• GTC revenues increased 138% y-o-y to EUR 83.5m in H1 2009
• Value of investment property reached EUR 2bn
Globe Trade Centre S.A. (GTC) has published its H1 2009 results. Operating revenues were EUR 83.5m (+138% y-o-y), while the gross margin from operations rose 69% y-o-y to EUR 41.7m. The net loss of EUR 9.56m in H1 2009 resulted mainly from write-offs on completed investment property. Total assets were EUR 2.6bn, and the value of investment property was EUR 2bn. 80% of GTC’s debt matures in 2014 or later.
Growth in both rental and residential revenues contributed to strong top-line performance. Revenues from rental operations increased 40% y-o-y to EUR 43.5m, while residential sales surged 889% to EUR 40m.
In Q2 2009 GTC recorded EUR 38m in operating revenues. Rental revenues were EUR 21.9m (+33% y-o-y). Residential sales in Poland (Osiedle Konstacja), Serbia (Park Apartments), Romania (Rose Garden) and Hungary (Sasad Resort) contributed to EUR 16.4m in contract income. GTC achieved an impressive 79% margin on rental operations (vs 76% in Q1 2009) and maintained a 20% gross margin on residential sales.
In the first half of 2009 GTC wrote off approximately EUR 55.2m from the value of its completed assets, mainly as a result of expansion in investment yields. This loss was mostly offset by the revaluation of Investment Property under Construction (IPUC) and newly completed property, which contributed in total EUR 50.7m profit.
During Q2 2009, together with its partner Unibail Rodamco, GTC successfully negotiated a refinancing loan for Galeria Mokotów, a leading shopping mall in Poland, with a consortium of German banks. At the beginning of August 2009 one of the largest refinancing transactions in the region was finalised, providing Galeria Mokotów with a loan of EUR 205m.
The cash level at GTC may reach EUR 200m at the end of the year, following the drawdown of the loan.
Earlier this year GTC secured a EUR 147m development and refinancing loan for Galerie Harfa, its retail and office project in Prague, from a German bank.
GTC capitalises on its long-term relations with leading European banks, obtaining financing at attractive terms even during the credit crunch. At the end of H1 2009 the average cost of financing for GTC stood at 6.1%. More importantly, 80% of GTC’s debt matures in 2014 or later.
The company is moderately leveraged, with a 48% long-term debt to total assets ratio.
In July 2009 GTC completed CB Kazimierz, a 15,300 sqm office building in Cracow, handing over the space to its main tenants – State Street (12,000 sqm) and Ernst & Young (1,000 sqm).
In October 2009 GTC is scheduled to complete and open Galeria Jurajska in Częstochowa – the largest investment under development in GTC’s portfolio. The shopping mall of 49,000 sqm NRA, now nearly fully let, has attracted leading international retailers such as Peek & Cloppenburg, Zara, H&M and C&A, as well as domestic operators such as Reserved and Alma Market, among others.
In H2 2009 City Gate, a landmark office development in Bucharest, is scheduled for completion. With net rentable area of 44,000 sqm in two towers, the project has been more than 80% let, mainly to renowned international tenants.
GTC is adjusting its pace of development to the market. With financing secured for all projects under construction, GTC expects to complete approximately 300,000 sqm of net office and retail space in 2009–2010.
“GTC has an extensive land bank and the financial resources required to commence new projects,” said Eli Alroy, Chairman of the Supervisory Board of GTC. “It is well geared up to accelerate its expansion once markets return to sustainable growth.”