This article first appeared on GuruFocus.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Residential transactions increased 11% year-over-year to EUR106.1 million, with strong demand evidenced by the successful launch of One Floresca Sunset, which sold 73% of units within three months.
Cash contracted with customers reached a record EUR445 million, the highest level in company history, providing strong visibility into future cash inflows through 2029.
The rental portfolio remains robust, with 95% occupancy and an annualized NOI of EUR28.6 million, expected to rise to EUR40.5 million by year-end with the addition of fully leased assets.
Adjusted net asset value per share is EUR62, significantly above the current share price, and the adjusted loan-to-value ratio is a conservative 16.5%.
The company has a substantial pipeline and is disciplined in capital allocation, with plans to expand in the US using third-party equity to limit capital exposure.
The company is transparent about challenges and has updated its outlook, while emphasizing that most impacts are timing shifts rather than lost business.
Reported turnover declined 47% year-over-year to RON440 million, and net profit fell 68% to RON79 million, significantly below expectations.
Full-year net profit is expected to be 15-20% below the original budget due to delays from new residential legislation and a cyber attack on the national cadaster system.
The new residential legislation has created administrative bottlenecks, delaying revenue recognition and cash collections, with the company only able to sign reservations (5% down payments) for much of the period.
The company faced a trade-off between completing construction and performing unit subdivision, choosing to prioritize deliveries, which negatively impacted IFRS results.
The sale of One Tower has not been completed, as the company could not find a buyer at its target price, indicating potential asset liquidity challenges.
The company's G&A expenses increased 12% year-over-year (excluding non-cash stock option expenses), reflecting higher operational costs.
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