In Q1 2023, One United Properties recorded a consolidated revenue growth of 26.5% YoY, an EBITDA decline of 16.1%, and a net income of RON 151.7m, a decrease of 8.8% YoY.
Starting off with the consolidated revenue, in total it amounted to RON 439.5m, an increase of 26.5% YoY. This category can be broken into the four largest categories: residential revenue, rental income, gain from bargain purchase, and gain from the completed investment property.
The largest of these categories, residential revenue, increased by 66.9% YoY and amounted to RON 329m. One further notes that in Q1 2023, they sold 220 apartments with a total surface of 18,490 sqm and 488 other parking spaces, and this figure includes both sales and pre-sales. As a point of comparison, they sold and pre-sold 120 apartments with a total surface of 9,811 sqm and 139 parking spaces in Q1 2022. They also noted that the large increase in the number of units sold in Q1 2023 came as a result of a larger and more diverse portfolio of residential units compared to Q1 2022. Furthermore, due to all the sales and pre-sales made, amounts due under contract with customers as of 31 March 2023 amounted to EUR 260m by 2025 (EUR 171m in 2023, EUR 53m in 2024, and EUR 36m in 2025).
Moving on to the 2nd most important revenue stream, rental income, it amounted to RON 31.5m in Q1 2023, an increase of over 2.6x YoY. The Company notes that this revenue came as a result of the entire portfolio performing, particularly at the largest developments. These include the following: One Tower (100% leased at the end of Q1 2023), One Cotroceni Park 1 (88% leased), One Victorei Plaza (100% leased), as well as the impact of Bucur Obor, which was consolidated under the retail division. They also note that this revenue should continue growing QoQ, as One Cotroceni Park 2 was delivered in Q1 (54% leased) but is still in the fit-out phase which should last throughout Q2 2023.
The Company also noted that in Q1 2023, they did not record any gain from bargain purchase, while in Q1 2022, they did, when they purchased a majority stake in Bucur Obor in the amount of RON 97m. On the other hand, gains from completed investment property were recorded, in the amount of RON 78.2m, an increase of 78.7% YoY. This came as a result of the reclassification of apartments for rental purposes (mainly from rental apartments at One Mircea Eliade and One Herastrau Towers) as well as the start of operations of the 2,000 sqm commercial space located within One Verdi Park.
One United Properties revenue composition (Q1 2023 vs. Q1 2022, RONm)
Source: One United Properties, InterCapital Research
Given its segmented revenue stream, the Company also provides us with segmented expenses. For the residential segment, the cost of sales, the main expense category amounted to RON 224.4m, a 98% increase YoY. This came as a result of increased construction activity and is expected for a Company of this type, the revenue and cost timelines are different due to the divergence between the cost of construction as well as the revenue from the sales of apartments in those developments. Other property OPEX meanwhile, increased by 69% YoY to RON 3.2m, due to several developments being finished and handed over to customers.
On the commercial side, the other property OPEX increased by only 2% YoY, amounting to RON 2.29m. Besides this, One United also records administrative expenses on a consolidated basis. These amounted to RON 18.5m, an increase of 84% YoY, mainly as a result of non-cash SOP allocation (excl. this effect, +22% YoY).
Moving on to EBITDA, it amounted to RON 178.4m, a 16% decrease YoY, but this came mainly as a result of the one-off purchase in Q1 2022 of Bucur Obor mentioned above. Excluding this effect, EBITDA increased 54% YoY. Finally, the net income of the Company amounted to RON 151.7m, a decrease of 8.9% YoY, but excl. the effect one-off effect of the purchase, it increased by 119% YoY.
One United Properties key financials (Q1 2023 vs. Q1 2022, RONm)
Source: One United Properties, InterCapital Research
Moving on to the balance sheet, the total assets increased by 7.2% YTD, and amounted to RON 4.54bn. This was driven by an increase in current and non-current assets, which grew by 10% and 5% YTD, respectively. The larger of these categories, non-current assets, amounted to RON 2.46bn, primarily driven by a 5% increase in investment properties by the end of Q1 2023, representing the increases in the commercial segment and the landbank. Several other developments also recorded an appreciation in value. Current assets meanwhile, increased to RON 2.1bn mainly due to a 27% increase in inventories (which includes the residential properties), which by itself reached RON 842.3m. The largest contribution to the inventory growth came from the addition of One Cotroceni Towers, as well as the appreciation/depreciation of other properties.
On the other hand, equity grew by 6% YTD, amounting to RON 2.7bn, driven by a 12% increase in retained earnings, as well as a 12% increase in other capital reserves. Finally, liabilities increased by 9% in Q1 2023, amounting to RON 1.9bn, mainly driven by a 12% increase in long-term liabilities, which by itself was driven by a 16% increase in loans and borrowings. In particular, this would primarily refer to a RON 737m loan taken, driven by the need for financing for One Athénée Plaza and One Cotroceni Park Office 2.
Also, One United Properties published a decision of the Board of Directors on the share capital increase. According to the report, the increase in the share capital will amount to RON 18.9m, by issuing 94,835,729 new shares with the nominal value of RON 0.2 per share. The subscription price meanwhile, will amount to RON 0.8701 per share, representing a premium of 3.35x over the nominal value, and 3.56% over the market share price before the approval of the share capital increase. The share capital increase will be used for the conversion of certain, liquid and due receivables held against the Company by beneficiaries of the share allocation plans already approved by the EGSM and OGSM. The ex-date for this share capital increase is 29 May 2023, while the payment date is set for 31 May 2023.
