Warimpex generates positive result for third quarter
The Warimpex Group achieved a solid operational performance in the first three quarters of 2021. The hotel segment, in particular, recovered versus the previous year and there are also successes to report on the office and development side, with two new lease agreements and the start of construction on a property. The Group’s result for the period improved from a loss of EUR 31.2 million to a gain of EUR 2.5 million. The result for the third quarter alone also climbed into positive territory, rising from minus EUR 9.4 million to EUR 0.8 million.
“In Budapest, we recently signed a lease for roughly 1,370 sqm of space at B52 Office. We also concluded leases for the remaining space at Mogilska 43 Office in Krakow. Both buildings are now fully occupied. On the development side, we are making progress on our projects. In Krakow, we started construction on Mogilska 35 Office and in Darmstadt, the newly renovated greet hotel is welcoming more guests again following the restrictions due to the pandemic. With a total of 194 rooms and 37 conference, event, and project rooms spanning more than 4,500 sqm of conference space, the hotel is one of the biggest conference and event locations in the Rhine-Main region,” explained Warimpex CEO Franz Jurkowitsch.
A positive result for the first three quarters of 2021
Revenues from the rental of office properties declined by 5 percent to EUR 14.9 million compared with the first three quarters of 2020. This can be attributed to annualised average depreciation of the rouble by 12 percent versus the prior-year period. Following a difficult year in 2020, which was dominated by hotel closures and revenue declines due to the pandemic, the hotel segment enjoyed positive developments again: Revenues increased by 10 percent to EUR 3.3 million. Total revenues dropped by 2 percent to EUR 19.2 million, while the expenses directly attributable to revenues were reduced by 23 percent to EUR 6.9 million, in part due to coronavirus aid measures. This results in gross income from revenues of EUR 12.2 million, which represents an increase of 16 percent versus the prior year.
EBITDA increased from EUR 1.8 million to EUR 7.9 million due to the higher gross income and lower administrative expenses. EBIT improved considerably, climbing from minus EUR 8.9 million to EUR 8.3 million. Along with the higher operating result, this can be attributed to a positive result from property valuations, compared with a measurement loss in the prior-year period. Finance income (including earnings from joint ventures) went from minus EUR 20.2 million to minus EUR 5.4 million. This includes gains from currency translation in the amount of EUR 0.9 million (2020: loss of EUR 8.9 million) and losses from joint ventures of EUR 0.5 million (2020: loss of EUR 5.1 million) in connection with negative hotel results.
Overall, this led to an improvement in the result for the period for the Warimpex Group from minus EUR 31.2 million to EUR 2.5 million in the first three quarters of 2021.
Office developments in Poland, Russia, and Germany
Warimpex is currently focusing on making progress on ongoing development projects. In Krakow, construction has begun on Mogilska 35 Office, which will offer roughly 12,000 sqm of lettable space. A building permit has been issued for the office project in Białystok. In line with the company’s strategy, construction will start as soon as an appropriate level of tenant interest has been secured. Also in Krakow, an office building with a total lettable floor area of roughly 21,000 sqm is being planned next to the Chopin Hotel. At AIRPORTCITY St. Petersburg, the building shell for Avior Tower 1 – which will offer roughly 16,000 sqm of lettable office space – has been completed. The building is scheduled to open in the second quarter of 2022.
Warimpex is planning an office building with roughly 13,800 sqm of lettable space next to the greet hotel Darmstadt, which was recently opened under a new brand. It will be very much in line with the current trends with regard to sustainability criteria. The preparation of a new development plan and permit planning are already at an advanced stage.
The focus for the remainder of 2021 will continue to be on making preparations for construction, obtaining building permits, and continuing ongoing construction activities. Warimpex places particular emphasis on the topic of sustainability in the construction and operation of all of its properties, with a focus on energy efficiency, the use of renewable energy sources, and the reduction of carbon dioxide emissions. With this in mind, the company will continue striving to obtain sustainability certifications in the future. In Poland, the two office buildings Mogilska 43 Office in Krakow and Ogrodowa 8 Office in Łódź have been awarded BREEAM In-Use – Excellent certification, which confirms the properties’ high environmental standards.
“Due to the coronavirus situation, it remains difficult to make forecasts, especially with regard to the hotel sector. However, we expect stable development for the office segment. Warimpex is on solid financial footing and we are still confident that we will generate a profit from our operational activities for the 2021 financial year. We believe that we are in a solid position for the coming tasks and look forward to continuing the realisation of our projects,” commented Jurkowitsch.
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