Globalworth Regulatory News (GWI)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

19 September 2023

Globalworth Real Estate Investments Limited

("Globalworth" or the "Company")

Interim Results for the six months ended 30 June 2023

Globalworth, the leading office investor in Central and Eastern Europe, announces the release of its Interim Report and Unaudited Consolidated Financial Results for the six-month period ended 30 June 2023 (the "Interim Report").

The Interim Report is also available on Globalworth's website at: https://www.globalworth.com/investor-relations/reports-presentations/ 

For further information visit www.globalworth.com or contact:

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 €3.1 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.

For more information, please visit www.globalworth.com and follow us on Facebook, Instagram and LinkedIn.

Excluded Territories

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable legal or regulatory requirements. In particular, the ability of persons who are not resident in the United Kingdom or who are subject to the laws of another jurisdiction to elect to receive the Scrip Dividend Alternative may be affected by the laws of the relevant jurisdictions in which they are located or to which they are subject. Any failure to comply with applicable legal or regulatory requirements of any jurisdiction may constitute a violation of securities laws in that jurisdiction.

GLOBALWORTH REAL ESTATE INVESTMENTS LIMITED

INTERIM REPORT AND UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

30 JUNE 2023

FINANCIAL HIGHLIGHTS: H1-2023

Dear Stakeholders,

We have started the year amid high inflation and continued geopolitical uncertainties that have driven interest rates to their highest levels in the last 10 years, which will in all likelihood lead to subdued economic growth in CEE and EU, during the next two years. Nevertheless, there are signs that inflation is abating and in the absence of other shocks, we expect a gradual return to a sustainable improvement of GDP growth and improving real estate market conditions.

The European Commission has revised its EU GDP forecast upwards to 1.0% in May, with Poland and Romania, expected to have GDP growth of 0.7% and 3.2% respectively, in 2023.

Globalworth's performance throughout the business remained resilient, despite global challenges, as we continued to implement our "local landlord" approach, with an increasing focus on sustainability.

Our initiatives encompassed investments in both existing and new high-quality properties, the diligent management of our portfolio to preserve and enhance our operational performance, and the maintenance of an efficient and flexible capital structure, resulting in a robust overall performance. All of this was achieved while simultaneously providing a safe and healthy environment for our people, tenants, and communities to work, visit, and engage with.

At this point, I would like to express my gratitude to all our team members for their positive attitude, dedication, and commitment, as well as extend our appreciation to our shareholders, partners, and communities for their unwavering support in helping us achieve these results.

Investment in Our Portfolio

Our portfolio predominantly consists of Class "A" office spaces. Nevertheless, during the first half of 2023, we directed our development efforts towards high-quality logistics facilities in Romania and the redevelopment of two mixed-use properties in Poland.

Consequently, in H1-2023, we successfully completed the construction of the Targu Mures Logistics Hub, encompassing a total of 18.3k square meters of Gross Lettable Area (GLA), fully leased to highly credible tenants. Simultaneously, progress continued on the development of the two final phases within Stefanesti Business Park, situated in the Bucharest Greater Area, which upon completion will contribute an additional 13.3k square meters of GLA to our industrial/light logistics portfolio in Romania.

In 2023, we anticipate the conclusion of refurbishment works on two out of the three mixed-use properties in our Polish portfolio. This will result in the enhancement and expansion of their office space offerings. For our other existing properties, we remain committed to ongoing investments aimed at preserving and, where necessary, enhancing their quality.

Beyond the overall positive tone of our operational performance and owing to the prevailing economic uncertainties and challenging market conditions, the value of our like-for-like standing commercial portfolio, as well as our total combined portfolio, decreased during the first half of 2023 by 3.0% to €2.8 billion and 2.5% to €3.1 billion, respectively. This decline is primarily attributable to the effects of revaluations in June 2023.

Our Leasing and Occupancy

The leasing of spaces within our portfolio constitutes a pivotal determinant of our business's success. It brings me satisfaction to report that during the initial half of 2023, we adeptly managed the leasing of 181.0k square meters of commercial spaces, with a Weighted Average Lease Length (WALL) of 6.9 years. This achievement is particularly noteworthy in light of the persistently demanding market conditions.

As of June 30, 2023, the average occupancy rate across our combined commercial portfolio stood at 85.5% (including tenant options, this figure reached 85.7%), exhibiting marginal fluctuation in comparison to the year-end 2022 statistics, which indicated 85.6% (or 85.9% including tenant options). Following the sale of Warta Tower in July 2023, a property that had become fully vacant by the close of June, our standing commercial occupancy, when adjusted, rose to 87.7%.

In both the Polish and Romanian markets, higher construction costs and interest rates have led to a reduction in development activity and significantly constrained new supply. Consequently, the forthcoming years are anticipated to witness a diminished availability of top-tier office spaces in central locations, below the average levels witnessed in previous periods, potentially driving higher tenant demand for existing properties.

Furthermore, the divergence between A-grade properties of robust ESG credentials and B-grade properties has been growing, both from an investment and leasing perspective. This development is poised to generate benefits to our portfolio of high-quality properties in the future.

Headline rental rates have remained stable, and the combination of reduced supply and high inflation is anticipated to serve as a strong buffer against the adverse impact of a decline in tenant demand due to a weakening economic landscape.

Notably, total annualised contracted rent experienced a 6.8% surge, reaching €202.2 million compared to the year-end 2022 figures. Like-for-like annualised commercial contracted rents within our standing commercial portfolio exhibited a 5.4% upswing, at €191.0 million by the close of the first half of 2023.

Our Financial Results

Gross rental income increased with €5.1 million compared to the first half of last year as an effect of indexation of 8.8% that partially offset by the reduced rates at which existing leases were renewed for extended period or new leases were signed.

Furthermore, a decline in service charge income amounting to €3.0 million, offset by a reduction in operating expenses of €1.4 million, culminated in a Net Operating Income that surged by 5.6%, reaching €3.9 million, when compared to H1 2022.

Nonetheless, our adjusted normalised EBITDA exhibited a 4.1% increase, reaching €66.0 million, attributable to the favourable effects stemming from cost savings in recurring administrative and other expenditure categories.

Regrettably, our net result for the initial half of 2023 amounted to a net loss of €25.1 million, in contrast to the net profit of €32.6 million recorded in H1 2022. This transformation was primarily precipitated by a fair value loss on investment property, albeit partially offset by an augmented finance income resulting from the buyback of €100 million in bonds.

Dividend

During the March 2023, we announced the second interim dividend of €0.15 per share in respect of the six-month financial period ended 31 December 2022 with a scrip dividend alternative at a reference price of €2.28 per scrip to preserve liquidity. Approximately 98.1% of the shareholders elected to receive scrip dividend shares thus resulting in only €0.6 million cash dividend outflow.

Similarly, on 30 August 2023, we announced for the first six-months of 2023 an interim dividend of €0.14 per share along with a scrip dividend alternative at a reference price based on a 20% discount to five consecutive dealing days until the 13 September 2023. As communicated in the scrip circular, the Company has received irrevocable undertakings from approximately 92% of its shareholders to elect for the Scrip Dividend alternative shares in respect of all of their full cash entitlement to the Interim Dividend. Therefore, we expect the net cash outflow amount from the cash dividend component to be minimal similarly to March 2023.

Balance Sheet

We are mostly focused on our liquidity initiatives, including deploying extra cash resources in unsecured note buybacks by taking advantage of short-term discount opportunities. We are also executing our liability management strategy by extending near-term secured facilities and progressively arranging new secured facilities for 5 to 10 year terms with local and regional banks in our markets. Our strong presence in the two capital cities, Bucharest and Warsaw, with several commercial office buildings having occupancy above 85% and high ESG credentials, provides us with a unique strength in sourcing additional secured facilities in the short term.

It is important to note that Globalworth has no material debt maturing until March 2025. Additionally, as of 30 June 2023, we have €130 million in cash and cash equivalents, which was further strengthened by the additional sale proceeds from Warta Tower in July. We also have a further €265 million in undrawn debt facilities, out of which €50 million is available to draw until December 31, 2025.

In addition, during the interim period, we repurchased 2025 notes with a face value of €100 million at a discounted price of €83.17 from utilising our existing cash resources. This brought down our leverage ratio to 42.7% LTV, which is the same as it was on December 31, 2022, despite a 3% decline in the value of our like-for-like standing commercial portfolio.

The EPRA Net Reinstatement Value (NRV) as of 30 June 2023 was €1.8 billion, or €7.55 per share. This represents an 8.9% decrease from €8.29 per share on December 31, 2022. The decrease was primarily due to the issuance of a €14.3 million scrip dividend shares in April 2023, which diluted the NRV per share as well as a valuation loss on the property portfolio in H1-2023. This was partially mitigated by higher rental growth from 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 Globalworth's credit rating to BB+ with a stable outlook.

Environmental and social

We maintained our A-rating by MSCI and a low-risk rating by Sustainalytics. We issued our fifth Sustainable Development Report during the period.

We continued investing in our green portfolio and, during the first six months of 2023, we certified or recertified 15 properties. At the end of June 2023, we had 52 green-certified properties valued at €2.4 billion.

In addition, 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).

Management change

Stamatis Sapkas, Group CFO, who has contributed significantly to our financial leadership during their tenure decided to step down in June, in order to pursue personal and professional opportunities. Stamatis' responsibilities will be assumed by Mr. Rashid Mukhtar, a dedicated member of our team since 2013, known for his capable financial stewardship and deep understanding of our company's financial landscape.

Outlook

Despite prevailing challenges such as inflation and heightened stresses induced by higher nominal rates in the financing markets, there are discernible signs of macroeconomic variables stabilising. Barring the emergence of unforeseen disruptions, both financial and real estate markets are anticipated to further solidify their stability.

The limited supply of office spaces is expected to act as a catalyst, propelling rents and occupancy rates upwards, thereby fostering robust fundamentals for the office market. However, it is imperative that risks associated with ESG-related capital expenditures are diligently managed and addressed in a manner that enhances overall value.

Over the past 12 months, our primary focal point has remained unwavering - maintaining operational excellence and safeguarding a level of liquidity that positions us to uphold a prudent capital structure while seizing investment opportunities as they materialise.

Dennis Selinas

Chief Executive Officer

18 September 2023

REAL ESTATE INVESTMENT ACTIVITY

Review of Developments

In H1-2023, we continued with our active development programme focusing on high-quality logistics / light-industrial facilities in Romania and the refurbishment / repositioning of two mixed-use properties in Poland. At the beginning of the year, we had three logistics facilities under construction, of which Targu Mures Logistic Hub was delivered in the first half and the other two to be delivered in the second half of the year, while the refurbishment/repositioning works of two (of the three) mixed-use properties continued throughout the period.

New Delivery

In the first half of 2023, we delivered our first project in Targu Mures with a leasable area of 18.3k sqm. At the end of June, the project, which is held through a JV partnership, was 100% let to two large multinational companies, Friesland Campina and EKR Elektrokontakt (Nexans Group).

Current Developments & Refurbishment / Repositioning Projects

In the first 6 months of 2023, we continued with the developing of the second and third phase of our Business Park Stefanesti which is located Northeast of Bucharest, expecting that these facilities will, on completion, further increase our footprint with 13.3k sqm of high-quality GLA.

Business Park Stefanesti, which is our second small business units investment in Bucharest area, offers easy access to the Bucharest Ring Road and allows for a quick connection to the centre of Bucharest via the A3 motorway. The project comprises three buildings, the first one being delivered in November 2022 and, as of June 2023, being 100% leased to Delivery Solutions SRL, one of the leading delivery companies in Romania, while the second and third phase are, in average, 34.8% pre-let by the end of June 2023.

Following the review back in 2020 of our portfolio and in response to market conditions, we commenced refurbishment/repositioning of two of our three mixed-use properties in Poland. Aiming to increase their class "A" office space and improve their retail/commercial offering, work started in our Renoma landmark property in Wroclaw in H2-2020 and in our centrally located Supersam property in Katowice in H2-2021. 

· In Renoma, the refurbishment will increase the offer of Class "A" office space on the higher floors. It will also reposition the property's retail offer towards a more attractive food court and a selected fashion mix on the ground floor and convenience facilities, including a supermarket, gym and drugstore located on the -1 level.

· In Supersam, we are redeveloping the entire level 1 into an office function. On level -1, we are repositioning selected retail modules into high-quality retail & commercial spaces with food and entertainment.

Works in Renoma and Supersam are expected to be completed in 2023.

Future Developments

We own, directly or through JV partnerships, other land plots in prime locations in Bucharest and regional cities in Romania and Poland, covering a total land surface of 1.2 million sqm (comprising 2.7% of the Group's combined GAV), for future developments of office, industrial or mixed-use properties. When fully developed, these land plots have the potential to add a total of a further 785.7k sqm of high-quality GLA to our standing portfolio footprint.

In the first half of 2023, we sold a plot of land of 3.2k sqm located in the northern part of Bucharest.

These projects, which are classified as "Future Development", continue to be reviewed by the Group, albeit periodically, with the pace at which they will be developed being subject to tenant demand and general market conditions.

(*) 50:50 Joint Venture; figures shown on 100% basis.

(**) Initial preliminary development budgets on future projects to be revised prior to the permitting.

ASSET MANAGEMENT REVIEW

Leasing Review

New Leases

Our principal focus continued to be the prolongation of leases with existing tenants in our portfolio and the take-up of available spaces in standing properties and developments.

In the first six months of 2023, the Group successfully negotiated the take-up (including expansions) or extension of 181.0k sqm of commercial spaces in Poland (26.4% of transacted GLA) and Romania (73.6% of transacted GLA), with an average WALL of 6.9 years. Between 1 January and 30 June 2023, our leasing activity involved new take-up of available spaces, with such leases accounting for 50.0% of our total leasing activity signed at a WALL of 8.1 years, while renewals were signed at a WALL of 5.9 years.

The leasing market remains challenging, as the CEE economy continues to recover at a moderate pace with inflation returning to single-digits coupled with the stabilization and general acceptance of the hybrid work model. As such, most of our large multinational and national corporates have begun taking decisions on their future occupational plans, re-defining the role of the office as a place for collaboration and creativity, part of their corporate identity.

In total, we signed new leases for 90.6k sqm of GLA, with the majority involving spaces (more than 85%) leased to new tenants, and the remaining areas were taken up by existing tenants which were expanding their operations.

New leases (new tenants) were signed with 46 tenants for 80.4k sqm of GLA at a WALL of 8.6 years. The majority were for office spaces, accounting for 58.2%, with the remainder involved industrial (39.3%) and retail/other commercial spaces. The largest new leases in this period were with EKR-Elektrokontakt (14.1k sqm) in Targu Mures Logistics Hub, Banca Transilvania (9.6k sqm) in Green Court Complex, Dante International (9.6k sqm) in Globalworth Square in Bucharest and Leverx Poland (3.3k sqm) in Retro Office House (Wroclaw).

In addition, 15 tenants signed new leases, expanding their operations by 10.2k sqm at an average WALL of 5.2 years.

We renewed leases for a total of 90.4k sqm of GLA with 52 of our tenants at a WALL of 5.9 years. The most notable extensions involve Honeywell (24.4k sqm) in BOC Tower, Deutsche Bank (12.9k sqm) in BOB Tower, Huawei (12.5k sqm) in Globalworth Tower and Ailleron (5.2k sqm) in Podium Park while c.84.3% of the renewals by GLA signed were for leases that were expiring in 2024 or later.

Rental Levels

Headline market rental levels have remained relatively stable in our portfolio, despite the uncertainty in the market and the cautious approach of tenants, reflecting the quality of our properties, our active asset management initiatives, and our approach to sustainable development. In addition, we have seen a widening gap between A-grade properties with strong ESG credentials and B-grade properties from a leasing and investment perspective, which should benefit our portfolio of high-quality properties in the future.

Our leases typically adjust annually and in the first quarter of the year. In the first half of 2023, eligible leases were indexed at an average of 8.8%. Nevertheless, this positive impact was partly offset by the rates at which leases were renewed or new leases signed throughout the period.

At the end of June 2023, our average headline rent in our standing properties for office, retail/commercial and industrial spaces were €15.2/sqm/month (€14.2 at YE-2022), €15.7/sqm/month (€14.2 at YE-2022) and €4.2/sqm/month (€4.0 at YE-2022) respectively.

Office leases signed in the first half of the year were at an average rent of €14.4/sqm/month, industrial spaces at €4.6/sqm/month, and retail spaces at €15.2/sqm/month. The overall commercial GLA take-up during the first six months of 2023 was at an average rent of €12.6/sqm/month.

Contracted Rents (on annualised basis)

Total annualised contracted rent across our portfolio in Poland and Romania increased by 6.8% to €202.2 million compared to year-end 2022, driven by active asset management, indexation and lease-up in our development projects.

Total annualised contracted rents in our standing commercial portfolio were €192.5 million on 30 June 2023, up by 6.2% compared to 31 December 2022, increasing to €193.1 million when including rental income generated by renting 137 residential units and other auxiliary spaces in Upground, the residential complex in Bucharest which Globalworth partially own.

Like-for-like annualised commercial contracted rents in our standing commercial portfolio also increased by 5.4% to €191.0 million at the end of the first half of 2023 compared to 31 December 2022, mainly as an effect of rent indexation.

The Group's rent roll across its combined portfolio is well diversified, with the largest tenant accounting for 5.1% of contracted rents, while the top three tenants account for 10.8% and the top 10 account for 24.3%.

Cost of Renting Spaces

The headline (base) rent presents the reference point, which is typically communicated in the real estate market when a new lease is signed. However, renting spaces typically involves certain costs, such as rent-free periods, fitouts for the space leased, and brokerage fees, which the landlord incurs. These incentives can vary significantly between leases and depend on market conditions, type of lease (new take-up or lease extension), space leased (office, industrial, other), contract duration and other factors.

In calculating our effective rent, we account for the costs incurred over the lease's lifetime, which we deduct from the headline (base) rent, thus allowing us to assess the profitability of a rental agreement.

Overall, in the first half of 2023, we successfully negotiated the take-up (including expansions) or extension of 181.0k sqm of commercial spaces in our portfolio. The weighted average effective rent for these new leases was €9.1/sqm/month with a WALL of 6.9 years. Industrial leases completed in the period, which accounted for 18.9% of the total space leased, resulted in lower average headline and effective rents.

The difference between headline (base) and effective rents in the first half of 2023 was, on average, 27.8%, which is higher than for FY2022 (average of 26.1%) reflecting the fact that competition remained challenging.

In total, new leases signed in the first six months of the year will generate a future rental income of €202.9 million (including auxiliary spaces), with leases from office properties accounting for 82.0% of future rental income.

Collections Review

The ability to collect - cash in - contracted rents is a key determinant for the success of a real estate company.

Our rate of collections of rents invoiced and due in the first half of 2023 remained high at 99%[1] (over 99% for 2022FY), due to the long-term partnerships we have established and maintained with high-quality national and multinational tenants since the inception of the Group, which have helped us minimise the impact on rent collections in this period and ensure sustainable cash flow generation.

Portfolio Valuation

In line with our practice of biannual valuations, our entire portfolio in Poland and Romania was revalued as of 30 June 2023. The valuations were performed by Knight Frank for our properties in Poland, with Colliers and Cushman & Wakefield valuing our properties in Romania (more information is available under note 4 of the unaudited interim condensed consolidated financial statements as of and for the period ended 30 June 2023).

Assigning the appraisal of our portfolio to four independent and experienced service providers makes the process of determining the value of properties transparent and impartial. Through our oversight, we ensure that a consistent methodology, reporting, and timeframe are respected. Our portfolio has been growing since the inception of the Group, driven by new additions through the acquisition or development of high-quality properties in Poland and Romania, our asset management initiatives, and the performance of the real estate markets in which we operate.

Overall, the total combined portfolio value was €3.0 billion at the end of 2019 and remained effectively unchanged in 2020 due to the impact of the COVID-19 pandemic. It increased to €3.2 billion at both 31 December 2021 and 31 December 2022, thanks to additions made in the last two full years.

The portfolio decrease in the first half of 2023 is mainly attributed to continued challenging market conditions across our markets, which led to marginal changes in key market indicators used by valuation companies. Our combined portfolio value as of 30 June 2023 was €3.1 billion, representing a 2.5% decrease compared to 31 December 2022. The like-for-like appraised value of our standing commercial properties was €2.8 billion at the end of the period, reflecting a 3.0% decrease compared to 31 December 2022.

In valuing our properties, the key market indicators used by the four independent appraisers, although varying, consider factors such as the commercial profile of the property, its location, and the country in which it is situated. These factors have remained consistent with year-end 2022, with Effective Rental Values (ERVs) remaining stable and yields marginally decompressing in our markets of interest.

STANDING PORTFOLIO REVIEW

Standing Portfolio Evolution

Our combined portfolio of standing properties expanded in the first half of 2023 with the addition of our first logistic/light industrial facility in Targu Mures, Romania. The Targu Mures Logistic Hub offers a total of 18.3k sqm of high-quality Gross Lettable Area (GLA) and, as of 30 June 2023, was fully leased to two large multinational companies, with an average Weighted Average Lease Length (WALL) of 10.2 years.

In general, our standing portfolio primarily comprises 30 Class "A" offices (comprising a total of 50 properties) and a mixed-use investment (comprising a total of five properties) in central locations in Bucharest (Romania), Warsaw (Poland), and five of the largest office markets/cities in Poland (Krakow, Wroclaw, Katowice, Gdansk, and Lodz). These locations collectively account for 88.5% of the value of our standing portfolio.

Furthermore, in Romania, we fully own five logistics/light-industrial parks with ten facilities located in Timisoara, Arad, Oradea, and Pitesti. We also own the majority stake in two small business unit projects in Bucharest, each with two standing facilities. Additionally, we have a 50% ownership stake through joint venture agreements in three other logistics/business parks (with four standing facilities) in Bucharest, Constanta, and Targu Mures. Moreover, we own a portion of a residential complex in Bucharest.

As of 30 June 2023, our combined standing portfolio consisted of 42 investments (compared to 41 on 31 December 2022) encompassing 72 buildings (compared to 71 on 31 December 2022) in Poland and Romania.

During the period, the total Gross Lettable Area (GLA) of our standing commercial portfolio increased by 18.6k sqm, representing a growth of 1.3%, reaching a total of 1,401.8k sqm by the end of June. This expansion was primarily attributed to the completion of the Targu Mures Logistic Hub, which contributed a total GLA of 18.3k sqm, as well as the remeasurement of certain areas within our portfolio.

In total, our standing portfolio (comprising commercial and other properties) increased in GLA by 1.2% to reach 1,422.9k sqm. This increase was influenced by the sale of residential units in our Upground Residential project.

The appraised value of our combined standing portfolio as of 30 June 2023 amounted to €2.8 billion, with more than 98% of this value attributed to commercial properties. This value reflected a decrease of 2.6% compared to 31 December 2022. This overall decline is primarily attributable to negative revaluation differences, partially offset by the completion and addition of the Targu Mures Logistic Hub. The value of like-for-like standing commercial properties decreased by 3.0% as of 30 June 2023 compared to 31 December 2022, with a 3.6% reduction in the value of like-for-like standing office and mixed-use properties partly offset by an increase in the value of our industrial properties. (Additional information can be found in the "Asset Management Review").

Globalworth Combined Portfolio: Key Metrics

(*) Like-for-Like change represents the changes in GLA or GAV of standing properties owned by the Group at 31 December 2022 and 30 June 2023.

(**) Includes impact in areas (sqm) from the remeasurement of certain properties and other GAV adjustments (redevelopment capex, reclassification).

Standing Portfolio Occupancy

Our standing commercial portfolio's average occupancy as of 30 June 2023 stood at 85.5% (85.7% including tenant options), indicating a marginal 0.1% decrease over the past six months (compared to 85.6% as of 31 December 2022, or 85.9% including tenant options).

The addition of the Mures Logistic Hub, fully leased as of 30 June 2023, was counterbalanced by mixed occupancy trends in our markets. In Poland, standing commercial occupancy decreased by 8.1% compared to 30 December 2022, primarily influenced by excess supply in our Regional Polish submarkets. In contrast, in Romania, it increased by 4.5% during the first half of 2023.

When adjusting for Warta Tower, which was sold in July and was entirely vacant as of 30 June 2023, our standing commercial occupancy reached 87.7% (87.8% including tenant options). On a like-for-like basis, occupancy experienced a slight decline of 0.3%, settling at 85.4% by the end of the first half of 2023. Like-for-like standing commercial occupancy, adjusted for Warta Tower, remained unchanged at 87.5% as of 30 June 2023, compared to the figures on 31 December 2022.

Across the portfolio, as of the end of the first half of 2023, we had 1,199.2k sqm of commercial Gross Lettable Area (GLA) leased to more than 630 tenants, with an average Weighted Average Lease Length (WALL) of 5.0 years. The majority of these tenants are national and multinational corporates, renowned within their respective markets.

Additionally, we had 47.8k sqm leased in the two mixed-use properties currently undergoing refurbishment/repositioning, and 4.6k sqm pre-let in our two facilities under construction in Business Park Stefanesti. These figures are not included in our standing portfolio metrics.

* Renewals are neutral to the occupancy calculation.

Standing Properties Operation and Upgrade Programme

Providing best-in-class real estate spaces to our business partners stands as a fundamental component of our strategy at Globalworth.

We firmly believe that employing a "hands-on" approach, coupled with continuous active management and investment in our portfolio, enables us to preserve and augment the value of our properties, yield long-term income, and offer top-tier real estate spaces to our business partners.

To cater to the requirements of our current and prospective business partners, we persistently (re)invest in our properties, ensuring the maintenance and, where necessary, enhancement of the quality of our buildings and services.

We are pleased to report that all our properties in Poland are now under internal management by the Group. In Romania, we manage all but one of our offices in-house. Collectively, we internally oversee 962.3k sqm of high-quality office and mixed-use space, with an appraised value of €2.4 billion. Within our total standing commercial portfolio, internally managed properties account for 87.1% by value (comprising 97.0% of office and mixed-use standing properties) as of 30 June 2023.

Our Upgrade Programme has returned to a more conventional pace since 2021, following a temporary scaling back in 2020 due to COVID-19. As a result of our ongoing in-house initiatives and property additions, we possess a modern portfolio. Notably, 54 of our standing commercial properties, constituting 77.4% by Gross Lettable Area (GLA) and 76.4% by commercial portfolio value, have either been delivered or significantly refurbished in or after 2014. In the first half of 2023, we invested €24.1 million in selected improvement initiatives within our standing portfolio.

SUSTAINABLE DEVELOPMENT UPDATE / OTHER INITIATIVES

Green Buildings

Consistent with our commitment to energy-efficient properties, during H1-2023 we certified or recertified 15 properties in our portfolio with BREEAM Very Good or higher certifications.

Overall, as of 30 June 2023, our combined standing portfolio comprised 52 green-certified properties, accounting for 87.1% of our standing commercial portfolio by value. BREEAM-accredited properties account for 82.0% of our green-certified standing portfolio by value, with the remaining properties being holders of other certifications (LEED Gold or Platinum, Edge).

At Globalworth, we are aiming for 100% of our portfolio to be green-accredited. We are currently in the process of certifying or recertifying 20 other properties in our portfolio, principally targeting BREEAM certifications.

Furthermore, as part of our overall green initiatives, we kept our policy of securing 100% of the energy used in our Polish and Romanian properties from renewable sources.

In addition, as of 30 June 2023, 50 of our standing commercial properties had a WELL Health-Safety Rating, with a total value of €2.4 billion accounting for 95.5% of our standing office and mixed-use properties by value. Overall, 95.8% of our office and mixed-use portfolio by value (including Renoma and Supersam) is rated for WELL Health-Safety, standing as further evidence of the quality of our portfolio.

Social Initiatives

In the first half of 2023, Globalworth and the Globalworth Foundation continued with their very active social programme, contributing €154k to over 20 initiatives in Romania and Poland.

Initiatives to which we contributed included:

· Primo Hub Center: As part of our 'Space for Ukraine' initiative in the BOB building, we offered support to DGASMB in opening a much-needed educational center for over 160 refugee children. The 'Space for Ukraine' initiative is an aid program that we've put in place since the beginning of the Ukrainian conflict. It is aimed at providing shelter and support for the better integration of refugees into our communities.

· Heart to Heart

· Globalworth Foundation's activities include concern for children's health. By organizing a fundraising campaign among Globalworth tenants it was possible to raise funds to support little patients with heart defects. The campaign started on Saint Valentine's Day.Thanks to the initiative an INR apparatus to measure coagulation, which is necessary after heart operations was purchased. Globalworth Foundation donated a treatment chair for the cardiac surgery unit at paediatric hospital in Warsaw

· 'Zaczytane Bibiloteki', Book-crossing in hospitals and care centres for children in Katowice

· The Globalworth Foundation, together with the Zaczytani.org Foundation, has opened four "Zaczytane Bibiloteki" in hospitals and care centers for children in Katowice, Krakow Warsaw and Wroclaw. The books were collected among employees of companies that are tenants of Globalworth properties. Thanks to the campaign, it was possible to collect more than 1,000 books, which will receive a second life and give others a chance to read them. The aim of the campaign is to help children undergoing treatment in hospitals and wards of childcare centres by making their time more pleasant and providing permanent access to literature.

In addition to these we had several campaigns within our communities among which it is noteworthy to mention:

· Super Woman - where we offered to the astonishing women from our buildings a special gift: their own super-hero icon tote bags, based on their unique powers

· Coffee Talks - since offices are more than simply physical spaces, Globalworth continued to strive to offer its community the greatest workplace experiences. In May, we went on a tour of our buildings and offered our community the best coffee in town

· Office Moji Day - To celebrate World Emoji Day in July, we encouraged our tenants' creative communication by replacing conventional language with emojis

· "Bike services" for our tenants in Poland - The celebrate the start of spring and summer season Globalworth Poland organized in May a series of Bike Days in our office buildings in Poland. Skilled technicians were on hand to provide basic maintenance and repairs, ensuring that our tenants' bikes were in excellent condition for their upcoming adventures

Reporting

As part of our effort to improve disclosure in relation to our sustainable development strategy, initiatives and performance, we published Globalworth's "2022 Sustainable Development Report".

This is the fifth report published by the Group and has been prepared in accordance with the GRI Standards: Core option and with the European Public Real Estate Association's Sustainability Best Practice Reporting Recommendations (EPRA sBPR).

PORTFOLIO SNAPSHOT

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%.

CAPITAL MARKETS UPDATE

Equity Capital Markets and Shareholder Structure Update

The first half of 2023 was characterised by continued high inflation, rising interest rates and the continuation of the war in Ukraine, all of which we expect continue to impact in the near and medium term the economic environment, maintaining higher volatility in the capital markets.

During the first half of 2023, real estate valuations encountered notable headwinds stemming from restricted access to capital markets and general uncertainty in investment in most asset classes. A resulting heightened investor risk aversion led to an elevation in demanded risk premia, subsequently contributing to an escalation in discount rates. This, coupled with a modest yield decompression observed within our targeted markets, culminated in diminished equity valuations as of 30 June 2023.

As of 30 June 2023, it is essential to place Globalworth's share price performance in the context of the prevailing macroeconomic landscape. Throughout the first half of 2023, the FTSE EPRA Developed Europe index demonstrated a negative performance, registering a decline of -11.8%. Conversely, the FTSE EPRA Global index exhibited a positive performance, reflecting an increase of +2.5%.

In contrast, despite several favourable factors such as the high quality of its portfolio, robust leasing activity, and the company's presence in high-growth, low office stock markets, Globalworth's share price experienced a notable decline of -22.9%. It is pertinent to acknowledge that this decline can be attributed in part to the limited free float of the Group.

Throughout this period, Globalworth's share price consistently traded below its last reported EPRA Net Reinstatement Value (NRV) as of 31 December 2022, which stood at €8.29 per share. The share price reached its lowest closing point on 5 June 2023, at €2.41 per share, and its highest price on 1 July 2022, at €5.05 per share.

Zakiono Enterprises Ltd, which is jointly and equally owned by CPI Property Group S.A. ("CPI") and Aroundtown SA ("Aroundtown"), holds 60.7% of the share capital of the Group, followed by Growthpoint Properties Ltd with 29.4%.

Bonds Update

We finance ourselves through a combination of equity and debt, and we compete with many other real estate companies for investor trust to support our initiatives.

At the beginning of the year, we had two Eurobonds outstanding for a total of €950 million with a weighted average maturity of 2.8 years.

These two Eurobonds outstanding, issued in March 2018 and July 2020 (inaugural green bond) and expiring in 2025 and 2026, respectively, with a weighted average cost of 3.0%, and, together with the €85.0 million unsecured facility raised in June 2022 from the IFC, provide us with a simplified capital structure and improve the efficiency of our capital allocation.

Globalworth is rated by two of the three major agencies, with Fitch maintaining their investment credit rating following their review of the Group and changing the outlook to negative while S&P downgraded the group's corporate credit rating to BB+ with a stable outlook considering the volatile and challenging market environment.

In the first six months of 2023, our bonds performance has been impacted by rising interest rates and bond investor risk aversion. On average, our 18/25 and 20/26 bonds traded at 11.4% and 10.4%, respectively, during the period. However, yield to maturity increased as the year progressed, closing at 14.9% and 13.2% on 30 June 2023.

Considering the context, the board decided to launch in June a cash tender offer for our outstanding notes due 2025 and 2026 in line with proactively managing the Company's debt maturity profile and, as a result, we have purchased €100.0 million of the 2025 notes. The Company may, in the future, depending on market conditions, acquire more of the notes issued under the two Eurobonds outstanding with the aim of addressing its bond debt maturities.

1. Introduction and Highlights

Gross rental income saw a 5.4% increase, primarily due to a like-for-like rise in rental income due to indexation, which amounted to 8.8%. However, this growth was mitigated by the reduced rates at which leases were renewed or new leases were secured during the period. Consequently, our combined occupancy level remained stable at 85.5%, maintaining the same level as in December 2022. This outcome underscores our commitment to the "local landlord" approach, which centres on cultivating strong tenant relationships and addressing their specific requirements.

In our financial performance analysis, we employ a range of metrics, encompassing both IFRS and EPRA measures. These metrics are deliberately designed to augment transparency and facilitate comparisons within the European real estate sector.

1. See Glossary for definitions.

2. See note 12 of the unaudited condensed consolidated financial statements for calculation.

3. See note 19 of the unaudited condensed consolidated financial statements for calculation.

4. See page 23 for further details.

5. See note 21 of the unaudited condensed consolidated financial statements for calculation.

2. Revenues and Profitability

Consolidated revenue in the first half of 2023 was €119.1 million, up by 2.1% from the prior year results.

Gross Rental income continued to grow, reaching €95.3 million for H1-2023, higher by €5.1 million compared H1-2022, decreasing to €80.5 million when accounting for tenant incentives which are amortised during the life of the lease.

Net Rental Income increase with €5.3 million compared to the same period in 2022, as follows:

· additional rental income of €0.4 million from industrial developments delivered over the past 12 months to our portfolio (Catted Chitila, TAP 2 B3 and Catted Stefanesti) and the additional rental income of €4.9 million from like-for-like standing properties in Romania (€3.5 million increase representing 9.7%) and Poland (€1.4 million increase representing 3.9%), and

The overall consolidated revenue increased by €2.5 million, compensated by €3 million lower (a decline of 8%) service charge income from standing properties when net rental income grew by 7.1% to €80.5 million. As a result of an average decrease in service charge rate per square metre across our standing portfolio and predominantly due to decline in the occupancy in Poland on like-for-like basis.

Overall, our revenues remained relatively evenly split between our two markets of operation, with Poland accounting for 49% (52% in H1-2022) and Romania 51% (48% in H1-2022).

Net Operating Income ("NOI"), after taking into account property and fitout costs, was €73.7 million, higher by 5.6% compared to H1-2022. Overall operating expenses in our portfolio decreased by €1.4 million to €45.3 million of which c.84% were reinvoiced to tenants as the vast majority of our leases are triple net. The portion of our operating expenses not reinvoiced typically involved spaces available to be leased and resulted in net operating costs being higher by €1.0 million across.

· NOI was split 48% Poland / 52% Romania, compared to 51% Poland / 49% Romania in H1-2022.

Adjusted normalised EBITDA (including share of minority interests) was €66.0 million, higher by 4.1% compared to H1-2022 (€63.4 million), as the increase in NOI was partially offset by higher administrative and other expenses.

Net finance costs were €9.7 million for the period, lower by 63% (or €16.7 million lower) compared H1-2022 (€26.4 million), due to:

· higher finance income (by €17.0 million) from the one-off gain related to the bond buyback of €15.8 million, income from bank deposits €1.0 million and interest received from joint ventures €0.3 million; and

· higher finance expenses by 1% overall (€0.4 million) as a result of numerous factors;

a) decline in interest costs on public notes by €4.5 million due to repayment of FY2022 notes in prior year and €0.6 million reduction in bank charges and other financial expenses, which mitigated,

b) €1.5 million increased expense from higher Euribor rates and additional €3.6 million interest expenses from new loan facilities outstanding in last 12 months as compared to 30 June 2022.

Joint ventures generated net gains in H1-2023 and our share of these amounted to €2.6 million increased with 30% as compared to H1-2022. This positive result is mainly due to an improvement in operating performance of the existing assets and our share of the net profit generated by the addition of Targu Mures during.

Earnings before tax turner to a loss of €44.3 million for H1-2023 (€45.7 million profit in H1-2022), mainly as a result of the €102.9 million revaluation loss recorded versus the valuation gain of €7.0 million recorded in H1-2022.

· €31.8 million and €71.1 million net fair value loss in Romania and Poland respectively (€11.7 million gain and €4.7 million loss recorded in Romania and Poland respectively in H1-2022)

EPRA earnings for the first six months of 2023, however, amounted to €34.2 million (or 15 cents per share), lower by 0.4%, EPRA earnings per share decreased as the weighted average number of shares was 228.4 million in H1-2023 (221.4 million in H1-2022).

IFRS earnings, similar to earnings before tax, which turned to a loss in H1-2023 due to the valuation loss recorded in the period, was 11 cents per share negative compared to positive 15 cents per share in H1-2022. The IFRS earnings were €24.6 million negative compared to €33.5 million positive in H1-2022. The lower income tax expense by €31.9 million (due to deferred tax impact on revaluation loss) compared to H1-2022 helped to reduce the magnitude of the negative result. Excluding the effects of investment property valuations, the net result for H1-2023 was €54.8 million, 15.6% higher than for H1-2022 (€32.2 million).

IFRS to EPRA earnings bridge (€cents)

3. Balance Sheet

The two largest assets in our balance sheet are real estate and cash which account for c.98% of our total assets on the balance sheet as at 30 June 2023.

Overall, the combined market value of the portfolio decreased by €77 million to €3,080 million (31 Dec. 22: €3,157 million), comprising of €2,953 million included in our investment property and €127 million representing the 100% value of the properties owned by the two joint ventures in which we own a 50% stake.

The balance sheet value of our investment property (freehold and properties held for sale), of €2,953 million as at 30 June 2023, was €84.9 million lower compared to year-end 2022. The reduction is due to the fair value losses on freehold properties of €102.9 million, with a split of 69% in Poland and 31% in Romania, which capital expenditure on development projects and standing assets helped to reduce the effect of the valuation losses on the overall portfolio value.

In June 2023 we proceeded with the buyback of €100 million of our FY2024 notes which principally contributed in lowering our cash position to €130.5 million at 30 June 2023 (€163.8 million at 31 Dec. 22).

Total assets at the end of the period were €3,260 million, lower by 3% compared to 31 December 2022 (€3,369 million).

EPRA NRV was €1,781.1 million as of 30 June 2023, lower by 3% compared to 31 December 2022 (€1,835.5 million). As a result, EPRA NRV per share also increased to €7.55 per share (31 December 2022: €8.29 per share) by 8.9%. The decrease was largely due to the €102.9 million negative effect of fair value gains on the portfolio and increase in the fully diluted number of shares.

EPRA NAV per share (€)

4. Dividends

Globalworth distributes bi-annually at least 90% of its EPRA Earning to its shareholders. On 8 March 2023, the Board of Directors of the Company approved the distribution of an interim dividend in respect of the six-month financial period ended 31 December 2022 of €0.15 per ordinary share, with the option to receive their net dividend in the form of Globalworth shares ("Scrip Dividend Shares") or cash. As a result, on 18 April 2023, the Company paid €630,224 in cash and issued 14,305,676 Scrip Dividend Shares at a reference price of €2.28 per share.

On 30 August 2023, the Company announced that its Board of Directors had approved the payment of an interim dividend in respect of the six-month financial period ended 30 June 2023 of €0.14 per ordinary share with the same option to receive their net dividend in the form of Globalworth shares ("Scrip Dividend Shares") or cash.

The results for the period are set out in the consolidated statement of comprehensive income on page 30.

5. Financing Review

The global business and economic landscapes have encountered turbulence amid the persistent uncertainty in the public debt market. This uncertainty can be attributed to the surge in inflation, escalating interest rates, and the heightened probability of an impending recession. Consequently, the outlook has become notably uncertain.

Throughout this period, our unwavering focus has remained on maintaining liquidity. Concurrently, we have diligently executed our liability management strategy, especially with regard to forthcoming debt maturities in 2025. Additionally, we have steadfastly implemented our "local landlord" approach to drive effective management of our business operations.

Debt Summary

The total debt of the Group at 30 June 2023 was €1.389 billion (31 Dec. 2022: €1.456 billion) comprising of medium to long-term debt, denominated entirely in Euro. The majority of the debt is in two bonds totalling €0.85 billion, with bank loans of €0.5 billion.

In the first half of 2023, we bought back €100m nominal value of our €550 million bond by paying a cash consideration of €83.2m thus reducing the debt maturing March 2025.

In addition, during the period in the first half of 2023, we:

· paid the annual coupon of the 2025 bond;

· drew the €110 million ten-year term secured debt facility which was signed with Erste Group Bank AG and Banca Comerciala Romana SA in December 2022 for refinancing of the Company's logistics / light industrial portfolio in Romania. Out of the €110 million, €96.5 million was made available to the Group and the difference to one of the Group's joint venture companies;

· repaid the €60 million outstanding balance on the RCF.

The Group continuously strives to maintain a low weighted average interest rate cost, which as at 30 June 2023 was 3.29% (2.89% at 31 Dec 2022), a small increase having in view the despite EURIBOR increasing c.130 basis points in the first half of the year while the average maturity period improved to 3.4 years (3.3 years at 31 December 2022), as depicted in the chart below.

In this higher inflation and interest rate environment, it is important to note that at the end of the period, Globalworth had c.85% of its debt facilities at fixed interest rates (77.3%) or floating interest rates which are however hedged (7.7%).

Weighted average interest rate vs debt duration to maturity

Servicing of Debt During 2023

In the first half of 2023, we repaid bank debt principal of €63.4 million, €100million nominal value of the 2025 Eurobond for a cash consideration of €83.2million and total accrued interest of €24.6million on the Group's outstanding debt facilities.

Maturity profile (by year) of the principal loan outstanding at 30 June 2023 (€m)

Liquidity & Loan to value ratio (LTV")

Managing our financial and operational resources has been a key area of focus for the Group, especially since the COVID-19 pandemic outbreak, and this careful management has carried on throughout this period of higher volatility and uncertainty.

As of 30 June 2023, the Group had cash and cash equivalents of €130.5 million (31 December 2022: € 163.8 million) of which an amount of €5.6 million was restricted due to various conditions imposed by the financing Banks. In addition, the Group had available liquidity from committed undrawn loan facilities of €265million.

The Group's loan to value ratio on 30 June 2023 was 42.7%, same as at 31 December 2022. This is consistent with the Group's strategy to manage its long-term target LTV of around or below 40%.

Debt Structure as at 30 June 2023

Debt Structure - Secured vs. Unsecured Debt

The majority of the Group's debt on 30 June 2023 is unsecured: 67.4% (31 December 2022: 75.4%), with the remainder secured with real estate mortgages, pledges on shares, receivables and loan subordination agreements in favour of the financing parties.

Debt Denomination Currency and Interest Rate Risk

Our loan facilities are entirely Euro denominated and bear interest based either on one month, three months or six months Euribor plus a margin (22.7% of the outstanding balance compared to 19.3% on 31 December 2022), or at a fixed interest rate (77.3% of the outstanding balance compared to 80.7% at 31 December 2022).

The high degree of fixed interest rate debt ensures a natural hedging to the Euro, the currency in which the most significant part of our liquid assets (cash and cash equivalents and rental receivables) is originally denominated and the currency for the fair market value of our investment property. Based on the Group's debt balances on 30 June 2023, an increase of 100 basis points in the EURIBOR will result in an increase of interest expense of €2.1 million per annum.

Debt Covenants

As of 30 June 2023, the Group is in compliance with all of its debt covenants.

The Group's financial indebtedness is arranged with standard terms and financial covenants, the most notable as at 30 June 2023 being the following:

Unsecured Eurobonds, Revolving Credit Facility and IFC loan

· the Consolidated Coverage Ratio, with minimum value of 200% (150% applicable for the Revolving Credit Facility and IFC loan)

· the Consolidated Leverage Ratio, with maximum value of 60%

· the Consolidated Secured Leverage Ratio with a maximum value of 30%, and

· the Total Unencumbered Assets Ratio, with minimum value of 125% (additional covenant applicable for the Revolving Credit Facility and IFC loan).

Secured Bank Loans

· the debt service cover ratio ('DSCR') / interest cover ratio ('ICR'), with values ranging from 120% to 350% (be it either historic or projected), and

· the LTV ratio, with contractual values ranging from 60% to 83%

6. Principal Risks and Uncertainties

The key risks which may have a material impact on the Group's performance, together with the corresponding mitigating actions, are presented on pages 100 to 104 of the Annual Report for the year ended 31 December 2022, which is available at www.globalworth.com.

These risks comprise the following:

· Market conditions and the economic environment, particularly in Romania and Poland

· Changes in the political or regulatory framework in Romania, Poland or the European Union

· Execution of investment strategy

· Valuation of the portfolio

· Inability to lease space

· Counterparty credit risk

· Sustainable portfolio risk and Response to Climate Change

· Lack of available financing and refinancing in interest environment

· Breach of loan covenants

· Changes in Interest and Foreign Exchange Rates, and

· Compliance with fire, structural, health and safety, or other regulations

There have been no new risks identified during the six-month period ended 30 June 2023, and the identified risks are expected to continue to remain relevant during the second half of 2023.

7. Going Concern

These financial statements are prepared on a going concern basis. The Directors believe that it is appropriate to adopt the going concern basis in preparing the financial statements. The Directors based their assessment on the Group's detailed cash flow projections for the period up to 31 December 2024. These projections take into account the available cash balance of the Group as of 30 June 2023 of €130 million (see note 15 to the financial statement), the available undrawn financing facilities of €265 million, the latest contracted rental income, 99% collections rate of rents invoiced and due, anticipated additional rental income from new possible lease agreements during the period covered by the projections, modification of existing lease contracts as well as repayment of contracted debt financing due until cash flow projection period and value accretive CAPEX. During this assessment, the Group has also considered, but not relied upon, other options available to generate or conserve additional cash, to reduce debt levels and to fund value accretive capital expenditure and tenant incentives. These include but are not limited to extension of debt falling due in projected period, the potential disposal of assets; the opportunity to offer scrip alternative instead of cash dividend and the potential raising of additional funds.

GLOBALWORTH REAL ESTATE INVESTMENTS LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2023

INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2023

The financial statements were approved by the Board of Directors on 18 September 2023 and were signed on its behalf by:

Andreas Tautscher,

Director

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2023