BREF 2023 Q3 review – Growth in operational revenues in Q3

• Total revenues were BGN 6.4mln, down from BGN 20.9mln in Q3 2022. The decline is attributable to the base effects of an outsized gain in Q2 2022 revenue, during which the company sold their Bricolage Varna property for BGN 13.3mln and a land plot in Mladost district in Sofia for BGN 685 th.
• After normalizing, revenue grew 3.8% to BGN 3.99mln YoY.
• As a result of the above disinvestments, operating expenses fell considerably (76.6%). This resulted also in a 45.7% decrease in expenses to the servicing company to BGN 879th and Other expenses dropping by 45.4% to reach BGN 582th.
• In the past six months, total expenses decreased by 73.4% compared to the previous reporting period. Again, this was mainly due to the sale of the Bricolage property. That also prompted the decrease in other accounts, such as Operational expenses of assets, expenses to the servicing company and other expenses.
• Net profit was BGN 2.2mln, reflecting a 57.8% decline compared to the previous year. Again, this is mainly due to base effects.
• Total assets grew YoY by 1.6%, while net debt decreased by 12%. The company reduced its long-term debt by 14.4%, or BGN 4.53mln to reach BGN 27.3mln.

Notable events:

• On 28.07.2023, BREF announced their signing of a rental agreement with private school “Canadian Bear” for the Kambani Green Office location. The rental agreement is for 10 years and the rented area is 1,889.25 sqm. The building reached 74.25% occupancy of its rentable area.
• Additionally, they signed a rental agreement with Kalever EOOD for their Business Park location. The rental agreement is for 3 years and the rented area is 255.49 sqm. The building’s occupancy reached 71.05% of rentable area.
• For their Synergy Tower location 3 new tenant agreements were reached:
• “Stage Coworking” OOD for 2,763.98 sqm for 10 years. The company expects that the tenant will be offering services to already existing tenants, as well as outside clients.
• “Bianor Holding” AD for 660.93 sqm for 5 years.
• INSAIT – extension to the existing rental agreement with 660.08 sqm for the booming IT and AI department of Sofia University.

The total occupancy of Synergy Tower after the new leases reached 51.82%.

• The rise in the main interest rates in the country resulted in an increase in the interest in their 2 investment loans from Eurobank, their servicing bank. Currently, both loans’ interest rate stands at 2.95%, the total outstanding principal is BGN 32.2mln (BGN 3.129mln and BGN 29.062mln) and both loans are serviced regularly.

Full report can be viewed here.