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

Globalworth Real Estate InvestmentsAnnouncement

30/08/2024 07:00

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RNS Number : 2310C  Globalworth Real Estate Inv Ltd  30 August 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

 

30 August 2024

Globalworth Real Estate Investments Limited

("Globalworth" or the "Company")

Notice of Interim Results & Preliminary Interim Financial Information

Globalworth plans to publish its Interim Report and Financial Statements for
the six months ending 30 June 2024 during the week commencing 23 September
2024. In advance, we are releasing unaudited preliminary financials.

Key Highlights for the period ended 30 June 2024

·    Portfolio Value: The total combined portfolio value dropped by 8.3%
to €2.7 billion, primarily due to the disposal of non-core assets (which led
to a decrease of 7.6% of Combined Portfolio Value) and small negative
revaluation adjustments.

·    Commercial Properties: Like-for-like appraised value of standing
commercial properties slightly decreased to €2.5 billion, down 0.8% from 31
December 2023.

·    Divestments: Several sales of non-core assets were completed with the
objective to reduce debt and boost liquidity:

-       In Q1, we sold Bliski Centrum in Warsaw, a 4.9k sqm office
property, which we deemed a non-core asset due to its smaller size.

-       In May, we sold our fully owned Romanian logistics portfolio to
CTP for net proceeds of €72.4 million (after standard adjustments).

-       Post-June, we sold our remaining Romanian logistics interests,
held through joint ventures, to WDP, for net proceeds of €56.0 million
(after standard adjustments).

·    Portfolio Footprint: Net reduction of 239.5k sqm, bringing our
standing-portfolio footprint down to 1.1 million sqm across 59 properties.

·    Leasing: 90.1k sqm of commercial space leased or extended, with an
average WALL of 4.8 years, despite tough market conditions.

·    Occupancy: The average occupancy of our combined commercial portfolio
dropped to 86.1%, down 2.1pps from year-end 2023, impacted by:

-       The sale of non-core assets having average occupancy higher than
portfolio average.

-       The addition of newly refurbished property of Supersam
(Katowice, Poland).

-       A like-for-like occupancy decrease by 0.5pps, mainly due to
excess supply in Regional Polish submarkets.

·    Contracted Rent: Annualised contracted rent fell by 4.4% to €192.3
million, driven by asset disposals.

-       95.0% of the rent comes from office and mixed-use properties.

-       95.3% of contracted rent is active, with the remainder to
commence

·    Rent Increases: Like-for-like annualised commercial rents in our
standing portfolio rose by 3.1% to €182.6 million by the end of H1-2024.

·    Credit Ratings: In July 2024, Fitch reaffirmed Globalworth's
investment grade rating and upgraded the outlook to stable. S&P maintained
our BB+ rating with a negative outlook throughout H1-2024.

·    Debt Management: Net debt was reduced by €354.9 million, funded by
the Company's cash reserves:

-       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.

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

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

-       The Company drew down €25.5 million of asset-secured financing
on our Romanian portfolio.

·    Operating Income: Net Operating Income decreased by 1.8% year-on-year
to €72.4 million.

-       Like-for-like net operating income, excluding disposals, fell by
2.0% to €67.5 million, reflecting lower occupancy in our Regional Polish
submarkets.

·    Finance Costs: Increased by €20.4 million year-on-year, including
€12.8 million in non-recurring costs related to the refinancing of the 2025
and 2026 Notes in April 2024.

·    Earnings: EPRA earnings dropped by €4.4 million to €29.8 million
(H1-2023: €34.2 million), impacted mainly by asset disposals and higher
finance costs.

·    EBITDA: Adjusted normalised EBITDA decreased by 3.6% to €63.6
million (H1-2023: €66.0 million).

·    Equity: Loss attributable to equity holders rose to €65.3 million
(H1-2023: loss of €25.1 million), driven by:

-       A fair value loss of €50.5 million on investment property.

-       A €24.1 million loss from subsidiary sales and a €13.2
million share of loss from joint venture investments.

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

·    Dividends: Scrip Dividend Shares covering 98.65% of total share
capital were issued in April 2024, with an interim cash dividend of €0.4m
(€0.11 per share) paid to the remaining shareholders in H1-2024.

·    Valuation: Preliminary EPRA Net Reinstatement Value (NRV) stands at
€1.7 billion (€6.24 per share), a 10% 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 €0.18 from the 13.9 million new scrip dividend shares issued in
H1-2024.

·    Earnings per Share: IFRS Earnings per share was -25 cents in H1-2024
(H1-2023: -11 cents).

·    Liquidity: We maintained a strong cash balance of €210.3 million as
of 30 June 2024 after net debt reduction of €354.9 million which was partly
funded from the existing cash resources of €396.3 million at 31 December
2023 and further disposal proceeds during H1-24.

·    LTV: Improved to 39.9% as of 30 June 2024 (from 42.2% on 31 December
2023) following divestments aimed at deleveraging and enhancing liquidity.

 

·    Sustainability:

-       €2.2 billion invested in 47 green certified properties within
our portfolio.

-       14 properties certified or recertified with BREEAM Very Good or
higher in the first six months of the year.

-       Issued the Group's sixth sustainable development report.

-       Maintained our "low-risk" rating by Sustainalytics at 11.1 and
"A" rating by MSCI.

 

INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2024

                                                                              30 June     30 June

                                                                               2024       2023

                                                                              Unaudited   Unaudited
                                                                              €'000       €'000
 Revenue                                                                      125,034     119,050
 Operating expenses                                                           (52,652)    (45,306)
 Net operating income                                                         72,382      73,744
 Administrative expenses                                                      (9,287)     (7,755)
 Fair value loss on investment property                                       (50,527)    (102,884)
 Share-based payment expense                                                  (167)       (167)
 Loss on disposal of subsidiary                                               (24,111)    (164)
 Depreciation and amortisation expense                                        (404)       (289)
 Other expenses                                                               (1,204)     (1,182)
 Other income                                                                 1,162       2,215
 Foreign exchange loss                                                        (249)       (569)
 Gain/ (Loss) from fair value of financial instruments at fair value through  1,368       (121)
 profit or loss
 Loss before net financing cost                                               (11,037)    (37,172)
 Finance cost                                                                 (48,386)    (27,945)
 Finance income                                                               7,528       18,224
 Share of (loss)/ profit of equity-accounted investments in joint ventures    (13,198)    2,613
 Loss before tax                                                              (65,093)    (44,280)
 Income tax (expense)/ income                                                 (154)       19,701
 Loss for the period                                                          (65,247)    (24,579)
 Items that will not be reclassified to profit or loss
 Gain on equity instruments designated at fair value through other            90          -
 comprehensive income
 Other comprehensive income for the period, net of tax                        90          -
 Total comprehensive income for the period                                    (65,157)    (24,579)

 Loss attributable to:                                                        (65,247)    (24,579)
 -      ordinary equity holders of the Company                                (65,292)    (25,078)
 -      non-controlling interests                                             45          499

 Total comprehensive income attributable to:                                  (65,157)    (24,579)
 -      ordinary equity holders of the Company                                (65,202)    (25,078)
 -      non-controlling interests                                             45          499

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2024

                                                                30 June     31 December

                                                                2024        2023

                                                                Unaudited   Audited

                                                                €'000       €'000
 ASSETS
 Investment property                                            2,610,785   2,843,085
 Goodwill                                                       12,039      12,039
 Advances for investment property                               6,682       7,175
 Investments in joint-ventures                                  57,096      70,098
 Equity investments                                             7,993       7,844
 Other long-term assets                                         1,997       1,780
 Other receivables                                              22,479      21,182
 Prepayments                                                    129         448
 Financial assets at fair value through profit or loss          3,576       -
 Deferred tax asset                                             1,736       1,423
 Non-current assets                                             2,724,512   2,965,074

 Financial assets at fair value through profit or loss          -           197
 Trade and other receivables                                    21,389      23,122
 Contract assets                                                4,801       6,985
 Guarantees retained by tenants                                 55          99
 Income tax receivable                                          78          1,084
 Prepayments                                                    5,238       2,002
 Cash and cash equivalents                                      210,283     396,259
 Current assets                                                 241,844     429,748
 Investment property held for sale                              35,500      50,352
 Total current assets                                           277,344     480,100
 Total assets                                                   3,001,856   3,445,174

 EQUITY AND LIABILITIES
 Issued share capital                                           1,796,809   1,769,456
 Treasury shares                                                (4,773)     (4,797)
 Fair value reserve of financial assets at FVOCI                (5,379)     (5,469)
 Retained earnings                                              (251,098)   (158,066)
 Equity attributable to ordinary equity holders of the Company  1,535,559   1,601,124
 Non-controlling interests                                      -           1,411
 Total equity                                                   1,535,559   1,602,535

 Interest-bearing loans and borrowings                          1,130,192   1,574,771
 Deferred tax liability                                         121,921     139,299
 Lease liabilities                                              23,598      20,482
 Deposits from tenants                                          3,693       3,774
 Guarantees retained from contractors                           2,664       2,902
 Trade and other payables                                       399         78
 Non-current liabilities                                        1,282,467   1,741,306

 Interest-bearing loans and borrowings                          118,281     28,609
 Guarantees retained from contractors                           4,540       5,594
 Trade and other payables                                       35,350      36,051
 Contract liability                                             2,352       3,289
 Other current financial liabilities                            -           1,311
 Current portion of lease liabilities                           2,191       1,956
 Deposits from tenants                                          17,746      18,018
 Income tax payable                                             242         807
 Current liabilities                                            180,702     95,635
 Liabilities directly associated with the assets held for sale  3,128       5,698
 Total current liabilities                                      183,830     101,333
 Total equity and liabilities                                   3,001,856   3,445,174

COMBINED CONSOLIDATED PORTFOLIO SNAPSHOT

AS AT 30 JUNE 2024

 

Our real estate investments are in Poland and Romania, the two largest markets
in the CEE. As at 30 June 2024, our portfolio was spread across 10 cities,
with Poland accounting for 52.3% by value and Romania 47.7%.

 

 Combined Portfolio Snapshot (as at 30 June 2024)
                                 Poland                    Romania                   Combined Portfolio
 Standing Investments((1))       18                        16                        34
 GAV((2)) / Standing GAV (€m)    €1,437m / €1,319m         €1,310m / €1,242m         €2,747m / €2,561m
 Occupancy                       76.1%                     94.9%                     86.1%
 WALL((3))                       4.0 years                 5.3 years                 4.7 years
 Standing GLA (k sqm)((4))       530.2k sqm                616.3k sqm                1,146.5 sqm
 Contracted Rent (€m)((5))       €95.2m                    €97.0m                    €192.3m
 GAV Split by Asset Usage
    Office                       80.8%                     86.0%                     83.3%
    Mixed-Use                    19.2%                     0.0%                      10.0%
    Industrial                   0.0%                      7.4%                      3.5%
    Others                       0.0%                      6.5%                      3.1%
 GAV Split by City
    Bucharest                    0.0%                      93.3%                     44.5%
    Constanta                    0.0%                      5.0%                      2.4%
    Targu Mures                  0.0%                      1.3%                      0.6%
    Craiova                      0.0%                      0.4%                      0.2%
    Warsaw                       42.8%                     0.0%                      22.4%
    Krakow                       20.5%                     0.0%                      10.7%
    Wroclaw                      17.3%                     0.0%                      9.0%
    Katowice                     11.5%                     0.0%                      6.0%
    Lodz                         4.2%                      0.0%                      2.2%
    Gdansk                       3.7%                      0.0%                      1.9%
 GAV as % of Total               52.3%                     47.7%                     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 2024.
 3. Includes pre-let commercial standing and development/re-development assets.
 WALL of standing commercial properties in Poland, Romania and the Combined
 portfolio are 4.0 years, 5.3 years and 4.6 years, respectively.
 4. Including 12.6k sqm of residential assets in Romania.
 5. Total rent comprises commercial (€185.8 million) and residential (€0.4
 million in Romania) standing properties, rent in assets under redevelopment
 (€5.7 million in Poland) and development pre-lets (€0.4 million in
 Romania).

 

Note: Occupancy of standing commercial properties adjusted with the active
leases related to our ESG-commitments (3,460 sqm in BOB Tower, Bucharest,
signed with social assistance authority) and with the available area of the
spaces leased to GW Flex Sp. Z.o.o, our group entity overseeing the
implementation of flex offices concept in our portfolio, was 75.4%, 94.5% and
85.6% as of 30 June 2024 for Poland, Romania and at group level, respectively

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 and industrial real estate
assets in prime locations, generating rental income from high quality tenants
from around the globe. Managed by over 250 professionals across Cyprus,
Guernsey, Poland and Romania the combined value of its portfolio is €2.7
billion, as at 30 June 2024. Approximately 97.3% 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, Targu Mures and
Craiova.

 

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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