The Warimpex Group remained on solid financial footing in the first half of 2021, its operational performance is improving, and the development projects in the office segment are proceeding according to plan. The newly renovated greet hotel in Darmstadt has also celebrated its opening. The Group’s result for the period climbed into positive territory in the first half of 2021, rising from minus 21.7 million in the prior-year period to EUR 1.7 million.
Solid earnings development
Operating business remained positive in the first half of 2021. Revenues from the rental of office properties declined by 9 per cent to EUR 9.7 million due to the depreciation of the Russian rouble by roughly 20 per cent compared with the first half of 2020. Overall, revenues in the hotel segment fell by 9 per cent to EUR 2.2 million as a result of the pandemic. In the second quarter, however, revenues from hotels improved to EUR 1.5 million (Q2 2020: EUR 0.2 million). Total revenues dropped by 7 per cent to EUR 12.8 million, while the expenses directly attributable to revenues were reduced by 33 per cent to EUR 4.4 million. This results in gross income from revenues of EUR 8.4 million, which represents an increase of 17 per cent versus the prior-year period.
EBITDA improved from EUR 0.3 million to EUR 5.0 million due to the higher gross income and lower administrative expenses. EBIT climbed into positive territory, increasing from minus EUR 9.2 million to EUR 5.9 million. Along with the improved operating result, this can be attributed to a positive result from property valuations (EUR 2.0 million), compared with a measurement loss of EUR 5.4 million in the prior-year period.
Finance income (including earnings from joint ventures) went from minus EUR 10.6 million to minus EUR 3.6 million. This includes gains from currency translation in the amount of EUR 0.7 million (2020: loss of EUR 4.7 million) and losses from joint ventures of EUR 0.9 million (2020: loss of EUR 2.5 million) in connection with negative hotel results.
Overall, this led to an improvement in the result for the period for the Warimpex Group from minus EUR 21.7 million to EUR 1.7 million in the first half of 2021. The triple net asset value also increased from EUR 2.46 per share to EUR 2.56 per share.
Development projects in the office and hotel segments – opening of greet hotel in Darmstadt
In the development segment, further progress is being made on current projects. In Poland, building permits were issued for both the Mogilska Phase III office development in Krakow and the office development project in Białystok. In line with Warimpex’s strategy, construction will start as soon as an appropriate level of tenant interest has been secured. Also in Krakow, an office building with a total lettable floor area of roughly 21,000 square metres is being planned next to the Chopin Hotel.
At AIRPORTCITY St. Petersburg, work is under way on the completion of Avior Tower 1, which will offer roughly 16,000 square metres of lettable office space. The building shell is already complete, and the opening is scheduled for the second quarter of 2022.
In the German city of Darmstadt, the newly renovated hotel was being opened under the name greet hotel Darmstadt on 30 August. Warimpex acquired the hotel in 2019 and refurbished and adapted it to the Accor brand “greet” while it was closed due to the pandemic. With a total of 330 hotel and long-stay rooms, over 4,500 square metres of conference, event, and exhibition space, as well as 800 square metres of office space that can also be rented on a short-term basis, the greet hotel Darmstadt is one of the biggest conference and event centres in the Rhine-Main region. An office building with roughly 13,800 square metres of lettable space is also to be built next to the greet hotel. It will be very much in line with the current trends with regard to sustainability criteria. The preparation of a new development plan and the permit planning are already at an advanced stage.
Outlook
In 2021, Warimpex’s activities will focus on making preparations for construction for its development projects, obtaining building permits, and continuing ongoing construction. The topic of sustainability is playing an increasingly important role here. After all, energy efficiency, the use of renewable energy sources, and the reduction of carbon dioxide emissions are key requirements for the construction and operation of buildings. Therefore, Warimpex aims to obtain further sustainability certifications for the property portfolio. In Poland, for example, the two office buildings Mogilska 43 Office in Krakow and Ogrodowa Office in Łódź have been awarded BREEAM In-Use – Excellent certification, which confirms the properties’ high environmental standards.
Following the lifting of many of the coronavirus measures, Warimpex expects to see an upward trend in the hotel segment and continued stable development in the office segment in the second half of 2021. Based on the positive half-year results – despite hotel closures and pandemic-related restrictions – Warimpex expects to generate a profit from its operational activities for the 2021 financial year as a whole.