BREF – Q2 2024 results – Rental revenues continue their rise, debt reduced

• Revenues from renting and managing properties have risen 30.4% to BGN 5.1mln. The period captures the increase in tenants for the newly available office space in Synergy Tower, as well as the rebound in the Business Park location when several tenants left at the end of 2022/beginning of 2023, but the available office space was soon lent out.
• The work to fully complete the office space in Synergy Tower continues
• Operating Expenses marked a slight decline of 6.4% YoY to BGN 2.3mln. This was possible due to changes in Value of Assets sold (BGN 0.329mln difference) and Other expenses (BGN 0.311mln difference).
• In the past year, total expenses decreased by 2.5% compared to the previous reporting period. The major driver was the abovementioned changes in Value of Assets Sold and Other expenses. Expenses associated to maintenance and repair of office areas increased 36% to nearly BGN 1.5mln in line with the greater amount of office space lent out. The account is expected to increase in the future as more contracts are signed, but that will be a proportionate increase.
• Expenses to the servicing company increased 14% to BGN 0.667mln as a result of the increased assets under management. Interest expense also increased 21.6% to BGN 0.49mln due to the increase in the interest of their loans to Eurobank by 0.9% in Q3 2023. Total exposure as of the end of Q2 is BGN 28.8mln.
• Net profit was BGN 2.4mln, reflecting a 65.1% increase compared to the previous year. The increase in rent and property management revenue played a major role here.
• Total assets grew YoY by 10.8%, while net debt decreased by 16.4%. Simultaneously, the company reduced its long-term debt significantly. The drop YoY was 20%, or BGN 5.8mln to reach BGN 23.8mln. In the same time, the decline in the last 6 months was 8.9%, or BGN 2.34mln.
• The decline in cash from BGN 10.3mln to BGN 3.6mln is explained by the continuing finishing works on the Synergy Tower project. The company expects that cash will be used further in the following trimesters for the same purpose and cash reserves will be further decreased.

Notable events:

• MSG Global Solutions Bulgaria – a 5 year agreement for 662.31 sqm at their Synergy Tower location. With that, total occupancy there stands at 55.79%.
• “Koderi” AD – a 5 year agreement for 273 sqm in Synergy Tower.
• C3I Europe EOOD – extended agreement for 1,545 sqm in Business Park Sofia till 31.10.2025.
• British Council – a 5 year agreement for 338.24 sqm in Business Park Sofia.
• Business Park Sofia occupancy reached 75.67%.

Full report can be downloaded here.