Echo Investment (ECH) Q2 2024 earnings summary

Executive summary

• Achieved higher revenue and net profit in H1 2024, with net profit attributable to shareholders of PLN 15.2 million and total assets exceeding PLN 6.5 billion, surpassing consensus expectations.

• Major progress on Towarowa 22, a 190,000 sqm mixed-use project in Warsaw, with master plan approval, construction underway, and office and residential phases progressing toward 2028 completion.

• Expanded into student housing with Student Space JV, targeting 5,000 beds in 3–5 years, with 1,200 beds under construction in Kraków and five premium locations secured in Warsaw and Kraków.

• Significant land bank expansion, especially in Warsaw, supporting growth in residential for sale and rent, and robust balance sheet with active land acquisition.

• Launched Archicom Collection brand for premium residential projects in Warsaw and Wrocław, with construction and sales started in H1 2024.

Financial highlights

• H1 2024 revenue: PLN 489.0 million (up from PLN 457.0 million in H1 2023); net profit attributable to equity holders: PLN 15.2 million (up from PLN 9.1 million); operating profit: PLN 24.2 million (down from PLN 32.1 million); cash position: PLN 523 million as of 30.06.2024.

• Residential sales reached 472 apartments in Q2 2024; 882 units sold in H1 2024 (up 10% year-over-year); 93% of completed units in 2024 already sold.

• Inventory value rose 28% to PLN 1,989 million; total assets as of 30.06.2024 were PLN 6,573 million, a 10% increase from year-end 2023.

• Net debt ratio stood at 43.2%; equity attributable to shareholders: PLN 1.71 billion.

• EPS: PLN 0.04 (up from PLN 0.02 year-over-year).

Outlook and guidance

• Targeting 2,600 residential sales in 2024 and 4,000 units annually from 2025, supported by a landbank of over 10,000 units and ongoing acquisitions.

• Resi4Rent platform to reach 10,000 units by end of 2025 and 11,000 by 2026, with 8,200 completed and remaining under construction.

• Student housing to deliver 1,200 units in 2025, aiming for 5,000 beds in key cities within 3–5 years, with 60% of the pipeline secured.

• Focus on city center office projects in Warsaw, Krakow, and Wroclaw, leveraging strong leasing demand and limited new supply.

• Management expects continued strong demand in residential and rental segments, with stable office and retail performance.