REG - Globalworth Real Est - Notice of Interim Results & Prelim Interim Info

Globalworth Real Estate InvestmentsAnnouncement

31/08/2022 07:00

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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 2022

                                                                             30 June     30 June

                                                                              2022       2021

                                                                             Unaudited   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  73          (243)
 profit or loss
 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           36          -
 comprehensive income
 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 2022

                                                                30 June     31 December 2021

                                                                2022        Audited

                                                                Unaudited   €'000

                                                                €'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 (http://www.globalworth.com)
or contact:

Enquiries

Stamatis Sapkas
 
      Tel: +40 732 800 000

Chief Financial 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 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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