Warimpex reduces losses

The company’s revenues from investment properties increased by over 400 pct from EUR 371,000 in Q1 2015 to EUR 1.9 mln this year, due to the completion and leasing of the Zeppelin office tower at Airportcity St. Petersburg and of the Erzsébet office building in Budapest. As a result, total revenues improved by 8 pct y-o-y to EUR 11.9 mln. Gross income from revenues also rose by 63 pct to roughly EUR 4 mln. However, the hotel sales concluded last year in Ekaterinburg and the resulting drop in the number of rooms led to a 7 pct decline in revenues in the hotel segment, to EUR 9.4 mln. EBITDA also fell from EUR 1.6 mln to EUR 0.8 mln due to exchange rate gains from operations in the pre-year period, while EBIT remained relatively stable at minus EUR 0.5 mln. The financial result including earnings from joint ventures climbed into positive territory, increasing from minus EUR 3.9 mln to plus EUR 0.1 mln. “The Russian economy remains in a slump and the ruble is still subject to major fluctuations, although it experienced a slight recovery in the first quarter of 2016. Conditions are not expected to stabilise until 2017. As announced at the end of 2015, we are already confident that the appreciation of the currency will allow us to make up non-cash foreign currency losses. Another point worth noting is that the first three months of the year are traditionally the weakest in terms of revenues for the hotel industry due to seasonal effects and are not representative of the development of revenues for the full year,” commented Franz Jurkowitsch, the CEO of Warimpex. The company has also announced that it has recently obtained a building permit for the development of a 26,000 sqm office building near the Andel’s hotel in Łódź. The start of project’s implementation will depend on tenant demand. In Kraków, meanwhile, Warimpex is working on the development of two office buildings. One is a 26,000 sqm office building to be built on a plot next to the Chopin Hotel, while the other is a building owned by Warimpex that is to be demolished and replaced by a new office building with app. 20,000 sqm. A 20,000 sqm car park is also under construction at Airportcity St. Petersburg. In May 2016, a long-term preliminary lease agreement with Gazprom was signed for the entire building. “Our goal for the 2016 financial year is to boost the earnings of our hotels across the portfolio, to cut interest expenses, and to move forward with our development projects. Once again, we plan to complete a number of transactions this year and we have signed a letter of intent for the sale of a hotel after the reporting period. The deal is expected to close in the middle of the year,” reveals Mr Jurkowitsch.