Warimpex Finanz- und Beteiligungs AG saw a significant increase in the Group’s result for the period, which went from minus €18.7 million in the prior-year period to minus €0.5 million in the first quarter of 2021. Operating activities also developed positively, as revenues from office properties increased in local currency. However, the company reported a slight decline in euros due to the lower rouble exchange rate compared with the previous year. EBITDA and EBIT both improved and climbed into positive territory.
“The first reopening steps and the steady vaccination progress in the majority of European countries are leading to an improvement in the social and economic situation at the moment. However, combatting the COVID-19 pandemic remains a global challenge in 2021. The effects of the crisis still cannot be fully assessed at present, but experts are projecting an economic recovery and growth in nearly every sector for this year and next year – including in our markets, which naturally makes us optimistic,” said Franz Jurkowitsch, CEO of Warimpex.
“Warimpex remains on solid financial footing at the beginning of the 2021 financial year. The majority of our portfolio is made up of office properties with long-term leases that are contractually assured, and these properties generate cash flow on an ongoing basis. We concluded another lease for 900 sqm of space at Mogilska 43 Office in Krakow in May 2021, thus after the end of the reporting period. This brings the building’s occupancy rate to 98 percent, which is especially pleasing in light of the challenging market conditions at the moment,” he added.
Warimpex’s operational performance was positive once again in the first quarter of 2021. Revenues from the rental of office properties declined by 8 percent to €4.9 million due to the 15 percent decline in the rouble exchange rate compared with the first quarter of 2020. Before the conversion into euros, i.e. in local currency terms, the company achieved a slight increase in revenues from office properties. Revenues in the Hotels segment fell by 69 percent to €0.7 million as a result of the COVID-19 pandemic and the temporary hotel closures. Total revenues dropped by 24 percent to €6.1 million, while the expenses attributable to revenues were reduced by 38 percent to €2.5 million. This resulted in gross income from revenues of €3.5 million, which represents a decline of 8 percent.
EBITDA increased from €0.9 million to €1.6 million, primarily due to a reduction of expenses. EBIT climbed into positive territory, increasing from minus €2.4 million to €2.1 million. Along with the improvement in EBITDA, 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 €13.0 million to minus €2.5 million. This includes gains from currency translation in the amount of €0.3 million (2020: loss of €8.2 million) and losses from joint ventures of €0.8 million (2020: loss of €3.1 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 €18.7 million in the previous year to minus €0.5 million.
The current projects are progressing according to plan. In Poland, legally valid building permits have now been obtained for the Mogilska Phase III office development in Krakow and the office development project in Białystok. In line with Warimpex’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, development continues on Avior Tower 1, which will offer roughly 16,000 sqm of lettable office space. The building shell is already complete, and the opening is scheduled for the second quarter of 2022. In the German city of Darmstadt, a hotel that was acquired in 2019 is currently being renovated. The hotel is scheduled to reopen under a new brand in the autumn of 2021. In addition, an office building with roughly 13,800 sqm of lettable space is currently being planned next to the hotel and further space is being prepared for development.
In 2021, Warimpex’s activities will focus on making preparations for construction and obtaining building permits for its current development projects as well as on continuing ongoing construction and starting new construction work. At the same time, the topic of sustainability is becoming an increasingly important focus. Energy efficiency, the use of renewable energy sources, and the reduction of carbon dioxide emissions are no longer peripheral topics, but key requirements for the construction and operation of buildings. Therefore, Warimpex aims to obtain further sustainability certifications for the property portfolio.
In closing, Franz Jurkowitsch had the following comment: “On the whole, we expect the stable development of our business activities to continue – the current reopening measures in Europe will presumably lead to a recovery, particularly in the hotel industry. As such, our updated planning calculations show positive results from operating activities (EBITDA) and sufficient liquidity for 2021. With a crisis-tested team, deep roots in our core markets, excellent relationships with strong partners, and the economic strength of our business model and financial base, we are well equipped to overcome the current and coming challenges.”
