TIDMGWI
RNS Number : 7040K
Globalworth Real Estate Inv Ltd
29 August 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
29 August 2023
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 2023 during the week commencing 18 September 2023. 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 2023.
Key Highlights for the period ended 30 June 2023
-- Total combined portfolio value decreased by 2.5% to EUR3.1
billion, mainly due to revaluations and disposals
o Like-for-like appraised value of standing commercial
properties decreased to EUR2.8 billion (3.0% lower than 31 December
2022)
-- Developments focused on high-quality logistic /
light-industrial facilities in Romania (13.3k 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 our first logistic /
light-industrial project in Targu Mures adding 18.3k sqm of spaces
to our portfolio
-- Overall, the standing-portfolio footprint increased by a net
17.3k sqm to 1.4m sqm of GLA in 72 standing properties
-- Leasing transactions for 181.0k sqm of commercial space
taken-up or extended at an average WALL of 6.9 years were signed
despite continued challenging market conditions
-- Average standing occupancy of our combined commercial
portfolio of 85.5% (85.7% including tenant options), marginally
lower vs. year-end 2022 of 85.6% (85.9% including tenant
options)
o Average commercial standing occupancy, adjusted for Warta
Tower, which was sold in July and was vacant as of 30 June 2023,
was 87.7% (87.8% including tenant options)
o Like-for-like occupancy decreased marginally by 0.3% mostly
reflecting excess supply conditions in our Regional Polish
submarkets
-- Total annualised contracted rent increased by 6.8% to
EUR202.2 million compared to year-end 2022, of which:
o 91.5% is contracted in office and industrial properties
o 94.1% is in active leases, with the remainder 5.9% of
contracted annualised rent to commence in the future
-- Like-for-like annualised commercial contracted rents in our
standing commercial portfolio increased by 5.4% to EUR191.0 million
at the end of the first half of 2023 compared to 31 December 2022,
mainly the effect of rent indexation
-- Fitch Ratings re-affirmed, in July 2023, Globalworth's
investment grade rating and changed the outlook to negative
following their 2023 annual review of Globalworth. S&P
downgraded credit rating to BB+ with a stable outlook
-- Net debt reduction of EUR63.5m from the Company's cash resources:
o buyback of EUR100m nominal value of GWI Bond 18/25 with cash
consideration of EUR83.2m
o repayment of EUR60m of the RCF facility and
o drawdown of EUR96.5m of asset-secured financing secured by the
Company's Romanian logistics portfolio
-- Net Operating Income was higher by 5.6% compared to H1-2022 at EUR73.7 million
-- EPRA earnings decreased by 0.4% to EUR34.2 million (H1-2022:
EUR34.3 million), partially impacted by the operating results due
to higher administrative costs and higher income tax expense
(excluding deferred tax expense on investment property) compared to
the same period in 2022
-- Adjusted normalised EBITDA (including the share of minority
interests) increased by 4.1% to EUR66.0 million (H1-2022: EUR63.4
million), due to an increase in NOI partially offset by higher
administrative expenses
-- Loss attributable to equity holders of the Company of EUR25.1
million (H1-2022: profit of EUR32.6 million) mainly due to the fair
value loss of EUR103 million on investment property, which were
partially net of higher finance income and the decrease in the
income tax expense
-- Scrip Dividend Shares issued for 98.1% of the total share
capital in April 2023 and interim cash dividend paid to the rest of
the shareholders of EUR0.15 per share (total of EUR0.6m) in
H1-2023
-- Preliminary EPRA Net Reinstatement Value (NRV) of EUR1.8
billion, or EUR7.55 per share, an 8.9% per share decrease from
EUR8.29 on 31 December 2022 mainly due to the revaluation losses on
the property portfolio and the 14 million new scrip shares issued
in H1 2023
-- IFRS Earnings per share of minus 11 cents in H1-2023
(H1-2022: 15 cents) as a result of the negative impact of the
property revaluations recorded
-- Maintaining high levels of liquidity following the GWI 18/25
buyback at EUR130.5 million plus EUR265 million in undrawn RCF
facilities
-- Maintained an LTV of 42.7 % same as that of 31 December 2022,
despite the significant negative property revaluation during H1
2023
-- Sustainability:
o EUR2.4bn in 52 green certified properties in our portfolio
o 15 properties were certified or recertified with BREEAM Very
Good or higher certifications in the first 6 months
o Issued the fifth sustainable development report for the Group
o Maintained our "low-risk" rating by Sustainalytics and "A" rating by MSCI
o Our environmental target to reduce GHG emissions intensity by
46% by 2030 versus our baseline 2019 levels (for Scope 1 and 2) was
validated by the globally recognised Science Based Targets
initiative (SBTi)
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 20 23
30 June 30 June
2023 2022
Unaudited Unaudited
EUR'000 EUR'000
============================================================================ =================== =================
Revenue 119,050 116,551
Operating expenses (45,306) (46,696)
============================================================================ =================== =================
Net operating income 73,744 69,855
============================================================================ =================== =================
Administrative expenses (7,755) (6,484)
Acquisition costs - (7)
Fair value (loss)/gain on investment property (102,884) 7,019
Share-based payment expense (167) -
Loss on disposal of subsidiary (164) -
Depreciation and amortisation expense (289) (309)
Other expenses (1,182) (720)
Other income 2,215 295
Foreign exchange (loss)/gain (569) 307
(Loss)/Gain from fair value of financial instruments at fair value through
profit or loss (121) 73
============================================================================ =================== =================
(Loss)/Profit before net financing cost (37,172) 70,029
---------------------------------------------------------------------------- ------------------- -----------------
Finance cost (27,945) (27,547)
Finance income 18,224 1,179
Share of profit of equity-accounted investments in joint ventures 2,613 2,012
---------------------------------------------------------------------------- ------------------- -----------------
(Loss)/Profit before tax (44,280) 45,673
============================================================================ =================== =================
Income tax expense 19,701 (12,245)
============================================================================ =================== =================
(Loss)/Profit for the period (24,579) 33,428
---------------------------------------------------------------------------- ------------------- -----------------
Items that will not be reclassified to profit or loss
Gain on equity instruments designated at fair value through other
comprehensive income - 36
---------------------------------------------------------------------------- ------------------- -----------------
Other comprehensive income for the period, net of tax - 36
---------------------------------------------------------------------------- ------------------- -----------------
Total comprehensive income for the period (24,579) 33,464
---------------------------------------------------------------------------- ------------------- -----------------
(Loss)/Profit attributable to: (24,579) 33,428
---------------------------------------------------------------------------- ------------------- -----------------
* ordinary equity holders of the Company (25,078) 32,606
* non-controlling interests 499 822
---------------------------------------------------------------------------- ------------------- -----------------
Total comprehensive income attributable to: (24,579) 33,464
---------------------------------------------------------------------------- ------------------- -----------------
* ordinary equity holders of the Company (25,078) 32,642
* non-controlling interests 499 822
---------------------------------------------------------------------------- ------------------- -----------------
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 30 JUNE 20 23
30 June
2023 31 December 2022
Unaudited Audited
EUR'000 EUR'000
============================================================== ======================= ==================
ASSETS
Investment property 2,864,290 2,945,460
Goodwill 12,349 12,349
Advances for investment property 6,102 4,393
Investments in joint-ventures 72,645 67,967
Equity investments 7,629 7,521
Other long-term assets 1,724 1,784
Prepayments 210 226
Deferred tax asset 5,888 161
============================================================== ======================= ==================
Non-current assets 2,970,837 3,039,861
============================================================== ======================= ==================
Financial assets at fair value through profit or loss 3,433 3,554
Trade and other receivables 21,919 22,337
Contract assets 4,598 9,967
Guarantees retained by tenants 99 98
Income tax receivable 371 840
Prepayments 6,679 2,430
Cash and cash equivalents 130,545 163,767
============================================================== ======================= ==================
Current assets 167,644 202,993
============================================================== ======================= ==================
Investment property held for sale 121,138 126,009
============================================================== ======================= ==================
Total current assets 288,782 329,002
============================================================== ======================= ==================
Total assets 3,259,619 3,368,863
============================================================== ======================= ==================
EQUITY AND LIABILITIES
Issued share capital 1,736,955 1,704,476
Treasury shares (4,827) (4,859)
Fair value reserve of financial assets at FVOCI (5,469) (5,469)
Share-based payment reserve 156 156
Retained earnings (96,123) (37,798)
============================================================== ======================= ==================
Equity attributable to ordinary equity holders of the Company 1,630,692 1,656,506
Non-controlling interests 1,361 862
Total equity 1,632,053 1,657,368
Interest-bearing loans and borrowings 1,365,191 1,433,631
Deferred tax liability 138,958 154,866
Lease liabilities 19,426 19,861
Deposits from tenants 2,894 3,897
Guarantees retained from contractors 2,834 1,995
Trade and other payables 78 1,034
============================================================== ======================= ==================
Non-current liabilities 1,529,381 1,615,284
============================================================== ======================= ==================
Interest-bearing loans and borrowings 24,078 21,600
Guarantees retained from contractors 4,625 3,652
Trade and other payables 32,013 35,679
Contract liability 2,126 1,743
Other current financial liabilities 50 67
Current portion of lease liabilities 2,313 1,669
Deposits from tenants 20,221 17,477
Income tax payable 468 382
============================================================== ======================= ==================
Current liabilities 85,894 82,269
============================================================== ======================= ==================
Liabilities directly associated with the assets held for sale 12,291 13,942
============================================================== ======================= ==================
Total current liabilities 98,185 96,211
============================================================== ======================= ==================
Total equity and liabilities 3,259,619 3,368,863
============================================================== ======================= ==================
COMBINED CONSOLIDATED PORTFOLIO SNAPSHOT
AS AT 30 JUNE 2023
Our real estate investments are in Poland and Romania, the two
largest markets in the CEE. As at 30 June 2023, our portfolio was
spread across 13 cities, with Poland accounting for 49.8% by value
and Romania 50.2%.
Combined Portfolio Snapshot (as at 30 June 2023)
-------------------------------------------------------------------------------------------------
Poland Romania Combined Portfolio
---------------------- ---------------------- ----------------------
Standing Investments(1) 19 23 42
------------------------- ---------------------- ---------------------- ----------------------
GAV(2) / Standing
GAV (EURm) EUR1,533m / EUR1,361m EUR1,547m / EUR1,459m EUR3,080m / EUR2,819m
------------------------- ---------------------- ---------------------- ----------------------
Occupancy 74.7% 92.4% 85.5%
(92.6% incl. (85.7% incl.
tenant options) tenant options)
------------------------- ---------------------- ---------------------- ----------------------
WALL(3) 4.0 years 5.8 years 4.9 years
------------------------- ---------------------- ---------------------- ----------------------
Standing GLA (k 542.1k sqm 880.8k sqm 1,422.9k sqm
sqm)(4)
------------------------- ---------------------- ---------------------- ----------------------
Contracted Rent
(EURm)(5) EUR95.9m EUR106.2m EUR202.2m
------------------------- ---------------------- ---------------------- ----------------------
GAV Split by Asset
Usage
------------------------- ---------------------- ---------------------- ----------------------
Office 81.8% 74.2% 78.0%
Mixed-Use 18.2% 0.0% 9.0%
Industrial 0.0% 18.5% 9.3%
Others 0.0% 7.2% 3.6%
GAV Split by City
------------------------- ---------------------- ---------------------- ----------------------
Bucharest 0.0% 83.1% 41.7%
Timisoara 0.0% 6.5% 3.3%
Pitesti 0.0% 3.8% 1.9%
Constanta 0.0% 4.2% 2.1%
Arad 0.0% 1.1% 0.6%
Oradea 0.0% 0.4% 0.2%
Targu Mures 0.0% 0.9% 0.4%
Warsaw 44.9% 0.0% 22.4%
Krakow 19.8% 0.0% 9.8%
Wroclaw 16.6% 0.0% 8.3%
Katowice 11.0% 0.0% 5.5%
Lodz 4.1% 0.0% 2.1%
Gdansk 3.6% 0.0% 1.8%
------------------------- ---------------------- ---------------------- ----------------------
GAV as % of Total 49.8% 50.2% 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 2023.
3. Includes pre-let commercial standing and development/re-development
assets. WALL of standing commercial properties in Romania, Poland
and the Combined portfolio are 5.8 years, 4.0 years and 5.0
years, respectively.
4. Including 21.1k sqm of residential assets in Romania.
5. Total rent comprises commercial (EUR192.5 million) and residential
(EUR0.6 million in Romania) standing properties, rent in assets
under refurbishment (EUR8.8 million in Poland) and development
pre-lets (EUR0.3 million in Romania).
For further information visit www.globalworth.com or
contact:
Enquiries
Rashid Mukhtar
Group Head of Finance Tel: +40 732 800 000
Panmure Gordon (Nominated Adviser and Joint Broker) Tel: +44 20
7886 2500
Dominic Morley
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 EUR3.1 billion, as at 30 June 2023. Approximately
96.9% of the portfolio is in income-producing assets, predominately
in the office sector, and leased to a diversified array of over 700
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, Oradea and Targu Mures.
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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IR PLMITMTJTBLJ
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