Globe Trade Centre S A : Q1 2024 GTC Group results Press release

Q1 2024 RESULTS

FAVOURABLE FIRST QUARTER PERFORMANCE LEADS TO IMPROVED KEY

METRICS, FITCH CONFIRMS BB+ RATING

REVENUES FROM	FFO I	NET LTV	OCCUPANCY	CASH/ CASH & ESCROW
RENTAL ACTIVITIES
€46M	€19M	48.1%	86%	€122M/€149M

Q1 2024 FINANCIAL HIGHLIGHTS

• Revenues from rental activity up 7% to €46m in Q1 2024 (€43m in Q1 2023); Like-for-likerental revenue growth of 7%
• Gross margin from rental activity up 9% to €32m in Q1 2024 (€30m in Q1 2023)
• FFO I at €19m in Q1 2024 (€16m in Q1 2023), FFO per share at €0.03
• EPRA NTA at €1,247m as of 31 March 2024 (€1,232m as of 31 December 2023)
  EPRA NTA per share at €2.17 (PLN 9.34)
• Net LTV at 48.1%1 (49.3%¹ as of 31 December
  2023); Net LTV adjusted for cash on escrow accounts at 47.0%
• Cash of €122m; cash on the escrow accounts of €27m.

Q1 2024 PORTFOLIO HIGHLIGHTS

• Occupancy at 86% as of 31 March 2024 (87% as of 31 December 2023)
• Leasing activity reached 19,000 sq m in Q1 2024 (24,300 sq m in Q1 2023)
• Average weighted lease term at 3.4 yrs.
• 87% of real estate portfolio is recurring income- producing
• 65% of recurring income-producing portfolio is office
• 92% of assets green certified

"We had a very good first quarter. Our revenues were again boosted by indexation and grew 7%. Our FFO also showed a significant growth and was, along-side the funds drawn under the new loan agreement, a positive driver for our comfortable cash position of EUR 122 million and a decrease in LTV to 48.1%." - commented Gyula Nagy, GTC's President of the

Management Board.

"We are closely monitoring debt capital markets and are pleased with their recovery reflected in several successful real estate exchange offers and new bonds issuances. Based on these positive tailwinds, we, together with our financial advisers, are working on a financing strategy to address the bond maturities in 2026. We are committed to stay at the debt capital market and therefore committed to keep our public rating which Fitch recently affirmed as BB+ stable," - added Nagy.

1 Includes non-current financial assets

1

OPERATING ACHIEVEMENTS IN Q1 2024

Office sector

Retail sector

• Occupancy at 83% as of 31 March 2024 (84% in December 2023)
• Average weighted lease term of 3.4 yrs. (3.5 yrs. in December 2023)
• Leasing activity reached 11,300 sq m in Q1 2024 (20,800 sq m in Q1 2023):

• 1. Prolongation of AHOP in Francuska Office Centre, Katowice (c. 1,800 sq m)
  1. Match Trade Technologies chose Pixel, Poznań (c. 1,300 sq m)
  1. Nickel Development chose Pixel, Poznań (c. 1,300 sq m)
  1. Prolongation of Arup lease in Korona Office Complex, Krakow (c. 900 sq m)
  1. Gyms4U chose Matrix C, Zagreb (c. 550 sq m)
  1. Prolongation of Takeda Pharma in Duna Tower, Budapest (c. 500 sq m)
• Occupancy at 96% as of 31 March 2024 (96% as of 31 December 2023)
• Average weighted lease term of 3.2 yrs. (3.5 yrs. in December 2023)
• Leasing activity reached 7,700 sq m in Q1 2024 (3,500 sq m in Q1 2023):
• 1. Prolongation of LC Waikiki in Ada Mall, Belgrade (c. 1,200 sq m)

1. Prolongation of LPP brands in Galeria Jurajska, Czestochowa (c. 1,200 sq m)

1. Prolongation of New Yorker in Galeria Jurajska, Czestochowa (c. 700 sq m) o Super Dr. Max chose Ada Mall, Belgrade (c. 600 sq m)
   o Prolongation of Douglas in Galeria Północna, Warsaw (c. 300 sq m)

FINANCIALS

Rental and service
revenues	• Up 7% to €46m in Q1 2024 as compared to €43m in Q1 2023
	The Group recognized an increase in rental revenues of €1.5 following the completion of
	GTC X in Belgrade, Rose Hill Business Campus in Budapest and Matrix C in Zagreb.
	The Group observed also an increase in an average rental rate following the indexation
	of its rental rates to the European CPI.
Gross margin from	• At €32m in Q1 2024 as compared to €30m in Q1 2023
operations	Mainly due to an increase in rental and service revenues partially offset by an increase
	in the service charge cost due to inflation.
Administrative expenses	• At €4.5m as compared to €3.9m in Q1 2023
	Mainly due to recognition of one-off payments related to the severance payments,
	an increase in remuneration fees and other advisory expenses.
Profit /(loss) from	• Loss of €6m as compared to €3m loss in Q1 2023
revaluation of	Loss in the three-month period ended 31 March 2024, is mainly a result of capitalized
investment properties
expenditures on completed buildings.

2

Financial expenses, net	• Financial expenses, net at €8.5m as compared to €7.6m in Q1 2023
	Average interest rate at 2.58%.
Tax	• Corporate income tax amounted to €3m as compared to €3m tax in Q1 2023
	Taxation consists mainly of €1.7m of current tax expenses and €1.5m of deferred tax.
Adjusted EBITDA and	• Adjusted EBITDA was at €27m (€24m in Q1 2023). Net profit amounted to €10m in
net profit /(loss)	Q1 2024 (€12m profit in Q1 2023). The decrease mainly resulted from the loss from
	revaluation.
Funds From Operations	• At €19m as compared to €16m in Q1 2023, FFO I per share at €0.03.
(FFO I)
Total investments and	• Total investments, including non-current financial assets, at €2,434m as of 31
GAV	March 2024 (€2,416m as of 31 December 2023) and GAV at €2,298m as of 31 March
	2024 (€2,281m as of 31 December 2023), mainly due to investments into assets under
	construction of €22m and recognized increase in the right-of-use (and corresponding
	increase in lease liabilities) due to new annual perpetual usufruct payments of €24m.
	This increase was partially offset by loss from revaluation related to investment
	properties of €6m.
EPRA NTA / share	• At €2.17 compared to €2.15 on 31 December 2023
	Corresponding to EPRA NTA of €1,247m compared to €1,232m as of 31 December
	2023.
Debt and debt related	• Debt at €1,319m compared to €1,274m as of 31 December 2023
indicators	Related mainly to proceeds from long-term borrowings (€56m) combined with foreign
	exchange differences on bonds denominated in HUF (€5m), compensated by
	repayments (€5m). Current portion of long-term debt increased due to reclassification
	of loan related to Galeria Jurajska due to upcoming maturity in Q1 2025.
	• Weighted average debt maturity of 3.6 years and average interest rate of 2.58%
	p.a.
	• Net LTV 48.1%2 (49.3%² on 31 December 2023). Net LTV adjusted for cash transferred
	to the escrow accounts at 47.0%.
	• Annualized consolidated coverage ratio (based on EBITDA) at 3.3x (3.4x as of
	31 December 2023)
	• Unsecured debt at 49% (52% as of 31 December 2023) and unencumbered
	properties at 41% (46% as of 31 December 2023)
Cash	• Cash balance of €122m as of 31 March 2024 (€60m as of 31 December 2023)
	The cash balance was increased partially due to acquisition of new long-term secured
	loan of €56m, net cash proceeds from operating activities of €27m and change in short-
	term deposits designated for bonds buy back of €12m, partially offset by expenditures
	on investment properties of €19m, interest paid in the amount of €7m and repayment of
	borrowings of €5m.

2 Includes non-current financial assets;

3

Annex 1 Consolidated Statement of Financial Position as of 31 March 2024

(in millions of euro)

		31 March 2024	31 December 2023
		unaudited	audited
ASSETS
Non-current assets
Investment property		2,311.8		2,273.4
Residential landbank		27.2		27.2
Property, plant and equipment		15.8		16.0
Blocked deposits		13.3		13.1
Deferred tax asset		2.2		1.8
Derivatives		2.4		2.3
Non-current financial assets measured		136.4		135.1
at fair value through profit or loss
Other non-current assets		0.2		0.2
Loan granted to non-controlling interest partner		11.7		11.6
		2,521.0		2,480.7
Current assets
Accounts receivables		16.6		15.7
VAT and other tax receivables		4.0		3.1
Income tax receivables		1.9		1.5
Prepayments and other receivables		32.3		52.4
Derivatives		10.3		11.9
Short-term blocked deposits		17.4		17.3
Cash and cash equivalents		122.5		60.4
Assets held for sale		13.6		13.6
		218.6	175.9
TOTAL ASSETS		2,739.6	2,656.6

4

Annex 1 Consolidated Statement of Financial Position as of 31 March 2024 (cont.)

(in millions of euro)

			31 December
	31 March 2024	2023
	unaudited		audited
EQUITY AND LIABILITIES
Equity attributable to equity holders of the Company
Share capital	12.9	12.9
Share premium	668.9	668.9
Capital reserve	(49.3)	(49.3)
Hedge reserve	(3.4)	0.7
Foreign currency translation reserve	(2.7)	(2.6)
Accumulated profit	480.6	471.3
	1,107.0		1,101.9
Non-controlling interest	24.8	24.3
Total Equity	1,131.8		1,126.2
Non-current liabilities
Long-term portion of borrowings	1,157.3	1,228.7
Lease liabilities	65.2	43.2
Deposits from tenants	13.3	13.1
Long term payables	5.8	5.2
Derivatives	27.5	18.7
Deferred tax liabilities	136.4	135.1
	1,405.5		1,444.0
Current liabilities
Current portion of borrowings	160.6	45.3
Trade payables and provisions	33.4	34.0
Deposits from tenants	2.2	2.4
VAT and other taxes payables	2.9	1.9
Income tax payables	2.8	2.4
Liabilities related to assets held for sale	0.4	0.4
	202.3	86.4
TOTAL EQUITY AND LIABILITIES	2,739.6	2,656.6

5

Annex 2 Consolidated Income Statement for the 3-month period ended 31 March 2024

(in millions of euro)

	Three-month period ended
	31 March
Unaudited	2024			2023
Rental revenue	34.3			31.1
Service charge revenue	11.4			11.6
Service charge costs	(13.5)			(13.1)
Gross margin from operations	32.2			29.6
Selling expenses	(0.6)			(0.6)
Administration expenses	(4.5)			(3.9)
Loss from revaluation	(5.7)			(3.0)
Other income				-
	0.2			-
Other expenses	(0.2)			(0.4)
Net operating profit	21.4			21.7
Foreign exchange differences	0.1			0.2
Finance income	0.8			0.2
Finance cost	(9.3)			(7.8)
Result before tax	13.0			14.3
Taxation	(3.2)			(2.7)
Result for the period	9.8			11.6
Attributable to:
Equity holders of the Parent Company	9.3			11.2
Non-controlling interest	0.5			0.4
Basic earnings per share (in Euro)	0.02			0.02

Annex 3 Consolidated Statement of Cash Flow for the 3-month period ended 31 March 2024

(in millions of euro)

	Three-month	Three-month
	period ended	period ended
	31 March 2024	31 March 2023
CASH FLOWS FROM OPERATING ACTIVITIES:			14.3
Result before tax	13.0
Adjustments for:
Loss/(profit) from revaluation	5.7		3.0
Foreign exchange differences	(0.1)		(0.2)
Finance income	(0.8)		(0.2)
Finance cost	9.3		7.8
Share based payment provision revaluation	-		(0.4)
Depreciation	0.3		0.1

Operating cash before working capital changes		27.4		24.4
Increase in accounts receivables and other current assets		(0.6)		(6.1)
Increase in deposits from tenants		-		0.8
	-
Increase / (decrease) in trade and other payables		1.3		1.7

Cash generated from operations	28.1	20.8
Tax paid in the period	(1.3)	(1.2)
Net cash from operating activities	26.8		19.6
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditure on investment property	(19.4)	(25.3)
Sale of completed assets	-	49.2
Change in short-term deposits designated for investment	12.2	-
Expenditure on non-current financial assets	-	(1.3)
VAT/tax on purchase/sale of investment property	(0.9)	1.6
Interests received	0.2	0.1
Net cash from/(used in) investing activities	(7.9)	24.3
CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from long-term borrowings

Repayment of long-term borrowings

Interest paid

Repayment of lease liability

Loan origination costs

Decrease/(increase) in short term deposits

Dividend paid to non-controlling interest

Net cash from/(used in) financing activities

Net foreign exchange difference, related to cash and cash equivalents

55.9	-
(4.8)	(5.5)
(6.5)	(4.7)
(0.7)	(0.6)
(0.4)	-
(0.3)	(0.1)
-	(0.9)
43.2		(11.8)
-	(0.1)

Net change in cash and cash equivalents	62.1	32.0
Cash and cash equivalents at the beginning of the period	60.4	115.1
Cash and cash equivalents at the end of the period	122.5	147.1

About GTC

The GTC Group is a leading real estate investor and developer focusing on Poland and capital cities in Central and Eastern Europe. During nearly 30 years of its activity, GTC has developed 82 high standard, modern office and retail properties with a total area of 1.4 million sq. m through Central and Eastern Europe.

GTC now actively manages a commercial real estate portfolio of 46 commercial buildings providing ca. 755 ths. sq m of lettable office and retail space in Poland, Hungary, Bucharest, Belgrade, Zagreb and Sofia. In addition, GTC has a development pipeline of approx. 500 ths. sq m retail and office properties in capital cities of Central and Eastern Europe, 51 ths. sq m under construction.

GTC S.A. is listed on the Warsaw Stock Exchange and inward listed on the Johannesburg Stock Exchange.

For further information:

Małgorzata Czaplicka

Globe Trade Centre S.A.

M.: [phone]

e-mail:[e-mail]

Alicja Lewandowska-Wolińska

Hill & Knowlton

M.: [phone]

e-mail:[e-mail]