One United Properties (ONE) H1 2024 earnings summary

Executive summary

• Sold and pre-sold 452 apartments and commercial spaces totaling 43,809 sqm, generating EUR 123.3 million in sales and pre-sales in H1 2024, with 66% of available units under development and delivered already sold as of June 30, 2024.

• Net profit reached EUR 46 million (RON 228.7 million), with gross profit EUR 53.2 million and turnover EUR 139.9 million (RON 699.4 million) in H1 2024.

• Rental portfolio expanded, with 8,100 sqm of office space leased/re-leased and 6,770 sqm of contract extensions, reaching a 95% occupancy rate; rental income, including tenant services, grew 19% year-over-year to RON 75 million.

• Total assets reached RON 5.2 billion, up 5% from year-end 2023, with a cash position of RON 336.1 million after significant development activity.

• Gross loan-to-value ratio at 30%, net debt at 16% of total assets, reflecting low leverage.

Financial highlights

• Residential segment revenue was EUR 105.4 million, down 14% year-over-year, but profit rose 6% to EUR 38.3 million; net margin from residential sales improved from 29.5% to 36.3%.

• Rental income increased 18% to EUR 15.1 million (RON 75 million), with commercial segment profit up 25% year-over-year.

• Operating activity result was EUR 57.9 million, down 19% due to lower investment property fair value gains; excluding this, operating activity increased 6%.

• Administrative costs rose 11% to EUR 8.5 million (RON 42.3 million), reflecting business expansion.

• Cash position at EUR 67.5 million (RON 336.1 million) after a 20% decline due to development activity.

Outlook and guidance

• EUR 331 million in cash to be collected by 2026 from signed contracts as of June 30, 2024.

• Management maintains the 2024 budget, targeting turnover of RON 1.75 billion and net profit of RON 525.2 million, a 17% increase over 2023.

• Building permits obtained for Mondrian Bucharest (lifestyle hotel) and One Technology District (semiconductor R&D center), enabling new project launches.

• Capital increase of EUR 70 million (up to RON 350 million) to accelerate entry into affordable premium housing for the middle class, aiming to double business in five years and quadruple in a decade.

• No material regulatory changes expected in Romania; stable environment anticipated, though political uncertainty due to 2024 elections may impact project approvals.