GTC with €24 mln Q1 net profit

WSE-listed real estate developer GTC had €24.1 million net profit in Q1, down by 25.2 percent y/y, but above €16.4 million consensus. Revenues amounted to €39.5 million, a 30.6 percent growth y/y. Operating profit amounted to €36.9 million, down by 14.4 percent y/y. “We achieved solid results in the first quarter of this year, improving our gross margin on rental activity by 23 percent and improving our FFO by 27 percent. However, the most important is that we managed to secure further growth, seizing the opportunity in the growing economy in Bulgaria and acquiring Mall of Sofia, which will appreciate value by taking advantage of fast-growing customer spending power. This acquisition is another step in reaching our mid to longer term NAV growth target,” said GTC CEO Thomas Kurzmann. At end-March, GTC assets portfolio was worth €1.98 billion compared with €1.95 at end-2017. During this quarter we benefitted from strong refinancing activity, which helped us to further improved the average interest rate in our portfolio to 2.7 percent. Based on moderate leverage and a good cash position we are able to reinforce our development activity as well as secure highly accretive asset acquisition. With the acquisition Mall of Sofia, we acquired €7.55 million in-place rent with less than €30 million equity, achieving 19 percent yield on equity invested. This will improve GTC’s profitability through an overall increase in EBIT while leveraging on existing local management platform and increase our FFO to provide for additional dividend capacity and fund further growth,” added Erez Boniel, GTC’s CFO.