GuruFocus - Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- One United Properties SA (BSE:ONE) achieved a consolidated turnover of EUR 208.5 million in the first nine months of 2024, marking the second time surpassing the EUR 200 million threshold within the first three quarters.
- The company's equity increased by 7% and cash position grew by 47% since the beginning of the year, reflecting strong financial health.
- The residential segment showed a 12% increase in net income, driven by revenue recognition from developments started in 2022 and 2023.
- The company successfully raised over EUR 68 million in a recent share capital increase, with over 97% of rights subscribed, indicating strong market confidence.
- One United Properties SA (BSE:ONE) maintains a stable loan-to-value ratio of 30%, demonstrating effective financial management with minimal leverage.
- The decision to issue shares at nominal value was not fully understood by the market, contributing to a decline in share price.
- Revenues from residential property sales decreased by 7% year over year, reflecting challenges in the market.
- The group recorded a 42% decrease in gains from investment property fair value adjustments compared to the previous year.
- Operating activity results decreased by 10% year over year, primarily due to reduced gains from fair value adjustments.
- Construction works progressed slower than anticipated between April and July 2024, mainly due to delays in approving bank finance for some developments.
A: Cosmin Samoa, CFO, stated that the company collected EUR121 million from clients this year and expects to collect another EUR353 million by the end of 2026 from presale contracts. For cash outflows and land acquisitions, he directed to the financial statements for detailed figures.
Q: How much construction CapEx remains to be spent to complete and deliver the projects for which One United Properties has already sold and presold apartments?
A: Cosmin Samoa, CFO, mentioned that the company anticipates spending less cash on current construction projects compared to what it will receive from sales already contracted, which is below the EUR353 million expected to be cashed in over the next two years.
Q: Why were no revenues recognized for One Lake District Phase Two sales, despite construction commencing in Q3?
A: Cosmin Samoa, CFO, explained that the stage of completion is currently very low, making the recognized revenues immaterial at this moment. However, as construction progresses, more revenues and profits will be recognized.
Q: What was the impact of the change in taxation for new homes on client demand?
A: Cosmin Samoa, CFO, noted that the increase in the reduced VAT rate from 5% to 9% did not impact demand, as salary levels have increased more than the tax and apartment prices over the last year.
Q: Are you considering the sale of one or more commercial office buildings, such as One Tower and One Victory Plaza?
A: Victor Capitano, Executive Board Member, stated that the company is always looking for opportunities to dispose of rental assets and recycle equity into new developments. However, any sale would depend on market conditions and whether it is beneficial for the company and shareholders.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.