Atal S.A. (1AT) Q3 2024 earnings summary

Executive summary

• Revenue for the first three quarters of 2024 reached PLN 1,215.5 million, up 41% year-over-year, with net profit rising 30% to PLN 254.8 million, driven by strong residential development sales.

• 1,630 flats sold and 2,021 flats handed over in 1-3Q 2024; 42 projects (9,061 flats) under construction and 41 projects (11,724 flats) planned.

• Land purchases in the first three quarters totaled PLN 324 million, supporting future development of 185,000 sqm; land bank at end-September allows for 649,000 sqm of saleable area.

• The group operates in eight branches across Poland, maintaining a robust market position with diversified operations in major cities.

• No significant seasonality, but revenue peaks align with project completions.

Financial highlights

• Gross profit reached PLN 333 million, with a net profit of over PLN 254 million for the period; gross margin on sales was 27.4% and net margin 21.0%, both slightly down year-over-year.

• Operating income rose 26% to PLN 291.6 million; EPS increased to 5.89 from 4.95.

• Inventory increased to PLN 3,141 million, mainly due to work in progress; total assets grew 2% to PLN 3.61 billion.

• Net debt ratio increased to 0.16 from -0.09 at year-end 2023; equity stable at PLN 1.7 billion.

• Cash and cash equivalents at period end were PLN 156.9 million, down from PLN 620.1 million at year-end 2023.

Outlook and guidance

• Management expects no major changes in Q4 results and anticipates a potential market rebound in Q2 2025.

• Sales in Q4 are expected to be slightly better than Q3 but below initial forecasts, with full-year sales likely around 2,100 flats.

• Gross margin forecast for Q4 2024 is 25%, with Q1 2025 expected at 27-28%.

• 650 flats not yet transferred as of 30.09.2024; 88% of 2024 handover projects contracted.

• 3,062 flats in projects under construction for 2025, with 43% already contracted.