MLP Group increased revenue by more than half

Key figures for the first half of 2023:

- Operating income was PLN 185.7 million, +51% YoY. 40.3 million (+52% YoY)
- EBITDA excluding revaluation: PLN 97.2 million (+63% vs. 1H 2022), €21.1 million (+64% vs. 1H 2022);
- Investment property value: PLN 4.3 billion (- 3% vs. December 31, 2022), €963.1 million (+ 2% vs. December 31, 2022);
- Net asset value (NAV): PLN 2,394.3 million (- 4% vs. December 31, 2022), €538.0 million (+ 1% vs. December 31, 2022);
- NAV per share: PLN 99.8 (- 4% vs. December 31, 2022), €22.4 (+ 1% vs. December 31, 2022);
- FFO: PLN 58.0 million (+ 57% vs. 1H 2022), €12.6 million (+ 58% vs. 1H 2022);
- Net loss: -£82.7 million (-€17.9 million);
- Leases signed in 1H 2023 or in the process of being signed by September 2023: approx. 161,000 sqm;
- BREEAM/DGNB certifications: by Q3 2023, 85% of the entire property portfolio will be certified at the Very Good level.

"In the first half of 2023, we took a very cautious approach in the face of economic uncertainty. Despite the challenging economic environment, we achieved excellent results both operationally and financially, mainly due to the effects of our property rental business across Europe. We increased revenues and FFO (funds from operations) by more than 50% in the first half of the year - a very important indicator for us, showing the very strong potential and also the operational stability of MLP Group. The value of our investment properties reached PLN 4.3 billion (up 2% in EUR, down -3% in PLN). We see that the process of making final decisions by tenants has lengthened - most of MLP Group's new deals will be concluded in Q3 and Q4 of 2023," - Radoslaw T. Krochta, CEO of MLP Group S.A., said.

Contracts for more than 160,000 sqm in the first half of this year.

MLP Group is expanding its operations in the Polish, German, Austrian and Romanian markets. The Group currently operates 21 logistics parks. The strategic goal remains to expand its warehouse offering through the development of big box buildings and city logistics projects. Leases concluded in the first half of this year or in the process of being signed through September totaled about 161,000 sqm. Due to the longer time for tenants to make final decisions, most leasing deals will be concluded in the last two quarters of the year. The industrial and logistics sector in Europe is benefiting from structural demand factors, such as the need to further improve supply chains, growing interest in nearshoring and friendshoring projects.

MLP Group launched speculative developments in the Polish and Romanian markets in the first half of this year, covering a total of more than 108,000 sqm of space. The construction phase has already leased 26% of the facilities under construction, confirming strong demand for new space. MLP Group delivered a total of approximately 97 thousand sqm of new space for occupancy in H1 2023. At the end of the past six months, the Group had 1.07 million sq. m. of finished space, with a 97.4% occupancy rate of all assets. Another nearly 122 thousand sqm was under construction and in the pipeline. The average duration of concluded leases is 7 years, and the retention rate reaches 100%.

Secure financial position promotes achievement of goals

"We are taking advantage of our solid liquidity position to finance ambitious development goals. Given the current geopolitical situation and high volatility in the economy, we are very well prepared for the current challenges. 100% of leases are indexed to the CPI for the EUR without any cap (once a year in February). All rents are denominated in EUR or are directly denominated in this currency, which significantly reduces our exposure to currency risk. Nearly 80% of loans are IRS hedged for the next 5 years, which protects us against interest rate changes. The greatest value is the potential of the secured plots of land, which enables rapid development in the coming years in European markets," Radoslaw T. Krochta stressed.

MLP Group also maintains a strong cash flow position. The loan-to-value (LTV) ratio was at 35.7% in H1 this year, and the interest coverage ratio was 3.0x ICR (interest coverage ratio). There was a long debt maturity of 4.3 years. FFO (from funds from operations), on the other hand, amounted to PLN 58 million, up 57% YoY.

ESG investments attract tenants

MLP Group is consistently implementing investments related to the use of renewable energy. The sustainability strategy coincides with tenants' demands for greater energy security, lower utility costs and the ability to meet their own ESG goals. MLP Group has already installed photovoltaic systems with a total capacity of 4.67 MWp, and aims to increase this to 6.46 MWp by the end of this year. The goal is to install panels on every building, which is considered standard for new construction.

Strong potential for further growth

"In all markets where we operate, tenant demand for warehouse space remains strong. We see strong demand from the light industrial sector, which is related to the trend of companies relocating back to the country of their headquarters (friend/nearshoring), which is in line with MLP Group's strategy. We are constantly replenishing our land bank. In the past period, we have increased the expansion potential of MLP Poznań West and MLP Pruszków II parks. We are in the process of purchasing plots of land for the new MLP Berlin Spreenhagen and MLP Bieruń projects, and these will be acquired in the near future. In the second half of the year, in addition to a number of projects in the Polish and German markets, we will launch city logistics projects in Poznań, Łódź and Vienna. We are continuing our development in Germany, where we are steadily increasing our portfolio of projects. We plan to strengthen and expand our presence in the Ruhr, Brandenburg and Hesse. Further development in the German market is a key point in our strategy. Capital expenditures (CAPEX) in 2023 will be around €100-150 million, of which about 30% will be used to purchase new land. We plan to lease around 200-300 thousand sqm of new warehouse space throughout the year," - Radoslaw T. Krochta added.

In accordance with its "build & hold" strategy, MLP Group keeps logistics parks in its portfolio after completion and manages them independently. All projects implemented by the Group are also distinguished by the very attractive location of logistics parks, the use of a built-to-suit solution and tenant support during the term of the lease.

source: press materials