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GTC - Globe Trade Centre S.A.
Quarterly Report • Nov 26, 2024
5627_rns_2024-11-26_198ee19e-832f-4f9a-8f09-b1d3693e8323.pdf
Quarterly Report
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CONSOLIDATED INTERIM REPORT
OF GLOBE TRADE CENTRE S.A. CAPITAL GROUP FOR THE THREE AND NINE-MONTH PERIODS ENDED
30 SEPTEMBER 2024
Place and date of publication: Warsaw, 26 November 2024
LIST OF CONTENTS:
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- Management Board's report on the activities of Globe Trade Centre S.A. Capital Group in the three and nine-month periods ended 30 September 2024
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- Unaudited interim condensed consolidated financial statements for the three and nine-month periods ended 30 September 2024
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- Independent auditor's review report
MANAGEMENT BOARD'S REPORT
ON THE ACTIVITIES OF GLOBE TRADE CENTRE S.A. CAPITAL GROUP
IN THE THREE AND NINE-MONTH PERIODS ENDED 30 SEPTEMBER 2024
All the financial data in this Report is presented in euro or PLN and expressed in million unless indicated otherwise
TABLE OF CONTENT
| 1. Presentation of the Group 5 |
|---|
| 1.1 General information about the Group 5 |
| 1.2 Main events in the period 7 |
| 1.3 Structure of the Group 9 |
| 1.4 Changes to the principal rules of the management of the Company and the Group 10 |
| 2. Selected financial data 10 |
| 3. Operating and financial review 12 |
| 3.1 General factors affecting operating and financial results 12 |
| 3.2 Specific factors affecting financial and operating results 13 |
| 3.3 Presentation of differences between achieved financial results and published forecasts 13 |
| 3.4 Consolidated statement of financial position 13 |
| 3.5 Consolidated income statement 15 |
| 3.5.1 Consolidated income statement for nine-month period ended 30 September 2024 with the result |
| for the corresponding period of 2023 15 |
| 3.5.2 Consolidated income statement for three-month period ended 30 September 2024 with the |
| result for the corresponding period of 2023 16 |
| 3.6 Consolidated cash flow statement 17 |
| 3.7 Future liquidity and capital resources 17 |
| 4. Information on loans granted with a particular emphasis on related entities 18 |
| 5. Information on granted and received guarantees with a particular emphasis on guarantees granted |
| to related entities 19 |
| 6. Shareholders who, directly or indirectly, have substantial shareholding 19 |
| 7. Shares in GTC held by members of the management board and the supervisory board 20 |
| 8. Transactions with related parties concluded on terms other than market terms 20 |
| 9. Proceedings before a court or public authority involving Globe Trade Centre SA or its subsidiaries |
| with total value of the liabilities or claims being material 21 |
| 10. Terms and abbreviations 21 |
PRESENTATION OF FINANCIAL INFORMATION
Unless indicated otherwise, the financial information presented in this Report was prepared according to International Financial Reporting Standards ("IFRS") as approved for use in the European Union.
All the financial data in this Report is presented in EUR or PLN and expressed in millions unless indicated otherwise.
Certain financial information in this Report was adjusted by rounding. As a result, certain numerical figures shown as totals in this Report may not be exact arithmetic aggregations of the figures that precede them.
FORWARD-LOOKING STATEMENTS
This Report contains forward-looking statements relating to future expectations regarding the Group's business, financial condition, and results of operations. You can find these statements by looking for words such as "may", "will", "expect", "anticipate", "believe", "estimate", and similar words used in this Report. By their nature, forward-looking statements are subject to numerous assumptions, risks, and uncertainties. Accordingly, actual results may differ materially from those expressed or implied by forward-looking statements. The Group cautions you not to place undue reliance on such statements, which speak only as of this Report's date.
The cautionary statements set out above should be considered in connection with any subsequent written or oral forward-looking statements that the Group or persons acting on its behalf may issue. The Group does not undertake any obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this Report.
The Group discloses essential risk factors that could cause its actual results to differ materially from its expectations under Item 3. Operating and financial review as well as elsewhere in this Report and under Item 11. Key risk factors in consolidated interim report for the three and six-month periods ended 30 June 2024. These cautionary statements qualify all forward-looking statements attributable to us or the persons acting on behalf of the Group. When the Group indicates that an event, condition, or circumstance could or would have an adverse effect on the Group, it means to include effects upon its business, financial situation, and results of operations.
1. Presentation of the Group
1.1 General information about the Group
GTC Group is an experienced, established, and fully integrated real estate group of companies operating in the CEE and SEE region with a primary focus on Poland and Budapest and capital cities in the SEE region, including Bucharest, Belgrade, Zagreb, and Sofia, where it directly acquires, develops and manages primarily high-quality office and retail real estate assets in prime locations. The Company is listed on the Warsaw Stock Exchange and the Johannesburg Stock Exchange. The Group operates an asset management platform and is represented by local teams in each of its core markets.
As of 30 September 2024, the book value of the Group's total property portfolio including non-current financial assets was €2,545.0.
As of 30 September 2024, the book value of the Group's property portfolio was €2,398.2. The breakdown of the Group's property portfolio was as follows:
- 46 completed commercial buildings, including 40 office buildings and 6 retail properties with a total combined commercial space of approximately 755 thousand sqm of GLA, an occupancy rate at 87% and a book value of €2,015.0 (including 1 office held for sale in the amount of €27.3) which accounts for 84% of the Group's total property portfolio;
- four projects under construction with a total GLA of approximately 55 thousand sqm and a book value of €122.8, which accounts for 5% of the Group's total property portfolio;
- investment landbank intended for future development (including 1 land plot in Poland held for sale in the amount of €3.5) with the book value of €167.5 which accounts for 7% of the Group's total property portfolio;
- residential landbank with book value of €28.4, which accounts for 1% of the Group's total property portfolio; and
- right of use of land under perpetual usufruct, including assets held for sale with value of €64.5 (including €1 from residential landbank) which accounts for 3% of the Group's total property portfolio.
Additionally, GTC holds non-current financial assets in the amount of €146.8 mainly including:
- 25% of notes issued to finance Kildare Innovation Campus (technology campus) project, which currently comprises nine completed buildings with the total GLA of approximately 102 thousand sqm (the project extends over 72 ha of which 34 ha are undeveloped). Fair value of these notes as of 30 September 2024 amounted to €119.4, which accounts for 5% of the Group's total property portfolio including non-current financial assets;
- 34% of units in Regional Multi Asset Fund Compartment 2 of Trigal Alternative Investment Fund GP S.á.r.l., which holds 4 completed commercial buildings including 3 office buildings and 1 retail property with a total combined commercial space of approximately 41 thousand sqm of GLA. The fair value of these units amounted to €15.6, which accounts for 1% of the Group's total property portfolio including non-current financial assets;
- 15% shares in the Hungarian public company NAP Nyrt a producer of solar panel energy with a total capacity of 42.6 MW (AC). The fair value of these shares amounted to €4.9, which accounts for less than 1% of the Group's total property portfolio including non-current financial assets.
1.2 Main events in the period
FINANCING
In February 2024, Dorado 1 EOOD, a wholly-owned subsidiary of the Company, has signed €55.0 loan agreement with DSK Bank AD and OTP Bank PLC with a maturity in March 2029. The full amount was drawn down.
In December 2023, the Company transferred €29.5 to an escrow account held with an external legal company with the purpose of acquiring green bonds issued by GTC Aurora (further "Aurora bonds"). Running the acquisition transactions was handed over to a financial expert (further the "Broker"). In the nine-month period ended 30 September 2024 the Broker bought back 5,500 Aurora bonds and transferred to GTC Group with nominal value of €5.5 at cost of €4.9. GTC Group recognized income from buy-back of Aurora bonds in the amount of €0.6. The broker acquired also bonds with ISIN HU0000362207 in the value of €3.9 that were transferred to GTC Group.
In addition, GTC Group decided to lower the amount on the escrow held for buy-back, €14.2 (EUR 12.2 in first quarter of 2024 and EUR 2 in third quarter of 2024) in cash was returned to GTC including the interest income accumulated. For the remaining amount of €7, GTC Group and the Broker signed an amendment to extend the current agreement until 16 December 2024.
On 25 June 2024, Globis Poznań Sp. z o.o., a wholly-owned subsidiary of the Company, signed the annex with Santander Bank Polska S.A., which extended repayment date from 30 June to 31 August 2024. The loan was repaid on the maturity date.
On 14 August 2024, GTC Aeropark sp. z o.o. and Artico sp. z o.o., wholly-owned subsidiaries of the Company, have signed €31.6 loan agreement with Santander Bank Polska S.A. with a 5-year maturity after utilisation date. The full amount was drawn down.
TRANSACTIONS
On 21 June 2024, GTC Elibre GmbH, acquired an investment property under construction (senior housing for rent) in Berlin area from a related party, not associated with the majority shareholder, for the total consideration of €32.0 (including taxes and transaction costs). The first instalment of €12.0 was paid as a part of forward funding transaction and legal title was transferred as of 25 June 2024. Remaining part should be settled in cash received from future external financing that is yet to be obtained. Elibre project will provide 50 residential units with the total living space of 4,014 sqm. Transaction is accounted for as asset deal.
In the nine-month period ended 30 September 2024, GTC Origine Investments Pltd., a wholly-owned subsidiary of the Company, acquired shares in the Hungarian public company - NAP Nyrt for the total consideration of €4.9 (further details in note 15 to the condensed consolidated interim financial statements for the three and nine-month periods ended 30 September 2024).
On 4 July 2024, the disposal of GTC LCHD Projekt Kft, a wholly-owned subsidiary of GTC Origine Investments Pltd. was completed in accordance with the sale-and-purchase agreement.
In August 2024, GTC KLZ 7-10 Kft. signed a general agreement for the development of a residential for sale project in the city centre of Budapest. Contracted cost of development is €16.4. Planned completion is November 2027. Project will provide 120 residential units with the total living space of 5,500 sqm.
On 18 September 2024, the Management Board of the Company adopted resolution regarding the disposal of GTC Seven Gardens d.o.o., a wholly-owned subsidiary of the Company. GTC Seven Gardens d.o.o. portfolio consists of the office building in Zagreb - Matrix C. The sale price shall be €13 (equal to the net proceeds from the transaction). GTC Seven Gardens d.o.o will be sold together with its bank loan obligation (€14). The closing of the transaction is expected to take place before the end of Q4 2024.
OTHER
On 26 June 2024, the Company's shareholders adopted a resolution regarding the distribution of a dividend in the amount of €29.3 (PLN 126.3). The dividend was paid in September 2024.
EVENTS AFTER 30 SEPTEMBER 2024:
On 23 October 2024, GTC Group signed a sale and purchase agreement concerning the sale of Glamp d.o.o., an owner of A-class office building in Belgrade – GTC X for €52.2. Net proceeds from sale of subsidiary shall be €24.2. Difference between the sale price and net proceeds is mainly due to the fact that part of the price will be used for bank loan repayment before the sale. The closing of the transaction is expected to take place by the end of Q4 2024.
On 15 November 2024 the Company entered into a series of share purchase agreements with, inter alia, Peach Property Group AG and LFH Portfolio Acquico S.À R.L., as the sellers, leading to the acquisition of the portfolio of residential assets in Germany (the "Portfolio") currently held by Peach Property Group AG (the "Transaction"). The closing of the Transaction is conditional upon the fulfilment of a number of conditions precedent specified in the Transaction documentation.
The envisaged Transaction assumes that the Company will indirectly acquire:
(i) from Peach Property Group AG 89.9% of the limited liability partnerships: Kaiserslautern I GmbH & Co. KG (or its legal successor) and Kaiserslautern II GmbH & Co. KG (or its legal successor) (the "Portfolio Partnerships"), and
(ii) from LFH Portfolio Acquico S.À R.L., and from ZNL Investment S.À R.L., as a result of a series of transactions, up to 89.9% of the limited liability companies: Portfolio Kaiserslautern III GmbH, Portfolio KL Betzenberg IV GmbH, Portfolio KL Betzenberg V GmbH, Portfolio Kaiserslautern VI GmbH, Portfolio Heidenheim I GmbH, Portfolio Kaiserslautern VII GmbH and Portfolio Helmstedt GmbH (the "Portfolio Companies")
at an adjusted property value of approximately €448 based on 100% ownership of the Portfolio.
As the first tranche, the Company, indirectly through its subsidiary, GTC Paula S.À R.L., will acquire 89.9% of the shares in the Portfolio Partnerships and 79.8% of the shares in the Portfolio Companies for a total consideration comprising €167 in cash and the Participating Notes with a total nominal value of approximately €42, subject to adjustments. Participating notes are planned to be issued by the Company under the Polish Act on Bonds. The Participating Notes will be offered or transferred to LFH Portfolio Acquico S.À R.L. The Participating Notes will be unsecured, subordinated to all other liabilities due to the creditors of GTC and will have a final effective maturity beyond that of all of GTC's debt (i.e. 2044).
Peach Property Group AG will retain a 10.1% stake in the Portfolio Partnerships and the Portfolio Companies, while co-investors, ZNL Investment S.À R.L. and LFH Portfolio Acquico S.À R.L., will retain remaining specified shares. The Company will also be granted an option to purchase additional 10.1% of the Portfolio Companies at an option price determined in accordance with the formula applicable for the calculation of the consideration amount (as adjusted), provided that no reinvestments will be made. Consequently, the Company will acquire 89.9% of the Portfolio Partnerships and up to 89.9% of the Portfolio Companies.
Transaction costs incurred as of the date of the financial statements are not significant. The total value of costs associated with the acquisition will be disclosed in the annual financial statements as the Transaction has now been signed and further expenses may still arise.
The accounting treatment for the Transaction is being finalized, therefore the preliminary assessment if this is an asset acquisition or a business combination cannot be disclosed in this condensed financial statements.
Transaction described above was not concluded with any related party.
For the detailed description of the transaction please refer to the current report no. 21/2024 from 16 November 2024.
1.3 Structure of the Group
The Group structure is consistent with presented in the Group's annual consolidated financial statements for the year ended 31 December 2023 (see note 8 to the consolidated financial statements for 2023) except for the following change occurred in the nine-month period ended 30 September 2024:
- liquidation of Riverside Apartmanok Kft. (wholly-owned subsidiary of GTC Hungary seated in Hungary),
- acquisition of Clara Liffey GP S.á r.l. (wholly-owned subsidiary of GTC Liffey Kft. seated in Hungary),
- establishment of GTC Germany GmbH (wholly-owned subsidiary of GTC Origine Investments Pltd. seated in Hungary),
- establishment of GTC Kapitalbeteiligung GmbH (wholly-owned subsidiary of GTC Germany GmbH seated in Germany),
- establishment of GTC Elibre GmbH & Co. KG (wholly-owned subsidiary of GTC Germany GmbH seated in Germany),
- establishment of GTC Trinity d.o.o. (wholly-owned subsidiary of GTC S.A. seated in Poland),
- sale of GTC LCHD Projekt Kft. (wholly-owned subsidiary of GTC Origine Investments Pltd. seated in Hungary),
- establishment of GTC Holding S.á r.l. (wholly-owned subsidiary of GTC S.A. seated in Poland),
- ● establishment of GTC Paula S.á r.l. (wholly-owned subsidiary of GTC Holding S.á r.l. seated in Luxembourg).
1.4 Changes to the principal rules of the management of the Company and the Group
There were no changes to the principal rules of management of the Company and the Group.
CHANGES IN THE COMPOSITION OF THE MANAGEMENT BOARD:
- on 18 March 2024, Mrs. Barbara Sikora resigned from her seat on the management board of GTC S.A.;
- on 23 April 2024, Mr. Balázs Gosztonyi was appointed as a member of the management board of GTC S.A., effective as of 24 April 2024;
- on 30 August 2024, Mr. György Stofa was appointed as a member of management board of GTC S.A., effective as of 1 September 2024.
CHANGES IN THE COMPOSITION OF THE SUPERVISORY BOARD:
- on 13 March 2024, Aletheia Investment AG appointed Mr. Leonz Meyer to the Supervisory Board of the Company;
- on 15 March 2024, GTC Dutch Holdings B.V. revoked Mr. Balázs Figura and Mr. Mariusz Grendowicz from the positions of member of the Supervisory Board of GTC S.A;
- on 15 March 2024, GTC Dutch Holdings B.V. appointed Mr. Tamás Sándor and Mr. Csaba Cservenák as members of the Supervisory Board of the Company;
- on 17 June 2024, the mandate of Dr. Leonz Meyer's as the Supervisory Board member of the Company expired following a decrease below 5% in the GTC share capital by Aletheia Investment AG;
- on 25 September 2024, Mr. Sławomir Niemierka resigned from his seat on the supervisory board of the Company, effective as of 25 September 2024;
- on 25 September 2024, Otwarty Fundusz Emerytalny PZU "Złota Jesień" appointed Mrs. Magdalena Frąckowiak to the Supervisory Board of the Company.
2. Selected financial data
The following tables present the Group's selected historical financial data for the nine and three-month periods ended 30 September 2024 and 30 September 2023. The historical financial data should be read in conjunction with Item 3. Operating and financial review of this Report and the consolidated financial statements for the three and nine-month periods ended 30 September 2024 (including the notes thereto).
Selected financial data presented in PLN is derived from the consolidated interim financial statements for the three and nine-month periods ended 30 September 2024 presented in accordance with IFRS and prepared in the Polish language and Polish zloty as a presentation currency. The financial statements of the Group's companies prepared in their functional currencies are included in the consolidated financial statements by a translation into EUR or PLN using appropriate exchange rates outlined in IAS 21 The Effects of Changes in Foreign Exchange Rates.
The reader is advised not to view such conversions as a representation that such zloty amounts actually represent such euro amounts or could be or could have been converted into euro at the rates indicated or at any other rate.
| For the nine-month period ended 30 September |
For the three-month period ended 30 September |
||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | ||||||
| (in million) | € | PLN | € | PLN | € | PLN | € | PLN | |
| Consolidated Income Statement | |||||||||
| Revenues from operations | 139.4 | 600.3 | 135.3 | 620.4 | 46.8 | 200.5 | 45.8 | 204.1 | |
| Cost of operations | (42.4) | (182.6) | (40.1) | (183.9) | (14.8) | (63.4) | (13.2) | (59.4) | |
| Gross margin from operations |
97.0 | 417.7 | 95.2 | 436.5 | 32.0 | 137.1 | 32.6 | 144.7 | |
| Selling expenses | (1.5) | (6.5) | (1.8) | (8.3) | (0.4) | (1.8) | (0.6) | (2.2) | |
| Administration expenses | (12.3) | (53.0) | (14.9) | (68.3) | (3.2) | (13.7) | (6.2) | (27.0) | |
| Profit/(loss) from revaluation | (6.3) | (27.1) | (57.1) | (262.3) | (7.0) | (30.1) | (5.8) | (24.8) | |
| Finance cost, net | (27.2) | (117.2) | (24.7) | (113.2) | (9.3) | (39.9) | (8.7) | (38.2) | |
| Result for the period | 41.4 | 178.2 | (6.0) | (28.3) | 9.9 | 42.2 | 5.6 | 29.2 | |
| Basic and diluted earnings per share (not in million) |
0.07 | 0.30 | (0.01) | (0.06) | 0.02 | 0.07 | 0.01 | 0.04 | |
| Weighted average number of issued ordinary shares (not in million) |
574,255,122 | 574,255,122 | 574,255,122 | 574,255,122 | 574,255,122 | 574,255,122 | 574,255,122 | 574,255,122 |
| For the nine-month period ended 30 September | ||||
|---|---|---|---|---|
| 2024 | 2023 | |||
| (in million) | € | PLN | € | PLN |
| Consolidated Cash Flow Statement | ||||
| Net cash from operating activities | 75.9 | 326.9 | 71.4 | 327.3 |
| Net cash from used in investing activities | (55.5) | (238.9) | (41.9) | (192.1) |
| Net cash from used in financing activities | (32.2) | (137.5) | (52.4) | (240.4) |
| Cash and cash equivalents at the end of the period | 49.3 | 211.0 | 91.2 | 422.8 |
| As at | ||||
|---|---|---|---|---|
| 30 September 2024 | 31 December 2023 | |||
| (in million) | € | PLN | € | PLN |
| Consolidated statement of financial position | ||||
| Investment property (completed and under construction) |
2,110.5 | 9,031.0 | 2,074.9 | 9,021.6 |
| Investment property landbank | 164.0 | 701.8 | 158.5 | 689.2 |
| Right of use (investment property) | 63.5 | 271.7 | 40.0 | 173.9 |
| Residential landbank | 29.4 | 125.8 | 27.2 | 118.3 |
| Assets held for sale | 32.6 | 139.5 | 13.6 | 59.1 |
| Cash and cash equivalents | 48.4 | 207.1 | 60.4 | 262.6 |
| Non-current financial assets measured at fair value through profit or loss |
146.8 | 628.2 | 135.1 | 587.4 |
| Others | 127.4 | 545.1 | 146.9 | 638.7 |
| Total assets | 2,722.6 | 11,650.2 | 2,656.6 | 11,550.8 |
| Non-current liabilities | 1,419.0 | 6.072.0 | 1,444.0 | 6.278.5 |
| Current liabilities | 173.7 | 743.2 | 86.4 | 375.6 |
| Total equity | 1,129.9 | 4,835.0 | 1,126.2 | 4,896.7 |
| Share capital | 12.9 | 57.4 | 12.9 | 57.4 |
3. Operating and financial review
3.1 General factors affecting operating and financial results
GENERAL FACTORS AFFECTING OPERATING AND FINANCIAL RESULTS
Management board believes that the following factors and important market trends have significantly affected the Group's results of operations since the end of the period covered by the latest published audited financial statements, and the Group expects that such factors and trends will continue to have a significant impact on the Group's results from operations in the future.
The key factors affecting the Group's financial and operating results are pointed below:
- the economic slowdown in CEE and SEE which may slow down the general economy in the countries where the Group operates;
- availability and cost of financing;
- impact of the supply and demand on the real estate market in CEE and SEE region;
- impact of inflation (according to Eurostat, the euro area annual inflation was 1.7% in September 2024);
- impact of interest rate movements (however, as of 30 September 2024, 92% of the Group's borrowings were either based on fixed interest rate or hedged against interest rate fluctuations, mainly through interest rate swaps and cap transactions);
- impact of foreign exchange rate movements (the vast majority of the Group's lease agreements are concluded in euro and include a clause that provides for the full indexation of the rent linked
to the European Index of Consumer Prices, bonds issued in other currencies than euro were hedged against foreign exchange rate movements using cross currency SWAPs).
3.2 Specific factors affecting financial and operating results
REPAYMENT OF BONDS, BANK LOAN REFINANCING AND OTHER CHANGES TO BANK LOAN AGREEMENTS
During the nine-month period ended 30 September 2024:
- the Group signed a €55.0 loan agreement with DSK Bank AD and OTP Bank PLC (Mall of Sofia and Sofia Towers). The full amount was drawn down.
- the broker bought back 5,500 Aurora bonds and transferred then to GTC Group. Group recognized income in the amount of €0.6.
- the broker acquired also bonds with ISIN HU0000362207 in the value of €3.9 that were transferred to GTC
- in addition €14.2 in cash was returned to GTC including the interest income accumulated. For the remaining amount of €7, GTC Group and the Broker signed an amendment to extend the current agreement until 16 December 2024.
- the Group signed the €31.6 loan agreement with Santander Bank Polska S.A. with a 5-year maturity after utilisation date. The full amount was drawn down.
TRANSACTIONS
During the nine-month period ended 30 September 2024 the Group :
- acquired investment property under construction (senior housing for rent) in Berlin for the total consideration of €32.0 (including taxes and transaction costs). The first instalment of €12.0 was paid as a part of forward funding transaction and legal title was transferred as of 25 June 2024. Remaining part should be settled in cash received from future external financing that is yet to be obtained.
- acquired shares in the Hungarian public company NAP Nyrt for the total consideration of €4.9.
- finalized sale of GTC LCHD Projekt in July 2024. Transaction was completed with closing price in the value of €13.2, out of which €11.4 has already been collected.
OTHER
In September 2024, €29.3 (PLN 126.3) dividend was paid.
3.3 Presentation of differences between achieved financial results and published forecasts
The Group did not publish forecasts for the first nine months of 2024 or for the full year 2024.
3.4 Consolidated statement of financial position
ASSETS
Total assets increased by €66.0 (2%) to €2,722.6 as of 30 September 2024 from €2,656.6 as of 31 December 2023.
The value of investment property increased by €64.6 (3%) to €2,338.0 as of 30 September 2024 from €2,273.4 as of 31 December 2023, mainly due to investments of €63.2 in development of assets under construction (€36.3) and capex and fit-out in completed properties (€24.9), recognized increase in the right-of-use (and corresponding increase in lease liabilities) due to new annual perpetual usufruct fee of €23.5 and purchase of investment property under construction (Elibre) of €13.8, partially offset by reclassification of Matrix C to assets held for sale of €27.3.
The value of assets held for sale increased by €19.0 (140%) to €32.6 as of 30 September 2024 from €13.6 as of 31 December 2023, mainly due to reclassification Matrix C to assets held for sale.
The value of non-current financial assets increased by €11.7 (9%) to €146.8 as of 30 September 2024 from €135.1 as of 31 December 2023, mainly due to acquisition of shares in the Hungarian public company - NAP Nyrt for the total consideration of €4.9 and acquisition of bonds for €3.9.
The value of derivatives decreased by €9.2 (65%) to €5.0 as of 30 September 2024 from €14.2 as of 31 December 2023, mainly due to utilization of derivatives due to repayment of interest in the period.
The value of prepayments and other receivables decreased by €20.7 (40%) to €31.7 as of 30 September 2024 from €52.4 as of 31 December 2023, mainly as a result of decrease in escrow account held for the purpose of acquiring green bonds issued by GTC Aurora.
The value of cash and cash equivalents decreased by €12.0 (20%) to €48.4 as of 30 September 2024 from €60.4 as of 31 December 2023. The cash balance was decreased mostly due to expenditures on investment properties of €62.5, repayment of long-term borrowings of €51.5, dividend payment in the amount of €29.6, interest paid in the amount of €28.8 and purchase of investment property under construction of €12.0 partially offset by acquisition of new long-term secured loan of €87.6, net cash proceeds from operating activities of €75.9 and change in short-term deposits designated for bonds buy back of €14.2.
LIABILITIES
The value of loans and bonds increased by €9.0 (1%) to €1,283.0 as of 30 September 2024 as compared to €1,274.0 as of 31 December 2023, mainly due to proceeds from long-term borrowings in the amount of €87.6 compensated by repayments during the period in the amount of €51.5, reclassification of €14.0 to liabilities related to assets held for sale and foreign exchange differences on bonds denominated in HUF of €5.8. The current portion of long-term debt increased due to reclassification of loan related to Galeria Jurajska due to upcoming maturity in Q1 2025.
The value of liabilities related to assets held for sale bonds increased by €15.1 to €15.5 as of 30 September 2024 as compared to €0.4 as of 31 December 2023, mainly due to reclassification of Matrx C to assets held for sale.
The value of derivatives increased by €7.4 (40%) to €26.1 as of 30 September 2024 from €18.7 as of 31 December 2023, mainly due to change in fair value of cross-currency interest rate swaps on the Hungarian bonds.
The value of lease liabilities increased by €23.5 (54%) to €66.7 as of 30 September 2024 from €43.2 as of 31 December 2023, mainly due to new annual perpetual usufruct fees of €23.5.
EQUITY
The value of equity increased by €3.7 to €1,129.9 as of 30 September 2024 from €1,126.2 as of 31 December 2023 mainly due to recognition of €8.4 decrease in the value of hedge reserve partially offset by €10.6 increase in accumulated profit and €1.5 increase in non-controlling interest.
3.5 Consolidated income statement
3.5.1 Consolidated income statement for nine-month period ended 30 September 2024 with the result for the corresponding period of 2023
REVENUES FROM RENTAL ACTIVITY
Rental and service revenues increased by €4.1 (3%) to €139.4 in the nine-month period ended 30 September 2024, compared to €135.3 in the nine-month period ended 30 September 2023. The Group recognized an increase in rental revenues of €3.1 following the completion of GTC X in Belgrade, Rose Hill Business Campus in Budapest and Matrix C in Zagreb combined with an increase in an average rental rate following the indexation of rental rates to the European CPI.
COST OF RENTAL ACTIVITY
Service costs increased by €2.3 (6%) to €42.4 in the nine-month period ended 30 September 2024, as compared to €40.1 in the nine-month period ended 30 September 2023. The Group recognized an increase in service costs following the completion of GTC X, Rose Hill Business Campus and Matrix C of €0.5 and an increase in operating costs of €1.9 coming from inflation. The increase was partially offset by a decrease in the service costs due to the sale of Forest Offices Debrecen in the first quarter of 2023 of €0.1.
GROSS MARGIN FROM OPERATIONS
Gross margin (profit) from operations increased by €1.8 (2%) to €97.0 in the nine-month period ended 30 September 2024, as compared to €95.2 in the nine-month period ended 30 September 2023, mainly due to an increase in rental and service revenues partially offset by an increase in the service charge cost due to inflation.
The gross margin on rental activities remained unchanged at 70% in both periods nine-month ended 30 September 2024 and 2023.
ADMINISTRATION EXPENSES
Administration expenses decreased by €2.6 (17%) to €12.3 in the nine-month period ended 30 September 2024, from €14.9 in the nine-month period ended 30 September 2023, mainly due to decrease in share based payment and remuneration and fees.
PROFIT/(LOSS) FROM THE REVALUATION
Net loss from the revaluation of the assets amounted to €6.3 in the nine-month period ended 30 September 2024, compared to a net loss of €57.1 in the nine-month period ended 30 September 2023. Net loss from the revaluation was mainly due to a decrease in the value of completed office portfolio in Poland as a result of a decrease in occupancy rate compared to 2023, however it started recovering in Q3 2024 and capitalized expenses, mainly on completed properties, partially offset by an increase in the value of assets under construction by €5.2.
FINANCE COST, NET
Finance cost, net increased by €2.5 (10%) to €27.2 in the nine-month period ended 30 September 2024 as compared to €24.7 in the nine-month period ended 30 September 2023. The increase was mainly due to a new loan for Mall of Sofia in amount of €55.0 and an increase in the weighted average interest rate (including hedges) to 2.89% as of 30 September 2024 from 2.43% as of 30 September 2023.
RESULT BEFORE TAX
Profit before tax amounted to €48.5 in the nine-month period ended 30 September 2024, compared to a loss before tax of €3.6 in the nine-month period ended 30 September 2023. Net profit in the ninemonth period ended 30 September 2024 includes a profit from operations in the amount of €97.0 and loss from revaluation in the amount of €6.3 compared to loss revaluation in the amount of €57.1 in the nine-month period ended 30 September 2023.
TAXATION
Tax amounted to €7.1 for the nine-month period ended 30 September 2024, compared to €2.4 tax income in the nine-month period ended 30 September 2023. The tax included current tax expense amounting to €5.3 and deferred tax amounting to €1.8.
NET RESULT
Net profit was €41.4 in the nine-month period ended 30 September 2024, compared to a net loss of €6.0 in the nine-month period ended 30 September 2023. The difference comes mainly from the difference in the result on revaluation.
3.5.2 Consolidated income statement for three-month period ended 30 September 2024 with the result for the corresponding period of 2023
REVENUES FROM RENTAL ACTIVITY
Rental and service revenues increased by €1.0 (2%) to €46.8 in the three-month period ended 30 September 2024, compared to €45.8 in the three-month period ended 30 September 2023, following the completion of GTC X in Belgrade, Rose Hill Business Campus in Budapest and Matrix C in Zagreb combined with an increase in an average rental rate following the indexation of rental rates to the European CPI.
COST OF RENTAL ACTIVITY
Service costs increased by €1.6 (12%) to €14.8 in the three-month period ended 30 September 2024, as compared to €13.2 in the three-month period ended 30 September 2023. The Group recognized an increase in service costs following an increase in operating costs coming mainly from inflation.
GROSS MARGIN FROM OPERATIONS
Gross margin (profit) from operations decreased by €0.6 (2%) to €32.0 in the three-month period ended 30 September 2024, as compared to €32.6 in the three-month period ended 30 September 2023, mainly due to an increase in the service charge cost due to inflation.
The gross margin on rental activities in the three-month period ended 30 September 2024 was 68% compared to 71% in the three-month period ended 30 September 2023.
ADMINISTRATION EXPENSES
Administration expenses decreased by €3.0 (48%) to €3.2 in the three-month period ended 30 September 2024, from €6.2 in the three-month period ended 30 September 2023 mainly due to decrease in remuneration fees.
PROFIT/(LOSS) FROM THE REVALUATION
Net loss from the revaluation of the assets amounted to €7.0 in the three-month period ended 30 September 2024, compared to a net loss of €5.8 in the three-month period ended 30 September
- Loss in the three-month period ended 30 September 2024, is mainly a result of capitalized expenditures on completed properties.
FINANCE COST, NET
Finance cost, net increased by €0.6 (7%) to €9.3 in the three-month period ended 30 September 2024 as compared to €8.7 in the three-month period ended 30 September 2023. The increase was mainly due to an increase in the weighted average interest rate (including hedges) to 2.89% as of 30 September 2024 from 2.43% as of 30 September 2023.
RESULT BEFORE TAX
Profit before tax amounted to €11.9 in the three-month period ended 30 September 2024, compared to a profit before tax of €10.4 in the three-month period ended 30 September 2023. Net profit in the threemonth period ended 30 September 2024 includes a profit from operations in the amount of €32.0.
TAXATION
Tax amounted to €2.0 for the three-month period ended 30 September 2024, compared to €4.8 in the three-month period ended 30 September 2023. The tax included current tax expense amounting to €1.9 and deferred tax amounting to €0.1.
NET PROFIT (LOSS)
Net profit was €9.9 in the three-month period ended 30 September 2024, compared to a net profit of €5.6 in the three-month period ended 30 September 2023. The difference comes mainly from the difference in the administration expenses, the result on revaluation and tax.
3.6 Consolidated cash flow statement
Net cash flow from operating activities was €75.9 in the nine-month period ended 30 September 2024 as compared to €71.4 in the nine-month period ended 30 September 2023. An increase of €4.5 was mainly due to an increase in gross margin form operation by €1.8 combined with a decrease in working capital changes by €1.9 and lower tax paid by €0.5.
Net cash flow used in investing activities amounted to €55.5 in the nine-month period ended 30 September 2024 compared to €41.9 cash flow used in investing activities in the nine-month period ended 30 September 2023. Cash flow used in investing activities is mainly composed of expenditure on investment properties of €62.5 and purchase of investment property of €12.0 compensated by an increase in the deposits designed for bonds buy-back of €14.2.
Net cash flow used in financing activities amounted to €32.2 in the nine-month period ended 30 September 2024, compared to €52.4 of cash flow used in financing activities in the nine-month period ended 30 September 2023. Cash flow from financing activities is mainly composed of proceeds from long-term borrowings of €87.6 repayment of long-term borrowings of €51.5, dividend payment in the amount of €29.6 and interest paid in the amount of €28.8.
Cash and cash equivalents as of 30 September 2024 amounted to €49.3 compared to €91.2 as of 30 September 2023.
3.7 Future liquidity and capital resources
As of 30 September 2024, the Group believes that its cash balances, cash generated from disposal of properties, cash generated from renting out of its investment properties, and cash available under its existing and future loan facilities will be sufficient to fund its needs.
The Group manages its liabilities efficiently and is constantly reviewing its funding plans related to (i) developments and acquisitions of new properties, (ii) debt acquisitions and service of its existing assets portfolio, and (iii) CAPEX in its existing properties. Any cash needs are covered from operating income, new debt acquisitions and sale of operating assets or landbank.
As of 30 September 2024, the Group's non-current liabilities amounted to €1,419.0 compared to €1,444.0 as of 31 December 2023.
The Group's total debt from long and short-term loans and borrowings as of 30 September 2024, amounted to €1,297.0 ( includes €14.0 related to assets held for sale), as compared to €1,274.0 as of 31 December 2023.
The Group's net loan-to-value ratio amounted to 48.8% as of 30 September 2024 as compared to 49.3% as of 31 December 2023 mainly due to an increase in investment property following the capital expenditures on investment property under construction and acquisition of new assets.
As of 30 September 2024, 92% of the Group's loans and bonds (by value) were based on the fixed interest rate or hedged against interest fluctuations, mainly through interest rate swaps and cap transactions.
The interest cover as of 30 September 2024 was 3.71.
AVAILABILITY OF FINANCING
The Management has analyzed the Groups cash flow projections based on certain hypothetical defensive assumptions to assess the reasonableness of the going concern assumption given the current developments on the market.
The Management has analysed the timing, nature and scale of potential financing needs of particular subsidiaries and believes that there are no risks for paying current financial liabilities and cash on hand, as well as, expected operating cash-flows will be sufficient to fund the Group's anticipated cash requirements for working capital purposes, for at least the next twelve months from the date of the financial statements. Consequently, the consolidated financial statements have been prepared under the assumption that the Group companies will continue as a going concern in the foreseeable future, for at least twelve months from the date of the financial statements.
The Group's principal financial liabilities comprise bank and shareholders' loans, bonds, hedging instruments, trade payables, and other long-term financial liabilities. The main purpose of these financial instruments is to finance the Group's operations. The Group has various financial assets such as trade receivables, loans granted, derivatives, cash and short-term deposits.
The main risks connected with the Group's financial instruments are interest risk, liquidity risk, foreign currency risk and credit risk.
Detailed description of financial instruments and risk management is presented under Note 34 to the consolidated financial statements for the year 2023.
4.Information on loans granted with a particular emphasis on related entities
As of 30 September 2024, the Group did not have any long-term loans granted to its associates or joint ventures.
5. Information on granted and received guarantees with a particular emphasis on guarantees granted to related entities
In the nine and three-month periods ended 30 September 2024, the Group did not grant any material guarantees. As of 30 September 2024, and 31 December 2023 there were no guarantees given to third parties.
Additionally, the typical warranties are given in connection with the sale of assets, to guarantee construction completion and to secure construction loans (cost-overruns guarantee). The risk involved in the above warranties and guarantees is very low.
6. Shareholders who, directly or indirectly, have substantial shareholding
The following table presents the Company's shareholders, who had no less than 5% of votes at the general meeting of GTC S.A. shareholders, as of the date of 30 September 2024 and the date of the report.
As of the date of this Report the table presents the Company's shareholders, who had no less than 5% of votes at the general meeting of GTC S.A.:
| Number of shares and rights to the shares held |
% of share |
Number of votes (not in |
% of | Change in number of shares since 30 June 2024 |
|
|---|---|---|---|---|---|
| Shareholder | (not in million) | capital | million) | votes | (not in million) |
| GTC Dutch Holdings B.V. | 337,637,591 | 58.80% | 337,637,591 | 58.80% | No change |
| GTC Holding Zártkörűen Működő Részvénytársaság¹ |
21,891,289 | 3.81% | 21,891,289 | 3.81% | No change |
| Allianz OFE | 62,330,336 | 10.85% | 62,330,336 | 10.85% | No change |
| OFE PZU Złota Jesień | 54,808,287 | 9.54% | 54,808,287 | 9.54% | No change |
| Other shareholders | 97,587,619 | 17.00% | 97,587,619 | 17.00% | No change |
| Total | 574,255,122 | 100.00% | 574,255,122 | 100.00% | No change |
¹ Ultimate shareholder of GTC Dutch Holding B.V. and GTC Holding Zrt. is Optimum Venture Private Equity Funds, which indirectly holds 359,528,880 shares of GTC S.A., entitling to 359,528,880 votes in the Company, representing 62.61% of the Company's share capital and carrying the right to 62.61% of the total number of votes in GTC S.A.
7. Shares in GTC held by members of the management board and the supervisory board
SHARES HELD BY MEMBERS OF THE MANAGEMENT BOARD
The following table presents shares owned directly or indirectly by members of the Company's management board and supervisory board of the date of publication of this quarterly report, and changes in their holdings since the date of publication of the Group's last financial report (interim report for the three and six-month periods ended 30 June 2024) on 22 August 2024. The information included in the table below is based on information received from members of the management board and supervisory board.
| Balance as of 25 November 2024 (not in million) |
The nominal value of shares in PLN (not in million) |
Change since 22 August 2024 (not in million) |
|
|---|---|---|---|
| Management board members | |||
| Gyula Nagy | 0 | 0 | No change |
| Zsolt Farkas | 0 | 0 | No change |
| Balázs Gosztonyi | 0 | 0 | No change |
| György Stofa¹ | 0 | 0 | No change |
| Total Management board members | 0 | 0 | |
| Supervisory board members | |||
| János Péter Bartha | 0 | 0 | No change |
| Csaba Cservenák | 0 | 0 | No change |
| Lóránt Dudás | 0 | 0 | No change |
| Magdalena Frąckowiak² | 0 | 0 | No change |
| László Gut | 0 | 0 | No change |
| Dominik Januszewski | 0 | 0 | No change |
| Artur Kozieja | 0 | 0 | No change |
| Marcin Murawski | 0 | 0 | No change |
| Sławomir Niemierka³ | 0 | 0 | No change |
| Dr. Tamás Sándor | 0 | 0 | No change |
| Bálint Szécsényi | 0 | 0 | No change |
| Total Supervisory board members | 0 | 0 |
¹ Change since 1 September 2024
² Change since 25 September 2024
³ Balance as of 25 September 2024
Detailed description of changes in composition of the management board and supervisory board is presented under item 1.4 this Report.
8. Transactions with related parties concluded on terms other than market terms
The Group presents information on the material transactions that the Company, or its subsidiaries, concluded with a related party in the consolidated financial statements for the nine-month period ended 30 September 2024 in Note 17 Related Party Transactions.
In the nine-month period ended 30 September 2024, the Group did not conduct any material transactions with the related parties on terms other than market terms.
9. Proceedings before a court or public authority involving Globe Trade Centre SA or its subsidiaries with total value of the liabilities or claims being material
There are no material individual or group proceedings before a court or public authority involving Globe Trade Centre SA or its subsidiaries.
10. Terms and abbreviations
Terms and abbreviations capitalized in this management's board Report shall have the following meanings unless the context indicates otherwise:
| the Company or GTC |
are to Globe Trade Centre S.A.; |
|---|---|
| the Group or GTC Group |
are jointly to Globe Trade Centre S.A. and its consolidated subsidiaries; |
| Shares | is to the shares in Globe Trade Centre S.A., which were introduced to public trading on the Warsaw Stock Exchange in May 2004 and later and are marked under the PLGTC0000037 code and inward listed on Johannesburg Stock Exchange in August 2016; |
| Bonds | is to the bonds issued by Globe Trade Centre S.A. or its consolidated subsidiaries and introduced to alternative trading market and marked with the ISIN codes PLGTC0000318, HU0000360102, HU0000360284 and XS2356039268; |
| the Report | is to the consolidated quarterly report prepared according to art. 66 of the Decree of the Finance Minister of 29 March 2018 on current and periodical information published by issuers of securities and conditions of qualifying as equivalent the information required by the provisions of the law of a country not being a member state; |
| CEE | is to the Group of countries that are within the region of Central and Eastern Europe (Poland, Hungary); |
| SEE | is to the Group of countries that are within the region of South-Eastern Europe (Bulgaria, Croatia, Romania, and Serbia); |
| Net rentable area, NRA, or net leasable area, NLA |
are to the metric of the area of a given property as indicated by the property appraisal experts to prepare the relevant property valuations. With respect to commercial properties, the net leasable (rentable) area is all the office or retail leasable area of a property exclusive of non-leasable space, such as hallways, building foyers, and areas devoted to heating and air conditioning installations, elevators, and other utility areas. The specific methods of calculation of NRA may vary among particular properties, which is due to different methodologies and standards applicable in the various geographic markets on which the Group operates; |
| Gross rentable area or gross leasable area, GLA |
are to the amount of the office or retail space available to be rented in completed assets multiplied by add-on-factor. The gross leasable area is the area for which tenants pay rent, and thus the area that produces income for the Group; |
| Total property portfolio |
is to book value of the Group's property portfolio, including: investment properties (completed, under construction and landbank), residential landbank, assets held for sale, and the rights of use of land under perpetual usufruct; |
| Commercial | is to properties with respect to which GTC Group derives revenue from rent |
|---|---|
| properties | and includes both office and retail properties; |
Occupancy rate is to average occupancy of the completed assets based on square meters ("sqm") of the gross leasable area;
Funds From Operations, FFO, FFO I are to profit before tax less tax paid, after adjusting for non-cash transactions (such as fair value or real estate remeasurement, depreciation and amortization share base payment provision and unpaid financial expenses), the share of profit/(loss) of associates and joint ventures, and one-off items (such as FX differences and residential activity and other non-recurring items);
EPRA NTA is a net asset value measure under the assumption that the entities buy and sell assets, thereby crystallizing certain levels of deferred tax liability. It is computed as the total equity less non-controlling interest, excluding the derivatives at fair value as well as deferred taxation on property (unless such item is related to assets held for sale);
In-place rent is to rental income that was in place as of the reporting date. It includes headline rent from premises, income from parking, and other rental income;
Net loan to value (LTV); net loan-tovalue ratio are to net debt divided by Gross Asset Value. Net debt is calculated as total financial debt net of cash and cash equivalents and deposits and excluding loans from non-controlling interest and deferred debt issuance costs. Gross Asset Value is investment properties (excluding the right of use under land leases), residential landbank, assets held for sale, financial assets, buildings for own use, and share on equity investments. Net loan to value provides a general assessment of financial risk undertaken;
The average cost of debt; average interest rate is calculated as a weighted average interest rate of total debt, as adjusted to reflect the impact of contracted interest rate swaps and cross-currency swaps by the Group;
EUR, € or euro are to the single currency of the participating Member States in the Third Stage of European Economic and Monetary Union of the Treaty Establishing the European Community, as amended from time to time;
PLN or zloty are to the lawful currency of Poland;
HUF is to the lawful currency of Hungary;
JSE is to the Johannesburg Stock Exchange.
GLOBE TRADE CENTRE S.A.
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND NINE-MONTH PERIODS ENDED 30 SEPTEMBER 2024
| Note | 30 September 2024 unaudited |
31 December 2023 audited |
|
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Investment property | 8 | 2,338.0 | 2,273.4 |
| Residential landbank | 29.4 | 27.2 | |
| Property, plant and equipment | 15.1 | 16.0 | |
| Blocked deposits | 13.5 | 13.1 | |
| Deferred tax asset | 2.3 | 1.8 | |
| Derivatives | 9 | 0.6 | 2.3 |
| Non-current financial assets measured at fair value through profit or loss |
15 | 146.8 | 135.1 |
| Other non-current assets | 0.2 | 0.2 | |
| Loan granted to non-controlling interest partner | 7 | 12.1 | 11.6 |
| 2,558.0 | 2,480.7 | ||
| Current assets | |||
| Accounts receivables | 16.5 | 15.7 | |
| VAT and other tax receivables | 4.4 | 3.1 | |
| Income tax receivables | 1.7 | 1.5 | |
| Prepayments and other receivables | 1 | 31.7 | 52.4 |
| Derivatives | 9 | 4.4 | 11.9 |
| Short-term blocked deposits | 24.9 | 17.3 | |
| Cash and cash equivalents | 14 | 48.4 | 60.4 |
| Assets held for sale | 11 | 32.6 | 13.6 |
| 164.6 | 175.9 | ||
| TOTAL ASSETS | 2,722.6 | 2,656.6 |
| Note | 30 September 2024 unaudited |
31 December 2023 audited |
|
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| Equity attributable to equity holders of the Company | 13 | ||
| Share capital | 12.9 | 12.9 | |
| Share premium | 668.9 | 668.9 | |
| Capital reserve | (49.3) | (49.3) | |
| Hedge reserve | (7.7) | 0.7 | |
| Foreign currency translation reserve | (2.6) | (2.6) | |
| Accumulated profit | 481.9 | 471.3 | |
| 1,104.1 | 1,101.9 | ||
| Non-controlling interest | 7 | 25.8 | 24.3 |
| Total Equity | 1,129.9 | 1,126.2 | |
| Non-current liabilities | |||
| Long-term portion of borrowings | 10 | 1,168.9 | 1,228.7 |
| Lease liabilities | 8 | 66.7 | 43.2 |
| Deposits from tenants | 13.5 | 13.1 | |
| Long term payables | 8.4 | 5.2 | |
| Derivatives | 9 | 26.1 | 18.7 |
| Deferred tax liabilities | 135.4 | 135.1 | |
| 1,419.0 | 1,444.0 | ||
| Current liabilities | |||
| Current portion of borrowings | 10 | 114.1 | 45.3 |
| Trade payables and provisions | 37.2 | 34.0 | |
| Deposits from tenants | 3.3 | 2.4 | |
| VAT and other taxes payables | 2.2 | 1.9 | |
| Income tax payables | 1.4 | 2.4 | |
| Liabilities related to assets held for sale | 11 | 15.5 | 0.4 |
| 173.7 | 86.4 | ||
| TOTAL EQUITY AND LIABILITIES | 2,722.6 | 2,656.6 |
The accompanying notes are an integral part of this Condensed Consolidated Interim Financial Statements
| Note | Nine-month period ended 30 September |
Three-month period ended 30 September |
|||
|---|---|---|---|---|---|
| Unaudited | 2024 | 2023 | 2024 | 2023 | |
| Rental revenue | 5 | 104.5 | 99.5 | 34.9 | 34.1 |
| Service charge revenue | 5 | 34.9 | 35.8 | 11.9 | 11.7 |
| Service charge costs | 5 | (42.4) | (40.1) | (14.8) | (13.2) |
| Gross margin from operations | 97.0 | 95.2 | 32.0 | 32.6 | |
| Selling expenses | (1.5) | (1.8) | (0.4) | (0.6) | |
| Administration expenses | (12.3) | (14.9) | (3.2) | (6.2) | |
| Loss from revaluation | 8 | (6.3) | (57.1) | (7.0) | (5.8) |
| Other income | 0.6 | 0.5 | 0.4 | - | |
| Other expenses | (1.3) | (1.3) | (0.5) | (0.2) | |
| Net operating profit | 76.2 | 20.6 | 21.3 | 19.8 | |
| Foreign exchange differences | (0.5) | 0.5 | (0.1) | (0.7) | |
| Finance income | 2.4 | 0.6 | 1.0 | 0.2 | |
| Finance cost | 6 | (29.6) | (25.3) | (10.3) | (8.9) |
| Result before tax | 48.5 | (3.6) | 11.9 | 10.4 | |
| Taxation | 12 | (7.1) | (2.4) | (2.0) | (4.8) |
| Result for the period | 41.4 | (6.0) | 9.9 | 5.6 | |
| Attributable to: | |||||
| Equity holders of the Parent Company |
39.9 | (7.4) | 9.4 | 4.6 | |
| Non-controlling interest | 7 | 1.5 | 1.4 | 0.5 | 1.0 |
| Basic earnings per share (in Euro) | 16 | 0.07 | (0.01) | 0.02 | 0.01 |
| Nine-month period ended 30 September |
Three-month period ended 30 September |
|||
|---|---|---|---|---|
| Unaudited | 2024 | 2023 | 2024 | 2023 |
| Result for the period | 41.4 | (6.0) | 9.9 | 5.6 |
| Net other comprehensive income for the period, net of tax not to be reclassified to profit or loss in subsequent periods |
- | - | - | - |
| Result on hedge transactions | (9.8) | 13.5 | (6.1) | 2.0 |
| Income tax | 1.4 | (1.0) | 0.9 | (0.2) |
| Net result on hedge transactions | (8.4) | 12.5 | (5.2) | 1.8 |
| Foreign currency translation | - | - | - | (0.1) |
| Net other comprehensive income for the period, net of tax to be reclassified to profit or loss in subsequent periods |
(8.4) | 12.5 | (5.2) | 1.7 |
| Total comprehensive income for the period | 33.0 | 6.5 | 4.7 | 7.3 |
| Attributable to: | ||||
| Equity holders of the Parent Company | 31.5 | 5.1 | 4.2 | 6.3 |
| Non-controlling interest | 1.5 | 1.4 | 0.5 | 1.0 |
| Sh ita l are ca p |
Sh are mi pre um |
Ca ita l p res erv e |
He dg e r es erv e |
Fo rei gn cu rre nc y lat ion tra ns res erv e |
Ac lat ed cu mu fit pro |
To tal |
No llin tro n-c on g int st ( "N CI" ) ere |
To tal |
|
|---|---|---|---|---|---|---|---|---|---|
| Ba lan of ce as 1 J 20 24 (a ud ite d) an ua ry |
12 .9 |
66 8.9 |
( 49 .3) |
0.7 | ( 2.6 ) |
47 1.3 |
1, 10 1.9 |
24 .3 |
1, 12 6.2 |
| Ot he he ive lo r c om pre ns ss |
- | - | - | ( 8.4 ) |
- | - | ( 8.4 ) |
- | ( 8.4 ) |
| Re lt fo r th eri od su e p |
- | - | - | - | - | 39 .9 |
39 .9 |
1.5 | 41 .4 |
| To tal reh siv ult co mp en e r es for th eri od e p |
- | - | - | ( 8.4 ) |
- | 39 .9 |
31 .5 |
1.5 | 33 .0 |
| Div ide nd id pa |
- | - | - | - | - | ( 29 .3) |
( 29 .3) |
- | ( 29 .3) |
| Ba lan of 30 Se tem be ce as p r (u ) 20 24 ud ited na |
12 .9 |
66 8.9 |
( 49 .3) |
( 7.7 ) |
( 2.6 ) |
48 1.9 |
1, 104 .1 |
25 .8 |
1, 12 9.9 |
| Sh ita l are ca p |
Sh are mi pre um |
Ca ita l p res erv e |
He dg e r es erv e |
Fo rei gn cu rre nc y tra lat ion ns res erv e |
Ac lat ed cu mu fit pro |
To tal |
No tro llin n-c on g ( CI" ) int st "N ere |
To tal |
|
|---|---|---|---|---|---|---|---|---|---|
| Ba lan of ce as 1 J 20 23 (a ud ite d) an ua ry |
12 .9 |
66 8.9 |
( 49 .3) |
( ) 7.5 |
( 2.6 ) |
49 0.5 |
1, 11 2.9 |
22 .7 |
1, 13 5.6 |
| Ot he he ive in r c om pre ns co me |
- | - | - | 12 .5 |
- | - | 12 .5 |
- | 12 .5 |
| Re lt fo r th eri od su e p |
- | - | - | - | - | ( 7.4 ) |
( 7.4 ) |
1.4 | ( 6.0 ) |
| To tal reh siv ult co mp en e r es for th eri od e p |
- | - | - | 12 .5 |
- | ( 7.4 ) |
5.1 | 1.4 | 6.5 |
| Div ide nd id pa |
- | - | - | - | - | ( 29 .7) |
( 29 .7) |
- | ( 29 .7) |
| NC Tra ctio ith I nsa n w |
- | - | - | - | - | - | - | 1.8 | 1.8 |
| CI Div ide nd id t o N pa |
- | - | - | - | - | - | - | ( 0.9 ) |
( 0.9 ) |
| Ba lan of 30 Se tem be ce as p r 20 23 (u ud ited ) na |
12 .9 |
66 8.9 |
( 49 .3) |
5.0 | ( 2.6 ) |
45 3.4 |
1, 08 8.3 |
25 .0 |
1, 11 3.3 |
| Nine-month period ended |
Nine-month period ended |
||
|---|---|---|---|
| Unaudited | Note | 30 September 2024 | 30 September 2023 |
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||
| Result before tax | 48.5 | (3.6) | |
| Adjustments for: | |||
| Loss/(profit) from revaluation | 8 | 6.3 | 57.1 |
| Foreign exchange differences | 0.5 | (0.5) | |
| Finance income | (2.4) | (0.6) | |
| Finance cost | 6 | 29.6 | 25.3 |
| Share based payment provision revaluation | - | (0.8) | |
| Depreciation | 1.0 | 0.7 | |
| Operating cash before working capital changes | 83.5 | 77.6 | |
| Increase in accounts receivables and other current assets | (2.4) | (3.0) | |
| Increase in deposits from tenants | 1.8 | 2.2 | |
| Increase / (decrease) in trade and other payables | (0.8) | 1.3 | |
| Cash generated from operations | 82.1 | 78.1 | |
| Tax paid in the period | (6.2) | (6.7) | |
| Net cash from operating activities | 75.9 | 71.4 | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||
| Expenditure on investment property | 8 | (62.5) | (77.1) |
| Purchase of completed assets and land | - | (14.1) | |
| Purchase of investment property under construction | 1 | (12.0) | - |
| Sale of completed assets | - | 49.2 | |
| Sale of subsidiary | 1, 11 | 11.4 | 0.4 |
| Change in short-term deposits designated for investment | 1 | 14.2 | - |
| Expenditure on non-current financial assets | 1,15 | (6.1) | (2.7) |
| Change in advances for assets held for sale | (0.4) | 0.3 | |
| VAT/tax on purchase/sale of investment property | (1.4) | 1.9 | |
| Interests received | 1.3 | 0.2 | |
| Net cash used in investing activities | (55.5) | (41.9) | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||
| Proceeds from long-term borrowings | 87.6 | 35.4 | |
| Repayment of long-term borrowings | (51.5) | (28.3) | |
| Interest paid | (28.8) | (24.3) | |
| Dividend paid | 1 | (29.6) | (27.7) |
| Repayment of lease liability | (0.7) | (0.8) | |
| Loan origination costs | (0.7) | (0.7) | |
| Decrease/(increase) in short term deposits | (8.5) | (5.1) | |
| Dividend paid to non-controlling interest | - | (0.9) | |
| Net cash used in financing activities | (32.2) | (52.4) | |
| Net foreign exchange difference, related to cash and cash equivalents |
0.7 | (1.0) | |
| Net change in cash and cash equivalents | (11.1) | (23.9) | |
| Cash and cash equivalents at the beginning of the period | 60.4 | 115.1 | |
| Cash and cash equivalents at the end of the period | 14 | 49.3 | 91.2 |
1. Principal activities
Globe Trade Centre S.A. (the "Company", "GTC S.A." or "GTC") with its subsidiaries ("GTC Group" or "the Group") is an international real estate developer and investor. The Company was registered in Warsaw on 19 December 1996. The Company's registered office is in Warsaw (Poland) at Komitetu Obrony Robotników 45a. The Company owns, through its subsidiaries, commercial and residential real estate companies with a focus on Poland, Hungary, Bucharest, Belgrade, Zagreb and Sofia. There is no seasonality in the business of the Group companies.
As of 30 September 2024 , the majority shareholder of the Company is GTC Dutch Holdings B.V. ("GTC Dutch") who holds 337.637.591 shares in the Company representing 58.80% of the Company's share capital, entitling to 337,637,591 votes in the Company, representing 58.80% of the total number of votes in GTC S.A. Additionally, GTC Holding Zrt. holds 21,891,289 shares, entitling to 21,891,289 votes in GTC S.A., representing 3.81% of the Company's share capital and carrying the right to 3.81% of the total number of votes in GTC S.A. Ultimate shareholder of GTC Dutch Holding B.V. and GTC Holding Zrt. is Optimum Venture Private Equity Funds, which indirectly holds 359,528,880 shares of GTC S.A., entitling to 359,528,880 votes in the Company, representing 62.61% of the Company's share capital and carrying the right to 62.61% of the total number of votes in GTC S.A.
The ultimate controlling party of the Group is Pallas Athéné Domus Meriti Foundation.
EVENTS IN THE PERIOD FINANCING
In February 2024, Dorado 1 EOOD, a wholly-owned subsidiary of the Company, has signed EUR 55.0 loan agreement with DSK Bank AD and OTP Bank PLC with a maturity in March 2029. The full amount was drawn down.
In December 2023, the Company transferred EUR 29.5 to an escrow account held with an external legal company with the purpose of acquiring green bonds issued by GTC Aurora (further "Aurora bonds"). Running the acquisition transactions was handed over to a financial expert (further the "Broker"). In the nine month period ended 30 September 2024, the Broker bought back 5,500 Aurora bonds and transferred to GTC Group with nominal value of EUR 5.5 at cost of EUR 4.9. GTC Group recognized income from buy-back of Aurora bonds in amount of EUR 0.6. The broker acquired also bonds with ISIN HU0000362207 in the value of EUR 3.9 that were transferred to GTC Group.
In addition, GTC Group decided to lower the amount on the escrow held for buy-back, EUR 14.2 (EUR 12.2 in first quarter of 2024 and EUR 2 in third quarter of 2024) in cash was returned to GTC including the interest income accumulated. For the remaining amount of EUR 7, GTC Group and the Broker signed an amendment to extend the current agreement until 16 December 2024.
On 25 June 2024, Globis Poznań Sp. z o.o., a wholly-owned subsidiary of the Company, signed the annex with Santander Bank Polska S.A. which extended repayment date from 30 June to 31 August 2024. The loan was repaid on the maturity date.
On 14 August 2024, GTC Aeropark sp. z o.o. and Artico sp. z o.o., wholly-owned subsidiaries of the Company, have signed EUR 31.6 loan agreement with Santander Bank Polska S.A. with a 5-year maturity after utilisation date. The full amount was drawn down.
MEMBERS OF THE GOVERNING BODIES
On 18 March 2024, the Company entered into a mutual employment contract termination agreement with Barbara Sikora, who resigned from her seat on the Management Board of the Company. The resignation is effective at the date of the contract.
On 23 April 2024, the Supervisory Board of GTC appointed Mr. Balázs Gosztonyi as a member of the Management Board of GTC S.A. The appointment is effective 24 April 2024.
On 30 August 2024, the Supervisory Board of GTC appointed Mr. György Stofa as a member of the Management Board of GTC S.A. The appointment is effective 1 September 2024.
TRANSACTIONS
On 21 June 2024, GTC Elibre GmbH acquired investment property under construction (senior housing for rent) in Berlin area from a related party, not associated with the majority shareholder, for the total consideration of EUR 32.0 (including taxes and transaction costs). First instalment of EUR 12.0 was paid as a part of forward funding transaction and legal title was transferred as of 25 June 2024. Remaining part should be settled in cash received from future external financing that is yet to be obtained. Elibre project will provide 50 residential units with the total living space of 4,014 sqm. Transaction is accounted for as asset deal.
In the nine-month period ended 30 September 2024, GTC Origine Investments Pltd., a wholly-owned subsidiary of the Company, acquired shares in the Hungarian public company - NAP Nyrt for the total consideration of EUR 4.9 (further details in note 15).
On 4 July 2024 the disposal of GTC LCHD Projekt Kft, a wholly-owned subsidiary of GTC Origine Investments Pltd. was completed in accordance with the sale-and-purchase agreement.
In August 2024, GTC KLZ 7-10 Kft. signed a general agreement for the development of a residential for sale project in the city centre of Budapest. Contracted cost of development is EUR 16.4. Planned completion is November 2027. Project will provide 120 residential units with the total living space of 5,500 sqm.
On 18 September 2024, the Management Board of the Company adopted resolution regarding the disposal of GTC Seven Gardens d.o.o., a wholly-owned subsidiary of the Company. GTC Seven Gardens d.o.o. portfolio consists of the office building in Zagreb - Matrix C. The sale price shall be EUR 13 (equal to the net proceeds from the transaction). GTC Seven Gardens d.o.o will be sold together with its bank loan obligation (EUR 14). The closing of the transaction is expected to take place before the end of Q4 2024.
OTHER
On 26 June 2024, the Company's shareholders adopted a resolution regarding the distribution of a dividend in the amount of EUR 29.3 (PLN 126.3 million). The dividend was paid in September 2024.
Impact of the situation in Ukraine on GTC Group
Detailed analysis of the impact of the war on the operations of the Group has been performed for the purpose of preparation of the annual consolidated financial statements.
Similarly, as at the date of these financial statements, the direct impact of the war in Ukraine on the Group's operations is not material. However, it is not possible to estimate the scale of such impact in the future and due to high volatility, the Company monitors the situation on an ongoing basis and analyses its potential impact both from the perspective of individual projects and the entire Group and its long-term investment plans.
2. Basis of preparation
The Condensed Consolidated Interim Financial Statements for the three and nine-month periods ended 30 September 2024 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by EU.
All the financial data is presented in EUR and expressed in millions unless indicated otherwise.
At the date of authorisation of these consolidated financial statements, taking into account the EU's ongoing process of IFRS endorsement and the nature of the Group's activities, there is no significant difference between International Financial Reporting Standards applying to these consolidated financial statements and International Financial Reporting Standards endorsed by the European Union. The new standards which have been issued but are not effective yet in the financial year beginning on 1 January 2024 have been presented in the Group's consolidated financial statements for the year ended 31 December 2023 (note 6).
The Condensed Consolidated Interim Financial Statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's consolidated financial statements and the notes there to for the year ended 31 December 2023, which were authorized for issue on 23 April 2024. The interim financial results are not necessarily indicative of the full year results.
The functional currency of GTC S.A. and most of its subsidiaries is euro, as the Group primarily generates and expends cash in euro: prices (rental income) are denominated in euro and all external borrowings are denominated in euro or hedged to euro through swap instruments.
The functional currency of some of GTC's subsidiaries is other than euro. The financial statements of those companies prepared in their functional currencies are included in the consolidated financial statements by a translation into euro using appropriate exchange rates outlined in IAS 21 The Effects of Changes in Foreign Exchange Rates. Assets and liabilities are translated at the period end exchange rate, while income and expenses are translated at average exchange rates for the period if it approximates actual rate. All resulting exchange differences are classified in equity as "Foreign currency translation reserve" without affecting earnings for the period.
As of 30 September 2024, the Group's negative net working capital (defined as current assets less current liabilities) amounted to EUR 9.1. It was mainly a result of presentation of bank loan in Galeria CTWA sp. z o.o. in the amount of EUR 101.8 as current liabilities. Due to the repayment schedule the loan must be repaid until 31 March 2025. The Company's Management Board is taking appropriate actions to secure refinancing and ongoing negotiations are in place. Moreover, there are no other significant obligations which will be in force for at least twelve months from the date of the financial statements and are not presented as current liabilities.
The management has analysed the timing, nature and scale of potential financing needs of particular subsidiaries and believes that there are no risks for paying current financial liabilities and cash on hand, as well as, expected operating cash-flows will be sufficient to fund the Group's anticipated cash requirements for working capital purposes, for at least the next twelve months from the date of the financial statements. Consequently, the consolidated financial statements have been prepared under the assumption that the Group companies will continue as a going concern in the foreseeable future, for at least twelve months from the date of the financial statements.
There were no other than described in the note 15.1 (Ireland notes) changes in significant accounting estimates and management's judgements during period.
3. Significant accounting policies, new standards, interpretations and amendments adopted
The accounting policies adopted in the preparation of the Condensed Consolidated Interim Financial Statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2023 (see note 6 to the consolidated financial statements for 2023) except for changes in the standards which became effective as of 1 January 2024:
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Noncurrent (issued on 23 January 2020 amended 15 July 2020 and 31 October 2023) - not yet endorsed by EU at the date of approval of these financial statements.
Other standards issued but not effective are not expected to impact the Group's financial statements.
The Group's assessment is that the above changes have no material impact on the Condensed Consolidated Interim Financial Statements.
The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. No changes to comparative data or error corrections were made.
4. Investments in subsidiaries
The Group structure is consistent with presented in the Group's annual consolidated financial statements for the year ended 31 December 2023 (see note 8 to the consolidated financial statements for 2023) except for the following change occurred in the nine-month period ended 30 September 2024:
- liquidation of Riverside Apartmanok Kft. (wholly-owned subsidiary of GTC Hungary seated in Hungary),
- acquisition of Clara Liffey GP S.á r.l. (wholly-owned subsidiary of GTC Liffey Kft. seated in Hungary),
- establishment of GTC Germany GmbH (wholly-owned subsidiary of GTC Origine Investments Pltd. seated in Hungary),
- establishment of GTC Kapitalbeteiligung GmbH (wholly-owned subsidiary of GTC Germany GmbH seated in Germany),
- establishment of GTC Elibre GmbH & Co. KG (wholly-owned subsidiary of GTC Germany GmbH seated in Germany),
- establishment of GTC Trinity d.o.o. (wholly-owned subsidiary of GTC S.A. seated in Poland),
- sale of GTC LCHD Projekt Kft. (wholly-owned subsidiary of GTC Origine Investments Pltd. seated in Hungary),
- establishment of GTC Holding S.á r.l. (wholly-owned subsidiary of GTC S.A. seated in Poland),
- establishment of GTC Paula S.á r.l. (wholly-owned subsidiary of GTC Holding S.á r.l. seated in Luxembourg).
Newly established German entities are presented as "other" for the segmental analysis purposes.
5. Segmental analysis
The operating segments are aggregated into reportable segments, taking into consideration the nature of the business, operating markets, and other factors. Operating segments are divided into geographical zones, which have common characteristics and reflect the nature of management reporting structure: Poland, Hungary, Bucharest, Belgrade, Sofia, Zagreb and others.
Sector analysis of rental and service charge income for the nine-month and three-month periods ended 30 September 2024 and 30 September 2023 is presented below:
| Nine-month period ended 30 September |
Three-month period ended 30 September |
||||
|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | ||
| Rental income from office sector | 64.8 | 61.4 | 21.6 | 21.4 | |
| Service charge revenue from office sector | 21.4 | 21.5 | 7.4 | 7.0 | |
| Rental income from retail sector | 39.7 | 38.1 | 13.3 | 12.7 | |
| Service charge revenue from retail sector | 13.5 | 14.3 | 4.5 | 4.7 | |
| TOTAL | 139.4 | 135.3 | 46.8 | 45.8 |
Segment analysis of rental income and costs for the nine-month and three-month periods ended 30 September 2024 and 30 September 2023 is presented below:
| Nine-month period ended 30 September 2024 | Three-month period ended 30 September 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| Portfolio | Rental revenue |
Service charge revenue |
Service charge costs |
Gross margin from operations |
Rental revenue |
Service charge revenue |
Service charge costs |
Gross margin from operations |
| Poland | 38.8 | 13.4 | (17.6) | 34.6 | 12.9 | 4.6 | (6.1) | 11.4 |
| Belgrade | 8.8 | 2.8 | (2.7) | 8.9 | 3.0 | 0.9 | (0.9) | 3.0 |
| Hungary | 29.1 | 11.0 | (12.3) | 27.8 | 9.8 | 3.9 | (4.3) | 9.4 |
| Bucharest | 8.0 | 2.1 | (2.6) | 7.5 | 2.6 | 0.7 | (0.9) | 2.4 |
| Zagreb | 8.0 | 2.8 | (3.4) | 7.4 | 2.7 | 0.8 | (1.2) | 2.3 |
| Sofia | 11.8 | 2.8 | (3.8) | 10.8 | 3.9 | 1.0 | (1.4) | 3.5 |
| Total | 104.5 | 34.9 | (42.4) | 97.0 | 34.9 | 11.9 | (14.8) | 32.0 |
Nine-month period ended 30 September 2023 Three-month period ended 30 September 2023
| Portfolio | Rental revenue |
Service charge revenue |
Service charge costs |
Gross margin from operations |
Rental revenue |
Service charge revenue |
Service charge costs |
Gross margin from operations |
|---|---|---|---|---|---|---|---|---|
| Poland | 38.9 | 15.1 | (16.2) | 37.8 | 13.0 | 4.9 | (5.4) | 12.5 |
| Belgrade | 7.6 | 2.5 | (2.8) | 7.3 | 2.8 | 0.9 | (0.9) | 2.8 |
| Hungary | 28.6 | 10.8 | (12.1) | 27.3 | 9.9 | 3.4 | (3.9) | 9.4 |
| Bucharest | 7.1 | 1.9 | (2.4) | 6.6 | 2.5 | 0.7 | (0.8) | 2.4 |
| Zagreb | 6.2 | 2.8 | (3.4) | 5.6 | 2.1 | 0.9 | (1.2) | 1.8 |
| Sofia | 11.1 | 2.7 | (3.2) | 10.6 | 3.8 | 0.9 | (1.0) | 3.7 |
| Total | 99.5 | 35.8 | (40.1) | 95.2 | 34.1 | 11.7 | (13.2) | 32.6 |
| Loans, | Deferred | |||||||
|---|---|---|---|---|---|---|---|---|
| Cash and | Other | bonds and | tax | Other | Total | |||
| Real estate1 | deposits | assets | Total assets | leases2 | liabilities | liabilities | liabilities | |
| Poland | 881.9 | 32.0 | 10.5 | 924.4 | 277.4 | 53.7 | 21.5 | 352.6 |
| Belgrade | 179.2 | 4.4 | 2.4 | 186.0 | 25.8 | 2.5 | 5.9 | 34.2 |
| Hungary | 786.3 | 28.7 | 28.2 | 843.2 | 261.8 | 21.8 | 20.7 | 304.3 |
| Bucharest | 177.2 | 3.7 | 1.2 | 182.1 | 6.4 | 12.7 | 3.3 | 22.4 |
| Zagreb | 140.3 | 4.8 | 14.2 | 159.3 | 43.8 | 16.4 | 19.0 | 79.2 |
| Sofia | 199.2 | 12.0 | 1.2 | 212.4 | 91.1 | 8.8 | 5.3 | 105.2 |
| Other | 49.2 | 0.5 | 2.7 | 52.4 | 2.0 | - | 2.3 | 4.3 |
| Non allocated3 | - | 0.7 | 162.1 | 162.8 | 647.5 | 19.5 | 23.5 | 690.5 |
| Total | 2,413.3 | 86.8 | 222.5 | 2,722.6 | 1,355.8 | 135.4 | 101.5 | 1,592.7 |
Segmental analysis of assets and liabilities as of 30 September 2024:
Segmental analysis of assets and liabilities as of 31 December 2023:
| Real estate1 | Cash and deposits |
Other assets |
Total assets |
Loans, bonds and leases2 |
Deferred tax liabilities |
Other liabilities |
Total liabilities |
|
|---|---|---|---|---|---|---|---|---|
| Poland | 859.0 | 40.6 | 14.2 | 913.8 | 269.9 | 55.5 | 19.2 | 344.6 |
| Belgrade | 177.7 | 5.9 | 2.6 | 186.2 | 25.8 | 2.5 | 5.0 | 33.3 |
| Hungary | 744.0 | 20.8 | 35.5 | 800.3 | 266.7 | 19.8 | 16.1 | 302.6 |
| Bucharest | 177.2 | 4.7 | 1.0 | 182.9 | 6.6 | 12.3 | 2.8 | 21.7 |
| Zagreb | 139.1 | 3.3 | 13.5 | 155.9 | 56.9 | 17.1 | 4.7 | 78.7 |
| Sofia | 198.5 | 6.3 | 1.6 | 206.4 | 36.1 | 8.7 | 4.0 | 48.8 |
| Other | 32.7 | - | 0.3 | 33.0 | 2.2 | - | 0.3 | 2.5 |
| Non allocated3 | - | 9.2 | 168.9 | 178.1 | 660.0 | 19.2 | 19.0 | 698.2 |
| Total | 2,328.2 | 90.8 | 237.6 | 2,656.6 | 1,324.2 | 135.1 | 71.1 | 1,530.4 |
6. Finance costs
Finance costs for the three and nine-month period ended 30 September 2024 and 30 September 2023 comprise the following amounts:
| Nine-month period ended 30 September |
Three-month period ended 30 September |
|||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Interest expenses4 (including hedge effect) |
25.9 | 22.0 | 9.1 | 7.9 |
| Finance costs related to lease liability | 2.1 | 1.4 | 0.6 | 0.5 |
| Other | 1.6 | 1.9 | 0.6 | 0.5 |
| Total | 29.6 | 25.3 | 10.3 | 8.9 |
The weighted average interest rate (including hedges) on the Group's loans as of 30 September 2024 was 2.89% p.a. (2.48% p.a. as of 31 December 2023).
1 Comprise investment property, residential landbank, assets held for sale and value of buildings (including right of use).
2 Excluding deferred issuance debt expenses.
3 Other assets represent mainly non-current financial assets. Loans, bonds and leases comprise mainly issued bonds. Other liabilities include mainly derivatives.
4 Comprise interest expenses on financial liabilities that are not fair valued through profit or loss, banking costs and other charges.
7. Non-controlling interest
The Company's subsidiary that holds Avenue Mall (Euro Structor d.o.o.) has granted in 2018 its shareholders a loan, pro-rata to their stake in the subsidiary. The loan principal and interest shall be repaid by 30 December 2026. In the event that Euro Structor renders a resolution for the distribution of dividend, Euro Structor has the right to set-off the dividend against the loan. In case a shareholder will sell its stake in Euro Structor, the loan shall be due for repayment upon the sale.
Summarised financial information of the material non-controlling interest as of 30 September 2024 is presented below:
| Euro Structor d.o.o. | |
|---|---|
| NCI share in equity | 25.8 |
| Loans granted to NCI | 12.1 |
| Total as of 30 September 2024 (unaudited) | 37.9 |
| NCI share in profit | 1.5 |
8. Investment Property
Investment property that are owned by the Group are office and commercial space, including properties under construction.
Completed assets are valued using discounted cash flow (DCF) method. Completed investment properties are externally valued by independent appraisers at year end and semi-annually based on open market values (RICS Standards). For the purpose of Q3 quarterly interim condensed consolidated financial statements the Group receives letters from its external appraisers to verify if the market value of completed investment properties has not changed compared to previous quarter.
Investment property can be split up as follows:
| 30 September 2024 | 31 December 2023 | |
|---|---|---|
| unaudited | audited | |
| Completed investment property | 1,987.7 | 2,007.4 |
| Investment property under construction | 122.8 | 67.5 |
| Investment property landbank | 164.0 | 158.5 |
| Right of use of lands under perpetual usufruct (IFRS 16) | 63.5 | 40.0 |
| Total | 2,338.0 | 2,273.4 |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (in millions of EUR)
The movement in investment property for the periods ended 30 September 2024 and 31 December 2023 were as follows:
| Right of use of lands under perpetual usufruct (IFRS 16) |
Completed investment property |
Investment property under construction |
Landbank | Total | |
|---|---|---|---|---|---|
| Carrying amount as of 1 January 2023 |
38.9 | 2,002.9 | 51.5 | 150.4 | 2,243.7 |
| Capitalised expenditures | - | 38.7 | 40.1 | 6.3 | 85.1 |
| Purchase of completed assets, investment property under construction and land |
- | - | - | 13.1 | 13.1 |
| Reclassification5 | - | 34.0 | (21.7) | (12.3) | - |
| Adjustment to fair value / (impairment) | - | (66.2) | (2.4) | 11.1 | (57.5) |
| Revaluation of right of use of lands under perpetual usufruct |
(0.8) | - | - | - | (0.8) |
| Reclassified to assets held for sale | - | - | - | (10.1) | (10.1) |
| Classified to assets for own use | - | (2.4) | - | - | (2.4) |
| Foreign exchange differences | 2.0 | - | - | - | 2.0 |
| Other changes | (0.1) | 0.4 | - | - | 0.3 |
| Carrying amount as of 31 December 2023 |
40.0 | 2,007.4 | 67.5 | 158.5 | 2,273.4 |
| Capitalised expenditures | - | 24.9 | 36.3 | 2.0 | 63.2 |
| Purchase of investment property under constructions6 |
- | - | 13.8 | - | 13.8 |
| Reclassified to assets held for sale7 | - | (27.3) | - | - | (27.3) |
| Prepaid right of use of lands under perpetual usufruct |
(0.4) | - | - | - | (0.4) |
| Adjustment to fair value | - | (18.1) | 5.2 | 3.5 | (9.4) |
| Revaluation of right of use of lands under perpetual usufruct |
(0.4) | - | - | - | (0.4) |
| Other changes* | 23.5 | 0.8 | - | - | 24.3 |
| Foreign exchange differences | 0.8 | - | - | - | 0.8 |
| Carrying amount as of 30 September 2024 |
63.5 | 1,987.7 | 122.8 | 164.0 | 2,338.0 |
(*) In the nine-month period ended 30 September 2024 the Group recognized increase in right-of-use (and corresponding increase in lease liabilities) due to new annual perpetual usufruct fee.
5 Completion of a part of Rose Hill project (EUR 10.9) in Budapest (Hungary) in Q2 2023 and Matrix C (EUR 23.1) in Zagreb (Croatia) in Q3 2023. Moreover, commencement of G-Delta Andrassy project in Budapest (transfer from landbank to under construction) in Q2 2023.
6 Please refer to note 1. Principal activities.
7 Please refer to note 11. Assets held for sale and liabilities related to assets held for sale.
Profit/(loss) from revaluation consists the following:
| Nine-month period ended 30 September |
Three-month period ended 30 September |
||||
|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | ||
| Adjustment to fair value of completed investment property |
(18.1) | (59.7) | (7.8) | (2.0) | |
| Adjustment to the fair value of investment properties under construction |
5.2 | (1.3) | (0.1) | (3.2) | |
| Adjustment to the fair value of landbank |
3.5 | 2.8 | 0.2 | (0.5) | |
| Total adjustment to fair value / (impairment) of investment property |
(9.4) | (58.2) | (7.7) | (5.7) | |
| Adjustment to fair value of financial assets and other |
4.1 | 2.5 | 0.8 | - | |
| Impairment of residential landbank | (0.6) | (0.5) | (0.4) | (0.1) | |
| Revaluation of right of use of lands under perpetual usufruct (including residential landbank) |
(0.4) | (0.9) | 0.3 | - | |
| Total recognised in profit or loss | (6.3) | (57.1) | (7.0) | (5.8) |
Assumptions used in the fair value valuations of completed assets as of 30 September 2024:
| Portfolio | Book value | GLA thousand |
Average Occupancy |
Actual Average rent |
Average ERV8 |
Average Yield9 |
|---|---|---|---|---|---|---|
| €'000 000 | sqm | % | Euro/ sqm/m | Euro/ sqm/m | % | |
| Poland office | 330.5 | 198 | 74% | 15.6 | 14.3 | 8.3% |
| Poland retail | 433.1 | 113 | 94% | 22.7 | 23.0 | 6.7% |
| Belgrade office | 49.5 | 18 | 100% | 18.7 | 18.8 | 7.9% |
| Belgrade retail | 90.0 | 34 | 98% | 20.6 | 21.6 | 9.1% |
| Hungary office | 607.3 | 203 | 89% | 19.0 | 17.7 | 6.7% |
| Hungary retail | 20.6 | 6 | 96% | 20.9 | 20.0 | 7.7% |
| Bucharest office | 162.0 | 62 | 83% | 19.4 | 18.6 | 7.4% |
| Zagreb office10 | 15.0 | 8 | 98% | 15.8 | 15.4 | 8.6% |
| Zagreb retail | 85.0 | 28 | 98% | 23.3 | 22.8 | 8.9% |
| Sofia office | 113.9 | 52 | 85% | 16.4 | 16.2 | 7.6% |
| Sofia retail | 80.8 | 23 | 100% | 24.8 | 25.0 | 8.4% |
| Total | 1,987.7 | 745 | 86% | 19.1 | 18.2 | 7.4% |
8 ERV- Estimated Rent Value (the open market rent value that a property can be reasonably expected to attain based on characteristics such as a condition of the property, amenities, location, and local market conditions).
9 Average yield is calculated as in-place rent divided by fair value of asset. 10 One office building (Matrix C) was reclassified to assets held for sale (please see note 11).
Assumptions used in the fair value valuations of completed assets as of 31 December 2023:
| Portfolio | Book value | GLA thousand |
Average Occupancy |
Actual Average rent |
Average ERV1 |
Average Yield12 |
|---|---|---|---|---|---|---|
| €'000 000 | sqm | % | Euro/ sqm/m | Euro/ sqm/m | % | |
| Poland office | 335.4 | 195 | 77% | 15.5 | 14.3 | 8.3% |
| Poland retail | 432.6 | 114 | 95% | 22.1 | 22.6 | 6.6% |
| Belgrade office | 49.5 | 18 | 100% | 18.4 | 18.5 | 7.7% |
| Belgrade retail | 90.0 | 34 | 99% | 19.9 | 21.7 | 9.0% |
| Hungary office | 595.8 | 203 | 87% | 20.3 | 16.8 | 7.2% |
| Hungary retail | 20.3 | 6 | 96% | 20.9 | 18.2 | 7.8% |
| Bucharest office | 161.9 | 62 | 82% | 19.4 | 18.6 | 7.3% |
| Zagreb office | 43.1 | 18 | 95% | 16.3 | 16.6 | 7.6% |
| Zagreb retail | 85.0 | 28 | 99% | 23.8 | 22.6 | 9.1% |
| Sofia office | 113.1 | 52 | 86% | 16.5 | 15.9 | 7.8% |
| Sofia retail | 80.7 | 23 | 99% | 24.4 | 25.0 | 8.1% |
| Total | 2,007.4 | 753 | 87% | 19.3 | 17.9 | 7.5% |
Information regarding investment property under construction:
| 30 September 2024 | 31 December 2023 | Estimated area (GLA) thousand sqm |
|
|---|---|---|---|
| Budapest (Center Point III) | 74.6 | 41.4 | 36 |
| Budapest (G-Delta Andrassy) | 23.6 | 19.2 | 4 |
| Budapest (Rose Hill Business Campus) | 9.9 | 6.9 | 11 |
| Berlin area (Elibre) | 14.7 | - | 4 |
| Total | 122.8 | 67.5 | 55.0 |
Information regarding book value of investment property landbank for construction:
| 30 September 2024 | 31 December 2023 | ||
|---|---|---|---|
| Poland | 56.7 | 53.1 | |
| Hungary | 47.4 | 47.4 | |
| Serbia | 37.8 | 36.2 | |
| Romania | 7.7 | 7.5 | |
| Bulgaria | 3.3 | 3.5 | |
| Croatia | 11.1 | 10.8 | |
| Total | 164.0 | 158.5 |
9. Derivatives
The Group holds instruments (i.e. IRS, CAP and cross-currency interest rate SWAP) that hedge the risk connected with fluctuations of interest rates and currencies rates. The instruments hedge interest and foreign exchange rates on loans and bonds for periods up to 10 years.
Derivatives are presented in financial statements as below:
| 30 September 2024 | 31 December 2023 | ||
|---|---|---|---|
| unaudited | audited | ||
| Non-current assets | 0.6 | 2.3 | |
| Current assets | 4.4 | 11.9 | |
| Non-current liabilities | (26.1) | (18.7) | |
| Total | (21.1) | (4.5) |
The movements in derivatives for the periods ended 30 September 2024 and 31 December 2023 were as follows:
| 30 September 2024 unaudited |
31 December 2023 audited |
|
|---|---|---|
| Fair value as of the beginning of the year | (4.5) | (24.1) |
| Charged to other comprehensive income | (9.8) | 8.0 |
| Charged to profit or loss11 | (6.8) | 11.6 |
| Fair value as of the end of the period | (21.1) | (4.5) |
The movements in hedge reserve presented in equity for the periods ended 30 September 2024 and 31 December 2023 were as follows:
| 30 September 2024 unaudited |
31 December 2023 audited |
|
|---|---|---|
| Hedge reserve as of the beginning of the year | 0.7 | (7.5) |
| Charged to other comprehensive income | (16.6) | 19.6 |
| Realized in the period (charged to profit or loss)12 | 6.8 | (11.6) |
| Total impact on other comprehensive income | (9.8) | 8.0 |
| Income tax on hedge transactions | 1.4 | 0.2 |
| Hedge reserve as of the end of the year | (7.7) | 0.7 |
Derivatives are measured at fair value at each reporting date. Valuations of hedging derivatives are considered as level 2 fair value measurements. Fair value of derivatives is measured using cash flow models based on the data from publicly available sources.
The Company applies cash flow hedge accounting and uses derivatives as hedging instruments. The Group uses both qualitative and quantitative methods for assessing effectiveness of the hedge. All derivatives are measured at fair value, effective part is included in other comprehensive income and reclassified to profit or loss when hedged item affects P&L.
The Group uses IRSs and CAPs for hedging interest rate risk on loans, and cross-currency interest rate SWAPs for hedging both interest rate risk and currency risk on bonds denominated in foreign currencies.
11 This gain/loss mainly offsets a foreign exchange losses/gains on bonds nominated in PLN and HUF. 12 This gain/loss mainly offsets a foreign exchange losses/gains on bonds nominated in PLN and HUF.
10. Long-term borrowings (loans and bonds)
| 30 September 2024 | 31 December 2023 | |
|---|---|---|
| unaudited | audited | |
| Bonds | 647.1 | 660.0 |
| Bank loans | 641.4 | 620.5 |
| Long-term borrowings' acquisition costs | (5.5) | (6.5) |
| Total borrowings | 1,283.0 | 1,274.0 |
| Of which | ||
| Long-term borrowings | 1,168.9 | 1,228.7 |
| Short-term borrowings | 114.1 | 45.3 |
| Total borrowings | 1,283.0 | 1,274.0 |
Bank loans are secured with mortgages over the assets and with security deposits together with assignment of the associated receivables and insurance rights.
In its financing agreements with banks, the Group undertakes to comply with certain financial covenants that are listed in those agreements. The main covenants are: maintaining at an agreed level Loan-to-Value and Debt Service Coverage ratios by the company that holds the project.
As at 30 September 2024, the Group complied with the financial covenants set out in the loan agreements and bonds terms.
In addition, substantially, all investment properties and investment properties under construction that were financed by lenders have been pledged. Fair value of the pledged assets exceeds the carrying value of the related loans.
Green Bonds (series maturing in 2027-2030) and green bonds (series maturing in 2028-2031) are denominated in HUF. All other bank loans and bonds are denominated in EUR.
Repayments of long-term debt and interest are scheduled as follows (the amounts are not discounted):
| 30 September 2024 | 31 December 2023 | |
|---|---|---|
| unaudited | audited | |
| First year13 | 150.9 | 70.2 |
| Second year | 743.4 | 151.3 |
| Third year | 121.1 | 778.6 |
| Fourth year | 58.6 | 80.8 |
| Fifth year | 159.9 | 87.2 |
| Thereafter | 177.6 | 203.3 |
| Total | 1,411.5 | 1,371.4 |
13 To be repaid during 12 months from the reporting date.
11. Assets held for sale and liabilities related to assets held for sale
The balances of assets held for sale as of 30 September 2024 and 31 December 2023 were as follows:
| 30 September 2024 unaudited |
31 December 2023 audited |
|
|---|---|---|
| GTC LCHD Projekt | - | 10.2 |
| Landbank in Poland | 3.5 | 3.4 |
| GTC Seven Gardens14 | 29.1 | - |
| Total | 32.6 | 13.6 |
Sale of GTC LCHD Projekt was finalized in July 2024. Transaction was completed with closing price in the value of EUR 13.2, out of which EUR 11.4 already collected.
In September 2024, GTC Seven Gardens d.o.o. was reclassified to assets held for sale – further details about that transaction are presented in note 1 Principal activities.
The balances of liabilities related to assets held for sale as of 30 September 2024 and 31 December 2023 were as follows:
| 30 September 2024 unaudited |
31 December 2023 audited |
|
|---|---|---|
| GTC Seven Gardens15 | 15.5 | - |
| Landbank in Poland | - | 0.3 |
| Landbank in Hungary | - | 0.1 |
| Total | 15.5 | 0.4 |
12. Taxation
Regulations regarding VAT, corporate income tax and social security contributions are subject to frequent changes. These frequent changes result in there being little point of reference, inconsistent interpretations and few established precedents that may be followed. The binding regulations also contain uncertainties, resulting in differences in opinion regarding the legal interpretation of tax regulations both between government bodies, and between government bodies and companies. Tax settlements and other areas of activity (e.g. customs or foreign currency related issues) may be subject to inspection by administrative bodies authorised to impose high penalties and fines, and any additional taxation liabilities calculated as a result must be paid together with high interest.
13. Capital and Reserves
Shareholders who, as at 30 September 2024, held above 5% of the Company shares were as follows:
- GTC Dutch Holdings B.V
- Otwarty Fundusz Emerytalny PZU "Złota Jesień"
- Allianz Polska Otwarty Fundusz Emerytalny.
14 Balance consists mainly of completed office building Matrix C in the value of EUR 27.3 and cash in the amount of EUR 0.9.
15 Balance consists mainly of bank loan in the value of EUR 14.2.
14. Cash and cash equivalents
Cash balance mainly consists of cash at banks. Cash at banks earns interest at floating rates based on term deposits' rates. All cash and cash equivalents are available for use by the Group. GTC Group cooperates mainly with banks with investment rating above B. The major bank, where the Group deposits 15% of cash and cash equivalents and blocked deposits is a financial institution with credit rating BBB-. Second bank with major Group's deposits (13%) is an institution with credit rating BBB. The Group monitors ratings of banks and manages concentration risk by allocating deposits in multiple financial institutions (over 10).
For the purpose of the statement of cash flows, cash and cash equivalents comprise the following at 30 September 2024 and 30 September 2023:
| 30 September 2024 | 30 September 2023 | |
|---|---|---|
| Cash at banks and on hand | 48.4 | 91.2 |
| Cash at banks related to assets held for sale | 0.9 | - |
| Cash and cash equivalents at the end of the period | 49.3 | 91.2 |
15. Non-current financial assets measured at fair value through profit or loss
As of 30 September 2024 and 31 December 2023 the fair value of non-current financial assets were as follows:
| 30 September 2024 | 31 December 2023 | |
|---|---|---|
| unaudited | audited | |
| Notes (Ireland) | 119.4 | 119.1 |
| Units (Trigal) | 15.6 | 13.9 |
| NAP shares | 4.9 | - |
| Bonds (ISIN HU0000362207) | 3.9 | - |
| ACP Fund | 3.0 | 2.1 |
| Total | 146.8 | 135.1 |
15.1 Notes (Ireland)
On 9 August 2022, a subsidiary of the Company invested via a debt instrument into a joint investment into the innovation park in County Kildare, Ireland (further Kildare Innovation Campus or "KIC"). The idea of the project is to build a database centre with power capacity of 179 MWs. GTC's investment comprised acquiring upfront notes in the value of EUR 115 and in accordance with the investment documentations GTC is obliged to further invest up to agreed amount of ca. EUR 9 to cover the costs indicated in the business plan and comprising such costs as permitting, financing, capex as well as operating costs of the business. As of 30 September 2024 the Company has already additionally invested EUR 4, which were spent in accordance with the business plan as indicated above.
The investment was executed by acquisition of 25% of notes (debt instrument) issued by a Luxembourg securitization vehicle, a financial instrument which gives the right to return at the exit from the project and dependent on the future net available proceeds derived from the project, including a promote mechanism. The maturity date for these notes is 9 August 2032. GTC expects to execute a cash inflow from the project at the maturity date or at an early exit date.
The investment is treated as joint investment due to the following: GTC has indirect economical rights through their notes protected by the GTC's consent to the reserved matters such as material deviation from the business plan, partial or total disposal of material assets [transfer of units] etc. This debt instrument does not meet the SPPI test therefore it is measured at fair value through profit or loss.
Kildare Innovation Campus, located outside of Dublin, extends over 72 ha (of which 34 ha is undeveloped). There are nine buildings that form the campus (around 101,685 sqm): six are lettable buildings with designated
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (in millions of EUR)
uses including industrial, warehouse, manufacturing and office/lab space. In addition, there are three amenity buildings, comprising a gym, a plant area, a campus canteen, and an energy center. The KIC currently generates around EUR 3.7 gross rental income per annum from the rental of the office and warehouse space and parking spaces on the KIC grounds.
A masterplan was permitted whereby the site and the campus are planned to be converted into a Life Science and Technology campus with a total of approximately 148,000 sq m. The planning permit was issued initially on 7 September 2023 and was finalized on 22 January 2024.
In February 2024 the contract with a major client was signed which is in line with the planning permit.
The next milestones for the project include completion of site highways and infrastructure works as well as power infrastructure works by 26 February 2028 (Phase 1).
As of 30 September 2024 the fair value of the notes were valued by Kroll Advisory (Ireland) Limited ("Kroll") in accordance with IFRS 13 Fair Value Measurement (fair value at level 3). Kroll estimated the range of fair value of the notes between EUR 120 and EUR 140. Taking into account no significant difference between the valuation and book value, no update to the balance as of 30 September 2024 in regards to the Ireland investment amount was presented. The project value used in the valuation of the instrument was established by Kroll Advisory (Ireland) Limited as of 30 September 2024, in accordance with the appropriate sections of the Valuation Technical and Performance Standards ("VPS") contained within the RICS Valuation – Global Standards 2022 (the "Red Book"). Key unobservable inputs used in the valuation are cost per MW, rent per KW/month and yield. Impact of changes by 2.5% or 5% in these inputs will not be higher than corresponding changes in GDV presented below.
Management concluded that the current book value of the notes represents their fair value, what is within the range estimated by Kroll. For the purpose of last valuation Management decided to amend the assumption regarding the expected exit date due to the current market conditions, but it does not affect Company's sales strategy. The change in that assessment combined with significant value drivers (mainly discount rate) resulted in Kildare's valuation remaining the same as in the previous period.
The following table presents significant unobservable inputs used in the fair value measurement of the notes:
| Significant unobservable inputs | Input | |
|---|---|---|
| Estimated discount rate | 33.72% | |
| Gross Development Value (GDV) | 4,300 EUR |
Information regarding inter-relationship between key unobservable inputs and fair value measurements is presented below:
| Total Fair Value of financial instrument | ||
|---|---|---|
| Increase | Decrease | |
| Change in estimated discount rate by 5% | 113.3 | 126.1 |
| Change in estimated discount rate by 10% | 107.6 | 133.5 |
| Change in estimated GDV by 2.5% | 125.0 | 116.4 |
| Change in estimated GDV by 5% | 131.0 | 113.4 |
15.2 Units (Trigal)
On 28 August 2022, GTC Origine Investments Pltd., a wholly-owned subsidiary of the Company, acquired 34% of units in Regional Multi Asset Fund Compartment 2 of Trigal Alternative Investment Fund GP S.á.r.l. ("Fund") for consideration of EUR 12.6 from an entity related to the Majority shareholder. The Fund is focused on commercial real estate investments in Slovenia and Croatia with a total gross asset value of EUR 68.75. The fund expected maturity is in Q4 2028. Valuation is based on fund management report, where NAV is measured at fair value allocated to our investment share (fair value at level 2).
15.3 ACP Fund
ACP Credit I SCA SICAV-RAIF (hereinafter referred as "ACP Fund") is a reserved alternative investment fund seated in Luxembourg with 2 compartments. GTC has a total commitment of EUR 5 in ACP Fund, and total of EUR 3 was called up to the end of September 2024. ACP Fund investment strategy is to build a portfolio of secured income-generating debt instruments in SMEs and medium-sized companies in Central Europe. Valuation is based on fund management report, where NAV is measured at fair value allocated to our investment share (fair value at level 2).
15.4 NAP shares
NAP registered capital is HUF 8.4 billion (ca. EUR 21.5) and it already produces "green energy" using 72 solar power plants with a total capacity of 42.6 MW (AC). Through a series of private and public capital raisings, NAP aim to achieve company growth to a total solar power capacity of around 100 MW (AC) by the end of 2024, which will significantly contribute to Hungary's annual renewable energy generation. Valuation is based on the public share price (fair value level 1).
On 11 October 2024, the Board of NAP Nyrt. appointed Mr. Balázs Gosztonyi as a member of the Supervisory Board and Mr. György Stofa as a member of the Management Board of NAP Nyrt. The appointment is effective 11 October 2024.
15.5 Bonds (ISIN HU0000362207)
The bonds are measured at fair value through profit and loss. The measurement of the bonds is at fair value Level 1 based on public bond quotes.
16. Earnings per share
Basic earnings per share were calculated as follows:
| Nine-month period ended 30 September |
Three-month period ended 30 September |
|||
|---|---|---|---|---|
| Unaudited | 2024 | 2023 | 2024 | 2023 |
| Result for the period attributable to equity holders (euro) |
39,900,000 | (7,400,000) | 9,400,000 | 4,600,000 |
| Weighted average number of shares for calculating basic earnings per share |
574,255,122 | 574,255,122 | 574,255,122 | 574,255,122 |
| Basic earnings per share (euro) | 0.07 | (0.01) | 0.02 | 0.01 |
There have been no potentially dilutive and dilutive instruments as at 30 September 2024 and 30 September 2023.
17. Related party transactions
There were no significant related party transactions in the nine-month period ended 30 September 2024 other than described in note 1 Principal activities.
18. Changes in commitments, contingent assets and liabilities
In reference to the transaction described in note 1 Principal activities regarding purchase of Elibre project, as of 30 September 2024, there is the contingent liability for the amount of EUR 20 as the difference between purchase price and already invested amount. That liability should be settled in cash received from future external financing that is yet to be obtained. The amount will be due for payment only after certain milestones are completed.
There were no other significant changes in commitments and contingent liabilities.
There were no significant changes in litigation settlements in the current period.
19. Subsequent events
On 23 October 2024, GTC Group signed a sale and purchase agreement concerning the sale of Glamp d.o.o., an owner of A-class office building in Belgrade – GTC X for EUR 52.2. Net proceeds from sale of subsidiary shall be EUR 24.2. Difference between the sale price and net proceeds is mainly due to the fact that part of the price will be used for bank loan repayment before the sale. The closing of the transaction is expected to take place by the end of Q4 2024.
On 15 November 2024 the Company entered into a series of share purchase agreements with, inter alia, Peach Property Group AG and LFH Portfolio Acquico S.À R.L., as the sellers, leading to the acquisition of the portfolio of residential assets in Germany (the "Portfolio") currently held by Peach Property Group AG (the "Transaction"). The closing of the Transaction is conditional upon the fulfilment of a number of conditions precedent specified in the Transaction documentation.
The envisaged Transaction assumes that the Company will indirectly acquire:
(i) from Peach Property Group AG 89.9% of the limited liability partnerships: Kaiserslautern I GmbH & Co. KG (or its legal successor) and Kaiserslautern II GmbH & Co. KG (or its legal successor) (the "Portfolio Partnerships"), and
(ii) from LFH Portfolio Acquico S.À R.L., and from ZNL Investment S.À R.L., as a result of a series of transactions, up to 89.9% of the limited liability companies: Portfolio Kaiserslautern III GmbH, Portfolio KL Betzenberg IV GmbH, Portfolio KL Betzenberg V GmbH, Portfolio Kaiserslautern VI GmbH, Portfolio Heidenheim I GmbH, Portfolio Kaiserslautern VII GmbH and Portfolio Helmstedt GmbH (the "Portfolio Companies")
at an adjusted property value of approximately EUR 448 based on 100% ownership of the Portfolio.
As the first tranche, the Company, indirectly through its subsidiary, GTC Paula S.À R.L., will acquire 89.9% of the shares in the Portfolio Partnerships and 79.8% of the shares in the Portfolio Companies for a total consideration comprising EUR 167 in cash and the Participating Notes with a total nominal value of approximately EUR 42, subject to adjustments. Participating notes are planned to be issued by the Company under the Polish Act on Bonds. The Participating Notes will be offered or transferred to LFH Portfolio Acquico S.À R.L. The Participating Notes will be unsecured, subordinated to all other liabilities due to the creditors of GTC and will have a final effective maturity beyond that of all of GTC's debt (i.e. 2044).
Peach Property Group AG will retain a 10.1% stake in the Portfolio Partnerships and the Portfolio Companies, while co-investors, ZNL Investment S.À R.L. and LFH Portfolio Acquico S.À R.L., will retain remaining specified shares. The Company will also be granted an option to purchase additional 10.1% of the Portfolio Companies at an option price determined in accordance with the formula applicable for the calculation of the consideration amount (as adjusted), provided that no reinvestments will be made. Consequently, the Company will acquire 89.9% of the Portfolio Partnerships and up to 89.9% of the Portfolio Companies.
Transaction costs incurred as of the date of the financial statements are not significant. The total value of costs associated with the acquisition will be disclosed in the annual financial statements as the Transaction has now been signed and further expenses may still arise.
The accounting treatment for the Transaction is being finalized, therefore the preliminary assessment if this is an asset acquisition or a business combination cannot be disclosed in this condensed financial statements.
Transaction described above was not concluded with any related party.
For the detailed description of the transaction please refer to the current report no. 21/2024 from 16 November 2024.
20. Approval of the financial statements
The interim condensed consolidated financial statements were authorised for the issue by the Management Board on 25 November 2024.
Independent registered auditor's report on the review of the condensed consolidated interim financial statements
To the Shareholders and the Supervisory Board of Globe Trade Centre Spółka Akcyjna
Introduction
We have reviewed the accompanying condensed consolidated interim financial statements of Globe Trade Centre S.A. Group (hereinafter called "the Group"), having Globe Trade Centre S.A. as its parent company (hereinafter called "the Parent Company"), comprising the condensed consolidated interim statement of financial position as at 30 September 2024 and the condensed consolidated interim income statement for the three-month period then ended and nine-month period then ended, the condensed consolidated interim statement of comprehensive income for the three-month period then ended and ninemonth period then ended, the condensed consolidated interim statement of changes in equity for ninemonth period then ended, the condensed consolidated interim statement of cash flows for nine-month period then ended and the related explanatory notes.
The Management Board of the Parent Company is responsible for the preparation and presentation of these condensed consolidated interim financial statements in accordance with the International Accounting Standard 34 Interim Financial Reporting as adopted by the European Union. Our responsibility is to express a conclusion on these condensed consolidated interim financial statements based on our review.
Scope of review
We conducted our review in accordance with the National Standard on Review Engagements 2410 in the wording of the International Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity as adopted by the National Council of Certified Auditors. A review of condensed consolidated interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with National Standards on Auditing. Consequently, it does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp. k., ul. Polna 11, 00-633 Warsaw, Poland, T: +48 (22) 746 4000, F:+48 (22) 742 4040 , www.pwc.pl
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements have not been prepared, in all material respect, in accordance with the International Accounting Standard 34 Interim Financial Reporting as adopted by the European Union.
Conducting the review on behalf of PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp.k., a company entered on the list of Registered Audit Companies with the number 144:
Dokument podpisany przez Piotr Wyszogrodzki Data: 2024.11.25 22:55:40 CET Signature Not Verified
Piotr Wyszogrodzki
Key Registered Auditor No. in the registry 90091
Warsaw, 25 November 2024