GTC posted EUR 10.5m net profit, EUR 102m adjusted EBITDA in 2023

GTC posted EUR 10.5m consolidated net profit attributable to shareholders of the parent company in 2023 against EUR 23.4m profit a year earlier, the company said.

Operating profit was EUR 45.3m vs. EUR 71.5m profit a year earlier. Adjusted EBITDA was €102m vs. €101m profit on this basis a year earlier.

Adjusted EBITDA was €102m (€101m in 2022). Net [total] profit was €12m in 2023 (€25m in 2022). The decrease is mainly due to a loss on property revaluation, the company announced.

Consolidated rental revenues reached €137.2m in 2023 against €123.6m a year earlier, while property services revenues reached €46.2m against €43m a year earlier.

"Rental and service revenues: Up 10% to €183m in 2023 compared to €167m in 2022. The Group recognised an increase in rental income of €11.1 million due to the completion of Pillar in Budapest, GTC X in Belgrade, Rose Hill Campus in Budapest and Matrix C in Zagreb. The Group also saw an increase in the average rental rate after indexation for inflation (CPI for Europe). The increase was partially offset by a decrease in rental income due to the sale of the Forest Offices office buildings in Debrecen in Q1 2023 and Cascade and Matrix in Q3 and Q4 2022, it report.

The gross margin from operations amounted to EUR 128 million in 2023, compared to EUR 119 million in 2022. This was mainly driven by an increase in rental and service revenues partially offset by an increase in service costs (due to inflation) combined with a decrease in gross profit from operations following the sale of office buildings in Hungary, Romania and Croatia, it also stated.

The loss on revaluation of investment properties is €56 million against a loss of €29 million in 2022. The loss in the period of the year ended 31 December 2023 is mainly due to a decrease in fair value on completed projects, primarily office buildings in Poland and Hungary, as a result of a gentle increase in the capitalisation rate, combined with higher vacancy rates and changes in ERV and working capital expenses not increasing the value of the properties, it explained.

Funds from operations (FFO I) is €71 million compared to €68 million in 2022, with FFO I per share of €0.12. FFO was adjusted for non-recurring tax and other expenses of €6m.

Total investments, including non-current financial assets, amounted to €2,416 million at 31 December 2023 (€2,418 million at 31 December 2022) and GAV amounted to €2,281 million at 31 December 2023 (€2,288 million at 31 December 2022. ), mainly as a result of the sale of the Forest Offices office building in Debrecen for €49 million and a loss on revaluation of investment properties of €57 million, partially offset by investments in assets under construction of €85.1 million and land of €13.1 million, it was also reported.

EPRA NTA per share was €2.15 compared to €2.22 at 31 December 2022. EPRA NTA was €1,232 million compared to €1,273 million at 31 December 2022.

Debt amounted to €1,274 million compared to €1,238 million at 31 December 2022. - The increase is mainly related to proceeds from long-term loans of €74.1 million combined with exchange rate differences on PLN- and HUF-denominated bonds of €9.9 million and was offset by repayments of €48.2 million in the period under review, it explained.

The weighted average maturity of the debt was 3.7 years and the average interest rate was 2.48% per annum. The net LTV ratio was 49.3% (44.5% at 31 December 2022) The net LTV ratio adjusted for cash in the escrow account was 47.2%. The interest coverage ratio (annualised consolidated coverage ratio) calculated based on EBITDA was 3.4x (3.5x at 31 December 2022).

The cash balance amounted to €60m at 31 December 2023 (€115m at 31 December 2022).

"Despite generally unfavourable market conditions, 2023 showed some signs of stabilisation. Thanks to these, we were able to maintain stable rental levels, expand our portfolio and, most importantly, increase revenues. Thus, at the end of the year, 87% of our commercial space was leased, with an average lease term of 3.5 years. Taking indexation into account, our revenues increased by 10% to EUR 183 million and FFO reached EUR 71 million. Our Group is open to the new opportunities and challenges that 2024 will bring," commented CEO Gyula Nagy.

In office space, the occupancy rate was at 84% as of 31 December 2023 (84% in December 2022) Last year, there were lease signings of 106,000 sqm in (119,500 sqm in 2022) and 34,900 sqm in Q4 2023 (33,000 sqm in Q4 2022).

The retail space had a occupancy rate of 96% as at 31 December 2023 (96% as at 31 December 2022) There were leases signed for 38.1 thousand m2 in 2023 (35 thousand m2 in 2022) and 11 thousand m2 in Q4 2023 (6.3 thousand m2 in Q4 2022):

Source: GTC and ISBnews