Echo Investment (ECH) Q2 2025 earnings summary

Executive summary

• Strategic focus on disposing of commercial assets, reducing equity in the sector, and reinvesting in high-potential Warsaw CBD office projects and the growing living sector, including residential for sale, PRS, and student housing.

• Major transactions include the sale of City 2 (EUR 31m), a 30% share in Towarowa 22/Office House (EUR 160.5m valuation), and a landmark PRS deal for 18 projects valued at PLN 2.4 billion.

• Record-breaking 34% year-over-year increase in apartment sales in H1 2025, with over 1,100 units sold and a robust landbank of 12,600 units.

• Ongoing shift in the balance sheet with increased residential inventory, reduced commercial investments, and lower debt, supported by strong cash position of PLN 291 million.

• Student housing platform expanded, with 1,200 beds delivered, 500 under construction, and a target of 5,000 beds in 3–5 years.

Financial highlights

• H1 2025 sales revenue was PLN 464.9 million; Q2 2025 revenue was PLN 370.3 million, with gross margin on residential sales at 35%.

• Q2 2025 net loss attributable to equity holders was PLN -113.6 million; H1 2025 net loss was PLN 199.1 million, mainly due to fair value adjustments on commercial asset sales.

• Adjusted operating profit for Q2 2025 was PLN 59.9 million, reflecting underlying business strength.

• Net debt ratio stands at 38.8% as of 30.06.2025, with a target to reduce it closer to 30–35% as commercial assets are sold.

• Cash flow from operating activities was PLN 110.4 million, a significant improvement from negative PLN 406.3 million in H1 2024.

Outlook and guidance

• Majority of 2025 residential handovers concentrated in Q3 and Q4, with over 80% already sold and significant profit recognition expected.

• Continued growth in residential for sale, PRS, and student housing, with a target of 5,000 student beds in 3–5 years.

• Ongoing investment in Warsaw CBD office projects and selective regional office developments.

• The group expects continued strong demand in the residential sector, supported by macroeconomic factors such as lower interest rates and government support programs.

• Risks include limited land supply, potential wage growth slowdown, and persistent high interest rates affecting mortgage access.