Archicom (ARH) Q2 2024 earnings summary

Executive summary

• Nationwide residential developer with 24 ongoing projects in Poland's largest cities, focusing on Warsaw and Wrocław, and systematic growth in the residential real estate market.

• Strong financial position, cash generation, and a robust dividend policy support expansion and leadership ambitions.

• Strategic goal to sell 2,600 units in 2024 and 4,000 units annually from 2025 onward.

• Strategic cooperation agreement signed with Echo Investment S.A. to strengthen market position and avoid conflicts of interest.

• Commercial activities classified as discontinued, with focus on residential segment.

Financial highlights

• H1 2024 revenue rose 48% year-over-year to PLN 325.3m, with gross profit up 29% to PLN 128.1m.

• Gross margin decreased to 39.4% from 45.1% in H1 2023.

• Net profit for H1 2024 was PLN 40.7m, down from PLN 55.6m in H1 2023.

• 397 units delivered in H1 2024, compared to 335 in H1 2023.

• Dividend of PLN 0.64 per share paid in July 2024, following an advance of PLN 0.46 per share in January 2024.

Outlook and guidance

• Targeting 2,600 units sold in 2024 and 4,000 units annually from 2025.

• Focus on expanding land bank and launching new projects, especially in Warsaw and Wrocław.

• Ongoing optimization of construction costs and project margins.

• Key drivers include handover of units in major projects, cost management, and valuation/sale of the City 2 office building.

• Positive macro factors: new government housing program in 2025, stable or lower interest rates, rising wages, and low unemployment.