GTC Group has announced a consolidated net profit of €21.2 million for the second quarter of 2024, marking a significant turnaround from the €23.2 million loss reported during the same period last year. The company’s net profit from operations reached €33.5 million - a also a significant improvement compared to the €20.9 million loss recorded y-to-y.
The real estate investor and developer, which focuses on Poland and the capitals of Central and Eastern Europe, reported consolidated rental income of €35.3 million for the quarter, slightly up from €34.4 million a year earlier. However, revenues from property services dipped to €11.6 million from €12.5 million in the previous year.
CEO Gyula Nagy attributed the improved financial performance to several factors, including the indexation of rental rates and the completion of new office buildings, which bolstered rental income and operating margins. He also noted a stabilization in the occupancy rate in the Polish office market, a positive sign after two years of fluctuations. “We also successfully reduced our loan-to-value (LTV) ratio to 48.2% and increased our cash balance,” Nagy said in the company’s earnings release.
In Q2 2024, the company sold non-core assets in Budapest and invested in a senior rental housing project in Berlin, marking its entry into the residential sector in Western Europe. Nagy emphasized that GTC would continue exploring opportunities in this sector and geographic region in the coming quarters.
For the first half of 2024, GTC posted a consolidated net profit of €30.5 million, a notable recovery from the €12 million loss in the same period last year. Rental income for the first half of the year was €69.6 million, up from €65.5 million in H1 2023, while revenues from property services slightly decreased to €23 million from €24.1 million.
The company’s adjusted EBITDA for H1 2024 stood at €55 million, up from €52 million in the previous year. GTC attributed the increase in rental income to the completion of key projects like GTC X in Belgrade, Rose Hill Business Campus in Budapest, and Matrix C in Zagreb, along with rental rate hikes indexed to inflation.
The gross margin from operations increased to €65 million in the first half of 2024, driven by higher rental and service revenues, partially offset by rising service costs due to inflation. The revaluation of investment properties also contributed positively, with a gain of €1 million, compared to a €51 million loss in H1 2023. This gain was largely due to the increased value of the Lánchíd project in Budapest and ongoing construction projects.
GTC’s net finance costs rose to €18 million in H1 2024, up from €16 million in the previous year, with an average interest rate of 2.58%. Funds from operations (FFO I) for the first half of the year totaled €36 million, slightly higher than the €35 million recorded in H1 2023, translating to FFO I per share of €0.06.
As of June 30, 2024, GTC’s total investments, including financial fixed assets, amounted to €2.48 billion, up from €2.42 billion at the end of 2023. The company’s EPRA Net Tangible Assets (NTA) per share remained stable at €2.15, with EPRA NTA totaling €1.24 billion. Debt levels increased to €1.31 billion, mainly due to new secured financing and currency fluctuations, while the net LTV ratio improved to 48.2%.
GTC’s cash balance also saw a significant boost, rising to €89 million at the end of June 2024, up from €60 million at the close of 2023. The cash balance in escrow accounts was €31 million.
