The positive trend from the first quarter continued for Warimpex Finanz- und Beteiligungs AG. On the one hand, operating activities developed well and had a positive impact on the result for the first half of 2016. On the other, the Russian rouble recovered further in the second quarter, offsetting part of the non-cash foreign currency losses posted in prior periods, and the International Monetary fund slightly upped its projections for economic growth in Russia in 2016 and 2017. We also made pleasing progress in our development activities.
Occupancy at the fully consolidated hotels rose while room rates remained stable. However, the reduction in the number of rooms that resulted from the sale of the two establishments in Ekaterinburg caused revenues from the Hotels segment to decline by 6 per cent to €24.2 million. Including the joint ventures on a proportionate basis, the NOP per available room declined by 6% in part due to the sale of the andel’s hotel in Berlin in July 2015 and in part due to the poorer performance of the two hotels in Paris, where the market has contracted following recent events. Revenues from office buildings rose. The completion and letting of the Zeppelin office tower at AIRPORTCITY St. Petersburg and of the Erzsébet office building in Budapest caused a €0.7 million increase in revenues from the rental of office properties to €4 million. This boosted total revenues by 4 per cent to €29 million. The gross income from revenues also improved by 25 per cent to €12.1 million.
EBITDA climbed from €5.9 million to €6.3 million, and EBIT improved from €-19.2 million to a positive €10,2 million. This was largely due to measurement gains of €7.9 million in our development projects. Because of non-cash foreign currency gains, the financial result pleasingly turned from a negative €3.4 million to plus €3.9 million. Interest costs decreased substantially from €11.8 million to €6.4 million. In addition to the reduction of loan obligations, this resulted from the arrangement of refinancing under better terms. All in all, this led to a profit of €12.3 million for the period, a marked improvement over the comparison period (1–6 2015: loss of €24.9 million).
“The first half of 2016 was a very encouraging period for us, our assets performed positively across the board, and we made good progress in our development projects and in transactions. The Russian economy is also recovering slowly but surely, which makes us optimistic about our endeavours,” summarised Warimpex’s CEO Franz Jurkowitsch.
In terms of development activities, a construction permit was issued in April for the office project near the andel’s hotel in Łódź with roughly 26,000m² of space. After the reporting date, the construction permit was issued for the project in Krakow, where an office building owned by Warimpex will be demolished to make way for a new building with around 12,000m² of space. Warimpex is also the owner of a development property next to the Chopin Hotel in Krakow, on which an office building with around 26,000m² of space is to be built. Planning for this project is under way. In Russia, construction of a multifunctional building with around 450 parking spaces and roughly 6,000m² of office and archive space was begun at AIRPORTCITY St. Petersburg at the beginning of the year. The entire building is already completely let out and is to be finished in the middle of 2017.
In terms of transactions, Warimpex sold its 50 % stake in the Parkur Tower office building in Warsaw to its joint venture partner in June. Warimpex also signed a letter of intent for the sale of a hotel to an international investor in May. The deal is expected to close in the second half of the year.
“We expect the current positive trend to continue in the second half of 2016. We intend to move forward with our current development projects in Poland and Russia, and to potentially initiate a further transaction in addition to the announced deal. At the same time, we are working to further improve the profitability of our hotels, to improve our financing conditions, and to repay or refinance expensive lines of credit. To this end, we will also place a focus on diversifying our portfolio in terms of markets and assets in future,” concluded Jurkowitsch.
