Due to the very positive results in the previous financial year, Warimpex once again distributed a dividend for the first time in several years. The dividend amounted to six cents per share and was paid out after it was approved by the Annual General Meeting in June 2018.

However, the elimination of the eight hotel holdings sold last year also impacted the development of operating activities. The reduced property portfolio, the lack of gains from the disposal of properties in the current financial year as well as non-cash exchange rate losses led to a loss of EUR 4.3 million for the first half of 2018. Our express goal for 2018 and the coming years is to resume growing and build up our property portfolio. To this end, the completion of ongoing projects, the development of new projects, and the acquisition of cash flow-generating assets with potential for the future are now at the top of our agenda – in line with our strategic orientation. At the same time, by completing selective property sales at favorable terms we can secure proceeds that will enable us to rapidly execute reinvestments.

In this context, we already have some successes to report. For example, the Ogrodowa office building in the Polish city of Łódź has just been completed and the first tenants have already moved in. Overall, leases have already been signed for over 40 per cent of the roughly 28,000 sqm of space. The second project that is currently under construction, the Mogilska office building in Krakow, is expected to be completed in the first quarter of 2019. More than 60 per cent of the roughly 12,000 sqm of space have already been let out. Also, in Krakow planning is proceeding for the construction of an office building with around 21,000 sqm of space next to the Chopin Hotel. In Białystok, we own a property on which we plan to build four office buildings with up to 73,000 sqm of net floor space in multiple phases. Additional future development projects are currently being planned for properties owned by Warimpex in St. Petersburg (roughly 130,000 sqm).

In terms of transactions, we acquired the fully occupied B52 office building in Budapest with over 5,200 square metres of space at the end of May, and the income from this property will further increase our operating cash flow. We also see additional potential in Budapest as the local office market is currently in a phase of rising rents. In a separate transaction we disposed of a development property that is also located in Budapest at favourable terms in May.

In the current financial year, we still expect a significant reduction of interest costs due to the early redemption of bonds and the elimination of project loans. Our express goal for the coming months is to quickly complete our current developments and rapidly get our planned projects up and running. This will strengthen our earnings potential and give us plenty of reason to look to the future with optimism.