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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 expenses1.
· 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 loss |
| (386) | (47) |
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 €'000 | 2020 €'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 held for sale |
| 14,727 | - |
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 and follow us on Facebook, Instagram and LinkedIn.