Globe Trade Centre S.A. (GTC) released today its Q3 2010 results. Results are prepared in accordance with the International Financial Reporting Standards (IFRS) and presented in Euro.
Q3 2010 highlights
- Rental revenues up significantly to EUR 31m in Q3 2010 (+39% yo- y)
- Gross margin from operations increased to EUR 23m (+28% y-o-y)
- Revaluation gain of EUR 3m posted for the quarter
- Net income of EUR 5m up significantly from net loss of EUR 34m last year.
- Stable large cash position of EUR 199m
“GTC’s third quarter results reflect an improvement in company’s operations. We are seeing signs of recovery in several markets, proved by the tenants’ demand for office and retail space in new projects. With significant pipeline of properties under construction, GTC will be able to capture those opportunities ahead of the curve” – says Eli Alroy, the Chairman of Supervisory Board.
Total revenues from operations increased by 10% year-on-year to EUR 37m, mainly due to 39% growth in rental income to EUR 31m, driven by income from newly completed buildings and improved occupancy. The operating margin on rental activity was 74%.
An increase in rental revenues was however partially offset by lower revenues from residential sales. Residential sales in Q3 2010 were EUR 6m (down from EUR 11m in Q3 2009), with a decrease in the number of apartments and houses available for sale.
Gross margin on operations increased 28% year-on-year, to EUR 23m.
Positive revaluation of our investment property of EUR 3m indicate continued improvement in both the investment and the occupancy market.
Profit from operations improved significantly to EUR 21m from loss of EUR 30m last year.
Financial expenses were EUR 20m (vs. EUR 13m a year ago) mostly due to an increase in the project financing of new developments as well as refinance borrowing.Average cost of debt financing remains stable at 6%.
“With its large cash resources, long debt maturity and proven track record, GTC is a reliable partner for the leading European banks. We are able to secure financing at favourable terms, which nowadays is a key factor for real estate development” – comments Erez Boniel, CFO and Member of the Management Board in GTC.
GTC maintains favourable structure of debt maturity, with approx 50% of debt expiring in 2016 or later.
Net income of EUR 5m up significantly from a net loss of EUR 34m last year.
On 29 October 2010, GTC finalized sale of Topaz and Nefryt office buildings to Rreef Investment GmbH for the total amount of EUR 79m. Proceeds from the transaction, after debt repayment, generated free cash of EUR 21m.
In September 2010, GTC Romania, together with its partner Blue House, finalized a EUR 80m refinancing loan agreement for City Gate – the award-winning office building in Bucharest. The agreement was concluded with consortium of banks including Alpha Bank Group, Bank of Cyprus and Eurobank EFG Group.
“This was the largest real estate refinancing transaction concluded in Romania this year” – said Hagai Harel, International Development Manager at GTC. “It was also one of the first major commercial real estate loans in Romania since the beginning of the financial crisis.”
As another sign of recovering markets in South Eastern Europe, GTC and French hypermarket chain Cora signed 9.000 sq m lease agreement for Galleria Arad in Romania. Cora in Galleria Arad will be the first store of Romania Hypermarche in the city. Tenant list includes also Reserved, Sprider, Leonardo, House of Art, Fox, Cinema City, Tina R and Altex.
On 11 November 2010 Galeria Harfa in Prague, a modern mixed-use shopping mall and office complex, opened. Despite difficult market conditions, GTC managed to secure financing for such a large project and to achieve 90% occupancy at the opening, with international retailers such as H&M, C&A, Marks and Spencer, New Yorker, Sephora, as well as Spar supermarket as anchor tenants.
Also on 11 November 2010 GTC opened Galleria Stara Zagora in Bulgaria. The total lease area of Galleria Stara Zagora is 25,000 sq m. List of tenants includes many international and local brands such as Zara, Bershka, Stradivarius, Pull & Bear, Reserved, Deichman, as well as the first in town Cinema City multiplex.
GLOBE TRADE CENTRE S.A. (GTC S.A.) is one of the leading developers in the New Europe and was established in 1994 in Warsaw. Currently it operates in Poland, Hungary, the Czech Republic, Romania, Serbia, Croatia, Slovakia, Bulgaria, Russia and Ukraine.
GTC develops projects and manages completed properties in three key sectors of real estate: office buildings and parks, retail and entertainment centers and residential sector.
GTC has developed about 800,000 sq m of net space and currently is the owner of completed commercial property with a combined net area of about 565,000 sq m. GTC also holds an impressive portfolio of investment at various stages of development which will facilitate the construction of 1.7 million sq m of commercial and residential space. GTC’s total assets exceed EUR 2.7 billion.
GTC’s shares are listed on the Warsaw Stock Exchange on the prestigious WIG20 index. The company’s shares are also included in the international MSCI index and Dow Jones STOXX Eastern Europe 300 index, as well as the GPR250 index which comprises the 250 biggest and most liquid real estate companies of the world. Among GTC’s shareholders are many of the biggest Polish and international institutional investors.