The Warimpex Group achieved a positive operational performance in 2022. A look at the financial metrics shows that nearly every key indicator improved significantly versus the prior year. The profit for the period for the Warimpex Group increased from €12.0 million to €42.9 million. The positive development can be attributed primarily to higher occupancy at the office properties in Poland and the first-time full consolidation of an office property in St. Petersburg.
“Despite challenging conditions, we can look back on positive business development for 2022. While the economic effects of the coronavirus pandemic faded away almost entirely over the course of the year, Warimpex has been focusing on the current geopolitical developments in connection with the conflict in Ukraine as well as the rise in inflation for over a year. Due to the uncertain economic conditions, we have decided not to propose a dividend for 2022 to the Annual General Meeting,” commented Warimpex CEO Franz Jurkowitsch.
Warimpex closes 2022 financial year with positive result for the period
Performance improvements for offices (plus 64 percent) and hotels (plus 92 percent) were the most significant drivers of the increase in total revenues to €45.1 million (plus 69 percent). In addition, an earnings contribution of €2.8 million came from the successful disposal of the B52 office building in Budapest, while no sales transactions were completed in the prior-year period. EBITDA rose to €16.5 million (plus 14 percent), primarily due to the higher gross income from revenues and the gains on the disposal of properties. This was countered by increases in expenses due to elevated inflation, the stronger rouble exchange rate, and the elimination of earnings from one-off effects in the prior year. EBIT increased by €15.5 million to €59.1 million due to the higher EBITDA and the improved result from property valuation. Finance income (including earnings from joint ventures) went from minus €0.6 million to minus €6.6 million. One-off effects were eliminated here, as well. In total, this resulted in a profit for the period of €42.9 million, up from €12.0 million in the prior-year period.
Office developments planned in Poland
While the B52 office building in Budapest was sold at the end of June 2022, the Red Tower, which was acquired in Łódź around the same time and offers over 12,400 sqm of lettable space, is currently being refurbished on a step-by-step basis. In addition, Mogilska 35 Office with roughly 11,900 sqm of space in Krakow is nearing completion, and the topping-out ceremony was celebrated after the reporting period in February 2023.
Russian business self-sufficient – no new developments planned
In Russia, Warimpex owns a 100 percent stake in the project companies responsible for AIRPORTCITY St. Petersburg, which are stable and self-sufficient. The properties are financed through local banks in local currency, have a solid capital base, and cover their liquidity needs themselves. This means that Warimpex’s Russian subsidiaries act autonomously and independently of the support of the parent company. At present, it is possible to continue the operational activities in Russia without significant restrictions. Avior Tower 1, which offers roughly 18,600 sqm of space, was completed in the third quarter of 2022 and has already been fully occupied since January 2023. New projects are not planned at present.
Sustainability and coworking offerings
Energy efficiency, the use of renewable energy sources, and reducing carbon emissions are core considerations in the construction and refurbishment of the company’s buildings because sustainability has been much more than a peripheral topic for Warimpex for quite some time. The properties Ogrodawa Office in Łódź and Mogilska 43 Office in Krakow were classified as Taxonomy-aligned in accordance with the EU Taxonomy Regulation for the first time and had already been awarded BREEAM In-Use – Excellent certification before that. The company generally plans to obtain sustainability certifications for all new developments.
In addition, Warimpex is initiating innovative office concepts as a response to the shift towards a more flexible working world. Coworking/flex office spaces have now been established at three properties – Ogrodowa Office and Red Tower in Łódź and Mogilska 43 Office in Krakow – and are managed via a separate subsidiary. Warimpex lets out workstations on a short- to medium-term basis and also offers excellent work infrastructure such as flexible partitioning and layouts as well as areas and conference rooms that are tailored to the needs of small and medium-sized businesses. These offerings are being received well and will therefore be expanded.
Outlook
The operational focus in 2023 is on making preparations for construction, obtaining building permits, and continuing ongoing construction and development activities. For example, Mogilska 35 Office is scheduled to be completed in the summer of 2023. In closing, Franz Jurkowitsch had the following comment: “The solid business development is based not least on the long-standing business strategy that affords us both the necessary flexibility to be able to react to market developments quickly and the long-term stability to excel at developing real estate projects in line with market requirements. We consistently succeeded in doing this in 2022 despite challenging market conditions and are thus starting off the new financial year with an optimistic outlook. The focus will continue to be on innovative and sustainable office developments with emphasis on Poland and Germany.”
