• Operating income reached PLN 185.7 million, +51% yoy, EUR 40.3 mn (+52% yoy).
• EBITDA without revaluation amounted to PLN 97.2 million (+63% vs 1H 2022), EUR 21.1 million (+64% vs 1H 2022);
• Value of investment properties PLN 4.3 billion (-3% vs 31 December 2022), EUR 963.1 million (+2% vs 31 December 2022);
• Net Assets Value (NAV) reached PLN 2,394.3 million (-4% vs 31 December 2022), EUR 538.0 million (+1% vs 31 December 2022);
• NAV per share PLN 99.8 (-4% vs 31 December 2022), EUR 22.4 (+1% vs 31 December 2022);
• FFO amounted to PLN 58.0 million (+57% vs 1H 2022), EUR 12.6 million (+58% vs 1H 2022);
• Net loss amounted to PLN -82.7 million (EUR -17.9 million);
• Lease agreements signed in 1H 2023 or in signing process by September 2023: approx. 161 thousand sqm;
• BREEM/DGNB: 85% of our portfolio to be certified with very good BREEM or DGNB equivalent by 3Q 2023.
‘In 1H 2023 we turned very conservative to face precarious/uncertain economy. Despite the challenging economic landscape, we delivered excellent results, both from an operational and financial point of view driven by strong leasing performance across Europe. We increased revenue and FFO (funds from operations) by more than 50% in the first half of the year – a very important indicator for us, demonstrating MLP Group’s immense potential and operational stability. The value of our investment properties reached PLN 4.3 billion (+2% in EUR, -3% in PLN). We have noticed that occupiers are taking longer to make final decisions – majority of the new deals in MLP Group will be concluded in 3Q and 4Q 2023,’ said Radosław T. Krochta, President of the MLP Group S.A. Management Board.
In 1H 2023, contracts were signed for more than 160 thousand sqm.
MLP Group is developing its operations in Poland, Germany, Austria and Romania. The Group’s existing portfolio comprises 21 logistics parks. Its strategic goal remains to expand the warehouse portfolio by developing big-box facilities and urban logistic projects. Lease agreements concluded in 1H 2023 or in signing process by September 2023 totalled approx. 161 thousand sqm. Because occupiers are taking longer to make final decisions, majority of the new deals will be concluded in 3Q and 4Q 2023. The industrial & logistics sector in Europe benefits from structural demand drivers, such as the need to further improve supply chains, increasing interest for the nearshoring and friend-shoring projects.
In 1H 2023 MLP Group started speculative development in Poland and Romania (108 thousand sqm of spec development in total). We leased in the construction stage already 26%, which reconfirms the robust demand for new space. In 1H 2023, MLP Group delivered a total of approx. 97 thousand sqm of new space. At the end of 1H 2023, the Group had 1.07 million sqm of completed area, with 97.4% occupancy across all our assets, and with approx. 122 thousand sqm under construction or in the pipeline. The average lease vault is 7 years, with the retention rate at 100%.
Solid financial standing drives achievement of goals
‘We benefit from a solid liquidity position to fund our growth ambitions. Considering the current geopolitical situation and high volatility in the economy, we are very well prepared for the current challenges. 100% of lease agreements are indexed with CPI for EUR without any cap (indexed once a year in February). All rentals are denominated in EUR or are directly expressed in EUR, which significantly reduces our exposure to the currency risk. Almost 80% of loans are hedged with IRS for the next 5 years, resulting in limited interest rates’ exposure. The greatest value is the potential of the secured plots, which enables rapid development in the coming years on European markets,’ notes Radosław T. Krochta.
MLP Group also maintains a strong cash-flow position. The loan to value ratio (LTV) in 1H 2023 was 35.7%, with the interest coverage ratio (ICR) at 3.0x. The Group had a long debt maturity ratio of 4.3 years. Funds from operations (FFO) amounted to PLN 58 million, up 57% year on year.
ESG investments attract tenants
MLP Group has maintained a consistent focus on investing in renewable energy projects. This sustainability strategy aligns with tenants’ expectations for improved energy security, lower cost of occupancy, and the ability to fulfil their own ESG ambitions. MLP Group has installed photovoltaic systems with a total capacity of 4.67 MWp, and plans to increase this to 6.46 MWp by year-end. The goal is to install a photovoltaic system on every building and treat it as a standard for constructing new properties.
Great potential for further growth
‘Occupier demand for warehouse space across all markets where we operate is robust. We are seeing strong demand from light industry tenants, reflecting the friend-shoring and near-shoring trend that is in line with MLP Group’s strategy. MLP Group replenishes its landbank on a continual basis. In the past period, we increased the expansion potential of MLP Poznań West and MLP Pruszków II. We are in the process of acquiring land for upcoming projects, MLP Berlin Spreenhagen and MLP Bieruń, and we anticipate finalising these transactions in the near future. In the second half of the year, in addition to a number of projects in Poland and Germany, we are set to initiate city logistics projects in Poznań, Łodź and Vienna. We continue our expansion in Germany, marked by consistent growth of our project portfolio. We plan to strengthen and expand our presence in the Ruhr area, Brandenburg and Hessen land. Further development on the German market is a key point of our strategy. In 2023, capital expenditure (CAPEX) will amount to approximately EUR 100–150 million, of which about 30% will be allocated to purchase of new plots. On a full-year basis, we plan to lease approximately 200–300 thousand sqm of new warehouse space,’ added Radosław T. Krochta.
In keeping with its build & hold strategy, MLP Group retains completed logistics parks in its portfolio and manages them. All projects undertaken by MLP Group are distinguished by very attractive locations of the logistics parks, application of built-to-suit solutions, and support given to tenants during the lease term.
