• Net profit amounted to PLN 433.9 million, +161% year-on-year, driven by strong rental income growth and a revaluation gain on investment properties, while yields from the productive portfolio existing have generally remained unchanged
• The value of investment properties increased to PLN 4.2 billion, +25% compared to December 31, 2021
• NAV per share at 107.5 PLN, +26% compared to December 31, 2021
• Funds from operations (FFO) amounted to PLN 37.0 million, +43% YoY
• Annualized FFO for 2022 at PLN 74.0 million, +33% YoY
• Rental contracts at 1H2022 for approx. 214 thousand m², +91% yoy
• Strong growth in rental value of approx. 24% per year
• Net rental income increased by 22% year-on-year to PLN 90.4 million, supported by new rental income resulting from the completion of developments and the active management of the Group’s investment portfolio
• Respect ESG commitments, including the progress of the Group’s renewable energy strategy
• Strong tenant retention rate across the entire European portfolio at 99%
The Group’s financial position remains solid, as evidenced by its performance published in 1H2022. During the first six months of the year, the group’s net asset value (NAV) increased by 26%, reaching 2.3 billion zlotys. The value of its investment properties increased by 25% to more than PLN 4.2 billion. Consolidated turnover increased by 26% year-on-year to PLN 123.2 million. Net rental income, on the other hand, increased by 22% year-on-year to PLN 90.4 million. Operating profit increased by 181% to PLN 577.2 million. For the first half of this year, the MLP Group recorded a net profit of PLN 433.9 million, an improvement of more than 2.5 times (+161%) compared to the same period last year.
“We had a very successful first half despite a difficult economic and political environment. We achieved excellent results, both operationally and financially. During the period we signed rental contracts for 214,000 m², i.e. around 91% more than in 1H2021. It was our record rental ever. We are seeing increased demand for new and existing MLP Group warehouses across Europe, as businesses increasingly look for a cost-effective way to improve the resilience of their supply chains and manufacturing by outsourcing from Asia to Europe. Combined with the still limited supply of high-quality industrial assets, this factor has resulted in rental growth. The increase in rental rates of around 24% was well above the increase in construction costs, which also had a positive effect on the results of the MLP Group“, said Radosław T. Krochta, President and CEO, MLP Group SA
MLP Group operates in the Polish, German, Austrian and Romanian markets. It has a property portfolio of approximately 1.2 million m² of existing rental space, under construction and authorized ready to build. The Group currently operates 22 logistics parks in Poland and abroad. In addition, in 2022, it concluded several reservation agreements for new land to develop other logistics parks in Poland and Europe. Based on current land reserves and reserved plots (totalling around 200 ha), it has secured development potential for an additional 1 million m² of warehouse space.
“I use a number of sayings, one of which is widely attributed to Mark Twain – ‘history doesn’t repeat itself, but it does rhyme’. I predict that in the near future we will face an environment macroeconomic challenges such as the one we have experienced in economic downturns. However, as an MLP Group, we are well prepared for potential economic challenges. We have almost 100% of the surface area let, a very good diversification of tenants, both geographically and sectoral All our rental contracts are indexed to the European inflation rate, which means that any increase in inflation will lead to an automatic increase in our income All rents are denominated in EUR or are directly expressed in EUR, which which significantly reduces our exposure to currency risk Nearly 100% of our loans are IRS hedged for the next 5 years, resulting in limited interest rate exposure . Additionally, our focus on maintaining close relationships with our clients, our well-located land bank and our prudent capital structure provide significant opportunities for more profitable growth,” added Radosław T. Krochta.
The strategic objective is to continuously expand the warehouse portfolio by developing BigBox buildings and City Logistics projects. The MLP Group intends to continue to grow rapidly, especially in Germany, where it is steadily increasing its portfolio of projects mainly in the Ruhr region, the Hesse region and Brandenburg. It also plans to strengthen its presence in the Austrian market. In addition, it analyzes the entry into new countries, namely Benelux and Hungary. The Polish market remains very important for the Group, where it will constantly expand its offer in key logistics regions. In 2022, capital expenditure (CAPEX) will amount to approx. 150 to 200 million euros, of which approximately 30% will be allocated to the purchase of new plots.
The activities of the MLP group are particularly focused on the protection of the environment and the achievement of zero CO2 emissions by 2026. As part of existing and emerging installations, a project to build photovoltaic farms on the roofs of logistics parks is being implemented. The objective is to have 80% of the Group’s projects certified BREEAM at the Excellent or Very Good level, and to obtain DGNB Gold or Platinum certificates on the German and Austrian markets, by the end of 2022.
In line with its build & hold strategy, MLP Group retains completed logistics parks in its portfolio and manages them. All the projects carried out by MLP Group are distinguished by the very attractive locations of the logistics parks, the application of tailor-made solutions and the support of tenants for the duration of the lease.