Echo Investment (ECH) Q3 2024 earnings summary

Executive summary

• Achieved strong residential sales in Q3 2024 with 589 units sold, a 19% year-over-year increase, despite a broader market decline.

• Signed agreement to sell React office building in Łódź for EUR 32.5 million, matching book value, signaling a recovering investment market.

• Advanced Towarowa 22 project in Warsaw, with first office building 70% leased and residential sales performing well.

• Student Space JV rapidly advancing, with 1,200 beds under construction and a target of 5,000 beds in 3–5 years.

• Resi4Rent PRS platform on track for over 6,000 units by early 2025, aiming for 10,000+ units by 2026, with high occupancy and strong rents.

Financial highlights

• Revenue for Q1–Q3 2024 reached PLN 806.8 million, up from PLN 650.5 million year-over-year.

• Q3 net profit in line with market consensus, but net profit for Q1–Q3 2024 was PLN 24.0 million, down from PLN 45.2 million year-over-year.

• Gross margin in Q3 2024: 31% on apartment sales, 35% on rents, fit-out, and sales to Resi4Rent.

• Total assets as of 30.09.2024 were PLN 6,648 million, an 11.5% increase from year-end 2023.

• Short-term debt reduced, with EUR 209 million in bonds repaid in Q4; further debt reduction planned.

Outlook and guidance

• Targeting annual residential sales of 4,000 units in coming years, with 2,300–2,400 sales expected for 2024.

• Resi4Rent aims to reach 11,000 operating units by 2026, maintaining market leadership in PRS.

• Student Space platform plans to deliver over 3,000 beds by September 2026 and at least 5,000 beds in 3–5 years.

• No bond issuance planned for 2025; proceeds from asset sales to be used for debt reduction and dividends.

• Dividend policy: up to 70% of consolidated net profit distributed annually, subject to financial condition and strategy.