PHN Group Reports a Significant Increase in Adjusted EBITDA of More Than PLN 106 Million

In the three quarters of 2024, PHN Group achieved record rental revenue of PLN 220.0M, up 20% year-on-year, while also recording an increase in operating profitability in the rental segment from 59% to 64%. As a result, PHN Group also significantly improved its adjusted EBITDA, which stood at PLN 106.4M after three quarters of this year, which means an increase of nearly 40% from the three quarters of 2023.

PHN Group closed the three quarters of 2024 with revenue of PLN 482.3M, which, after taking into account administrative and sales expenses, translated into a net sales profit of PLN 100.6M. This is an increase of more than PLN 25.3M, or 34%, compared to the same period last year. The increase in net sales profit is primarily due to an increase in rental revenue from new space, including, among others, SKYSAWA and INTRACO Prime, as well as due to the improved occupancy rate of other properties in the PHN Group’s portfolio.

In Q3 2024, occupancy permits were obtained for two residential projects – KOLEJ NA 19 in Warsaw and Osiedle ŁAN in Wrocław, which will deliver a total of more than 320 apartments to the market. The process of handing over the units to their buyers is currently underway, which will allow for posting the result from development activities in the fourth quarter of this year.

The PHN Group’s financial condition continues to improve – maturing loan agreements have been renewed and new ones have been concluded for real estate refinancing, demonstrating PHN Group’s ability to obtain external financing on attractive terms.

At the same time, due to property impairment of 101.6M and interest expenses incurred as a consequence of servicing debt financing, PHN Group recorded a net loss of 112.2M over the three quarters of 2024.

“We are consistently meeting our business objectives, which will bring further improvements in profitability and the financial condition of PHN Group in the coming quarters. We maintain cost discipline and ensure the organisation’s efficiency at every level. We have reported record rental revenue with an increase in operating margin, and initiated changes in our real estate portfolio to sell the units that, after careful evaluation, do not fit the target structure of the portfolio. We are in the process of handing over more than 250 apartments from two completed projects – KOLEJ NA 19 and Osiedle ŁAN – for which we already have development agreements in place. We are expanding our development activities – in the third quarter, we started construction of the Nowa Nakielska by PHN project in Bydgoszcz, and there are other projects in the pipeline for nearly 700 apartments. PHN Group’s stable condition makes us look into the future with confidence,” said Wiesław Malicki, President of the Management Board of Polski Holding Nieruchomości.

In the first nine months of 2024, PHN Group continued its investment program in the office, residential and warehouse real estate sectors. Earlier this year, PHN Group launched the VENA office development, which will provide the market with more than 15,000 sqm of modern rental space. Construction of two residential projects has been completed, i.e. KOLEJ NA 19 and Osiedle ŁAN, and four more are currently under construction, i.e. Młoda Białołęka II, Osiedle Olimpijczyk II, Willa Pana Tadeusza and Nowa Nakielska by PHN. The projects will provide more than 600 apartments in Warsaw, Łódź, Kraków and Bydgoszcz.

PHN Group plans to intensify its investment program in the residential and warehouse development segments. The pipeline includes a cosy development in downtown Warsaw (Jana Pawła II 34) and the first stage of the development in Zielona Góra (Łężyca). In the coming years, further stages of the investment in Wrocław and Bydgoszcz are planned. PHN Group is also preparing single-family residential projects in Czerwonak and Bolechówek near Poznań. In the warehouse sector, PHN Group plans to implement more projects – under the JV formula in Zgorzelec and Pruszków, which will provide the market with more than 300,000 sqm of modern warehouse space.

Meanwhile, works continue on PHN Group’s new development strategy, which will involve greater focus on promising real estate segments, increasing the scale of operations, and developing new business lines, while shutting down operations in non-promising segments. Diversification will be key – rental (both in the office and warehouse areas), development activities, as well as general contracting activities will remain core operations. Given the ESG considerations, the new strategy will also provide for adapting the portfolio of existing properties to environmental requirements, mainly with respect to energy efficiency.

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ABOUT THE PHN GROUP

Polski Holding Nieruchomości S.A. is one of the largest groups in the Polish commercial property sector in terms of the market value of its portfolio. PHN Group has a diversified business profile – it is primarily active in the office, residential and logistics markets. PHN Group’s portfolio comprises more than 150 standalone properties with a market value of approx. PLN 3.5B. PHN Group provides comprehensive rental and management services – it currently manages more than 500,000 sqm of leasable space. PHN Group owns about 270 hectares of land earmarked for projects in various market segments. PHN Group is also active in the construction sector – by providing general contracting, subcontracting and design services, as well as in the development sector as an investor – by carrying out projects related to the construction and sale of residential units and the construction of commercial buildings. PHN Group’s main market is Poland. PHN’s activities in the rental segment are concentrated primarily in Warsaw and the largest regional cities, including the Tri-City, Poznań, Kraków, Katowice, Łódź and Wrocław. PHN has been listed on the Warsaw Stock Exchange since 13 February 2013.