a total value of €2.4 billion in our
portfolio

o  We have certified or recertified 36 properties during the year with BREEAM
Excellent, LEED Gold or higher certifications

o  Issued the Group's sixth sustainable development report

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

 

 

Financial Highlights

 

·    Debt Management: Net debt was reduced by €292.5 million

o  In April 2024, we successfully refinanced €450 million 2025 Notes and
€400 million 2026 Notes with new 6.25% Notes due in 2029 (€307 million)
and 2030 (€333 million) via an Exchange Offer and Consent Solicitation.

o  As part of the exchange, we repaid €143 million of 2025 Notes and €67
million of 2026 Notes in cash.

o  Following the sale of our fully owned Romanian industrial portfolio to
CTP, €97.5 million secured loans were derecognized and €65 million Notes
(€45 million of 2029 Notes and €20 million of 2030 Notes) were repaid.

o  In July, we conducted a Bond Buy Back exercise and repurchased €38.2
million of 2029 Notes and €45 million of 2030 Notes by paying a total price
of €80.3 million plus the accrued interest.

o  The Company drew down €163 million of asset-secured financing on our
Romanian portfolio.

·    Operating Income: Net Operating Income decreased by 2.2% year-on-year
to €143.7 million.

o  Like-for-like net operating income, excluding disposals, grew by 3.9% to
€137.6 million, reflecting higher occupancy in our properties in Romania
offset by lower occupancies in our Regional Polish submarkets.

·    Finance Costs: Increased by €23.4 million year-on-year, including
€12.1 million in non-recurring costs related to the refinancing of the 2025
and 2026 Notes in April 2024.

·    Finance Income: During 2024 we recorded €12.1 million as finance
income, including €7.7 million interest earned on cash deposits (2023:
€3.8 million), representing an increase of €4.3 million compared with
prior year, excluding the one-off net gain from Notes Buy-backs (€0.4
million in 2024, €15.8 million in 2023).

·    Earnings: EPRA earnings dropped by €5.2 million to €56.1 million
(2023: €61.3 million), impacted mainly by asset disposals and higher finance
costs.

o  On a like-for-like basis, excluding divested non-core assets, EPRA
earnings improved by €1.0 million (or 1.8%).

·    EBITDA: Adjusted normalised EBITDA decreased by 3.9% to €126.2
million (2023: €131.4 million).

o  On a like-for-like basis, excluding divested non-core assets, Adjusted
EBITDA improved by €2.8 million (or 2.4% increase).

·    Equity: Loss attributable to equity holders rose to €81.6 million
(2023: loss of €54.2 million), driven by:

o  A fair value loss of €99.8 million on investment property.

o  A €24.6 million loss from subsidiary sales and a €8.4 million share of
loss from joint venture investments.

o  In 2023, we recorded a one-off finance net gain of €15.8 million from
bond buybacks at a discounted price.

·    Dividends: Scrip Dividend elections representing an average of 98.4%
of total share capital were received in April and October 2024, with total
cash dividends of €0.8 million (€0.21 per share) paid to the remaining
shareholders.

·    Valuation: Preliminary EPRA Net Reinstatement Value (NRV) stands at
€1.76 billion (€5.89 per share), 15.3% decrease per share from €6.94 as
of 31 December 2023. This reduction is due to revaluation losses on the
property portfolio, losses from joint venture investments, and the dilutive
impact of €0.66 per share from the 26.5 million new scrip dividend shares
issued in 2024.

o  We revalue 100% of the portfolio every six months period. For 2024,
Portfolio value on like-for-like basis decreased by 1.6%: Romania increased by
1.3% (€14.3 million), Poland decreased by 4.0% (€58.4 million), with a
2.6% decrease (€38.4 million) in Regional properties and 3.0% (€23.6
million) in Warsaw.

o  Total investment in our portfolio during 2024 was €60 million (capex,
tenant fitouts and improvements).

o  These movements largely account for the €99.8 million loss in the income
statement during 2024.

·    Earnings per Share: IFRS Earnings per share was -31 cents in 2024
(2023: -22 cents).

·    Liquidity: We maintained a strong cash balance of €333.6 million as
of 31 December 2024 (€396.3 million on 31 December 2023) providing several
strategic opportunities for future.

·    LTV: Significant improvement in LTV to 38.1% as of 31 December 2024
(from 42.2% on 31 December 2023) following divestments aimed at deleveraging
and enhancing liquidity.

 

 

Outlook

For the year ahead, we stay cautiously optimistic, as we are witnessing
positive signs from both a macroeconomic perspective and from the real estate
markets that we operate in. Nevertheless, we are aware that trade frictions
and geopolitical risks will continue to weigh on the prospects of CEE
economies.

 

We resolutely believe that offices will continue to be an integral part of
business life by bringing a sense of belonging to professionals across the
world. Our focus on state-of-the-art, sustainable spaces that facilitate and
enhance the success of our partners will continue to be aligned with
initiatives aimed at financial strengthening and portfolio efficiency and
optimization.

 

 

 

Consolidated statement of comprehensive income

For the year ended 31 December 2024

 

                                                                                  31 December  31 December

                                                                                  2024         2023

                                                                                  €'000        €'000
 Revenue                                                                          238,268      240,429
 Operating expenses                                                               (94,610)     (93,471)
 Net operating income                                                             143,658      146,958
 Administrative expenses                                                          (17,962)     (15,948)
 Fair value loss on investment property                                           (99,839)     (164,908)
 Share-based payment expense                                                      (352)        (502)
 Loss on disposal of subsidiary                                                   (24,623)     (474)
 (Loss)/Profit on disposal of investment property                                 (321)        9,579
 Depreciation and amortisation expense                                            (876)        (588)
 Other expenses                                                                   (4,693)      (2,916)
 Other income                                                                     1,386        2,056
 Foreign exchange loss                                                            (828)        (1,533)
 Loss from fair value of financial instruments at fair value through profit or    (3,206)      (1,393)
 loss
 Loss before net financing cost                                                   (7,656)      (29,669)
 Finance cost                                                                     (80,589)     (57,146)
 Finance income                                                                   12,123       23,220
 Share of (loss)/profit of equity-accounted investments in joint ventures         (8,443)      2,063
 Loss before tax                                                                  (84,565)     (61,532)
 Income tax income                                                                2,991        7,692
 Loss for the year                                                                (81,574)     (53,840)
 Items that will not be reclassified to profit or loss
 Gain on equity instruments designated at fair value through other                90           -
 comprehensive income
 Total comprehensive income for the year                                          (81,484)     (53,840)

 

 Loss attributable to:                          (81,574)  (53,840)
 - ordinary equity holders of the Company       (81,619)  (54,152)
 - non-controlling interests                    45        312

 Total comprehensive income attributable to:    (81,484)  (53,840)
 - ordinary equity holders of the Company       (81,529)  (54,152)
 - non-controlling interests                    45        312

 Earnings per share (€ cents)                             Restated*
 - Basic                                        (31.0)    (22)
 - Diluted                                      (31.0)    (22)

 

*     The IFRS earnings per share for the year 2023 have been restated
following the IAS 33 'Earnings per share' requirements regarding accounting
for scrip dividend shares issued in 2024.

 

Consolidated statement of financial position

As of 31 December 2024

 

 

 

                                      2024       2023

                                      €'000      €'000

 Assets
 Investment property                  2,585,345  2,843,085
 Goodwill                             12,039     12,039
 Advances for investment property     3,625      7,175
 Investments in joint ventures        3,960      70,098
 Equity investments                   8,010      7,844
 Other long-term assets               1,765      1,780
 Other receivables                    -          21,182
 Prepayments                          259        448
 Non- current financial assets        3,067      -
 Deferred tax asset                   2,629      1,423
 Non-current assets                   2,620,699  2,965,074

 Trade and other receivables          51,351     23,122
 Contract assets                      5,702      6,985
 Guarantees retained by tenants       97         99
 Income tax receivable                118        1,084
 Prepayments                          2,447      2,002
 Current financial assets             -          197
 Cash and cash equivalents            333,560    396,259
                                      393,275    429,748
 Investment property held for sale    35,763     50,352
 Total current assets                 429,038    480,100
 Total assets                         3,049,737  3,445,174

 

 

                                                                  2024       2023

                                                                  €'000      €'000

 Equity and liabilities
 Issued share capital                                             1,822,934  1,769,456
 Treasury shares                                                  (4,752)    (4,797)
 Share-based payment reserve                                      185        -
 Retained earnings                                                (294,036)  (158,066)
 Fair value reserve of financial assets at FVOCI                  (5,379)    (5,469)
 Equity attributable to ordinary equity holders of the Company    1,518,952  1,601,124
 Non-controlling interests                                        -          1,411
 Total equity                                                     1,518,952  1,602,535

 Interest-bearing loans and borrowings                            1,178,250  1,574,771
 Deferred tax liability                                           118,184    139,299
 Lease liabilities                                                24,414     20,482
 Deposits from tenants                                            3,517      3,774
 Guarantees retained from contractors                             2,977      2,902
 Trade and other payables                                         399        78
 Non-current liabilities                                          1,329,623  1,741,306

 Interest-bearing loans and borrowings                            132,581    28,609
 Guarantees retained from contractors                             4,774      5,594
 Trade and other payables                                         38,048     36,051
 Contract liability                                               320        3,289
 Other current financial liabilities                              -          1,311
 Current portion of lease liabilities                             1,946      1,956
 Deposits from tenants                                            19,536     18,018
 Income tax payable                                               816        807
                                                                  198,021    95,635
 Liabilities directly associated with the assets held for sale    3,141      5,698
 Total current liabilities                                        201,162    101,333
 Total equity and liabilities                                     3,049,737  3,445,174

 

 

Combined consolidated portfolio snapshot

As of 31 December 2024

 

Our real estate investments are in Poland and Romania, the two largest markets
in the CEE. As of 31 December 2024, our portfolio was spread across 9 cities,
with Poland accounting for 54.0% by value and Romania 46.0%.

 

 Combined Portfolio Snapshot (as of 31 December 2024)
                                 Poland                    Romania                   Combined Portfolio
 Standing Investments((1))       18                        14                        32
 GAV((2)) / Standing GAV (€m)    €1,404m / €1,287m         €1,196m / €1,162m         €2,600m / €2,449m
 Occupancy((3))                  77.8%                     96.8%                     86.7%
 WALL((4))                       3.9 years                 5.3 years                 4.6 years
 Standing GLA (k sqm)((5))       530.4k sqm                483.6k sqm                1,014.0 sqm
 Contracted Rent (€m)((6))       €97.4m                    €90.1m                    €187.5m
 GAV Split by Asset Usage
    Office                       80.5%                     95.3%                     87.3%
    Mixed-Use                    19.5%                     0.0%                      10.5%
    Other                        0.0%                      4.7%                      2.2%
 GAV Split by City
    Bucharest                    0.0%                      98.9%                     45.5%
    Constanta                    0.0%                      0.7%                      0.3%
    Craiova                      0.0%                      0.4%                      0.2%
    Warsaw                       42.7%                     0.0%                      23.0%
    Krakow                       20.1%                     0.0%                      10.8%
    Wroclaw                      17.4%                     0.0%                      9.4%
    Katowice                     11.7%                     0.0%                      6.3%
    Lodz                         4.3%                      0.0%                      2.3%
    Gdansk                       3.9%                      0.0%                      2.1%
 GAV as % of Total               54.0%                     46.0%                     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 2024. Assets owned under JV are presented at 100% (e.g. Constanta
 Business Park).
 3. Occupancy of standing commercial properties adjusted with the active leases
 related to our ESG commitments (1,954 sqm in BOC Tower, Bucharest) and with
 the available area of the spaces leased to GW Flex Sp. Z.o.o, was 76.5%, 96.4%
 and 85.9% as of 31 December 2024 for Poland, Romania and at group level,
 respectively.

 4. Includes pre-let commercial standing and development/re-development assets.
 5. Including 10.2k sqm of residential assets in Romania.
 6. Total rent comprises commercial (€181.2 million) and residential (€0.3
 million in Romania) standing properties and rent from assets under
 redevelopment (€6.1 million in Poland).

 

 

 

 

 

For further information visit www.globalworth.com (http://www.globalworth.com)
or contact:

Enquiries

 Rashid Mukhtar                                   Tel: +40 732 800 000

 Group CFO

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

 Atholl Tweedie

 

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 properties in prime
locations, generating rental income from reputed tenants from around the
globe. Managed by over 250 professionals across Cyprus, Guernsey, Poland and
Romania the combined value of its portfolio is €2.6 billion, as at 31
December 2024. Approximately 98.5% of the portfolio is in income-producing
assets, predominately in the office sector, and leased to a diversified array
of over 650 national and multinational corporates. In Poland Globalworth is
present in Warsaw, Wroclaw, Lodz, Krakow, Gdansk and Katowice, while in
Romania its assets span Bucharest, Constanta and Craiova.

 

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