Archicom (ARH) Q3 2024 earnings summary

Executive summary

• Achieved strong sales growth with 1,471 units sold in 9M 2024, up 12% year-over-year, and 589 units sold in Q3 2024, up 20% year-over-year, ranking second in the market for 9M and first for Q3 sales growth dynamics.

• Consolidated revenue for 9M 2024 reached 567,588 thousand PLN, up 79% year-over-year, with net profit at 77,558 thousand PLN, down from 86,143 thousand PLN due to discontinued commercial operations.

• Expanded land bank to approximately 10,000 units across six major Polish cities and secured over 110,700 sqm of usable area for future development.

• Focused on residential development, with commercial activity discontinued and the City 2 office building actively marketed for sale.

• Maintained a strong market position, ranking fourth among listed residential developers in Poland by sales volume.

Financial highlights

• Revenue for 9M 2024 reached PLN 567.6 million, up 79% year-over-year; gross profit from sales was PLN 216.5 million, up 50% year-over-year.

• Gross margin from continuing operations was 38.1%, down from 45.5% due to a shift in the mix of handovers.

• Net profit for 9M 2024 was PLN 77.6 million, compared to PLN 86.1 million in 9M 2023, mainly due to a loss from discontinued commercial operations.

• Operating profit (EBIT) increased to PLN 108.4 million from PLN 96.0 million year-over-year.

• EBITDA for the period was 113,781 thousand PLN, compared to 313,978 thousand PLN in the previous year.

Outlook and guidance

• Sales target for 2024 is 2,400–2,500 units, with a goal of exceeding 3,000 units in 2025 and reaching 4,000 units annually in the following years.

• Key drivers for Q4 2024 include handover of apartments in major projects in Wrocław and Łódź, and the valuation/sale of the City 2 office building.

• Continued expansion of the land bank and selective project launches in high-demand locations.

• Ongoing focus on cost optimization and maintaining high project margins.

• Market expects a new government housing program in 2025, which could boost demand if implemented.