In 2022, One United Properties recorded a sales revenue growth of 9.4% YoY, an EBITDA decrease of 6.0%, and a net income of RON 502.6m, a 1.4% decrease YoY.
Starting off with the highlights from the year, One United Properties (the Group) sold 599 apartments with a total surface of 52,724 square meters (sqm), 978 parking spaces, and other unit types. Furthermore, early-stage apartments were sold and pre-sold for a total of EUR 169.2m in 2022. As a point of comparison, in 2021, the Group sold and pre-sold 699 apartments, with a total surface of 62,514 sqm, 995 parking spaces, and other unit types, as well as early-stage apartments for a total of EUR 255.8m.
The Group notes that the decrease in the number of units sold in 2022 compared to 2021 was a result of the lack of available stock throughout the year, due to significant delays from authorities in approving the building permits. They further note that this situation got resolved in Q4, as the Group received building permits for all the developments that were pending from the authorities. The Group notes that out of the developments permitted in Q4 2022, they started sales at One Mamaia Nord 2 in October 2022, One High District in November 2022, and One Floreasca Towers, also in November 2022. Because of this, 1,080 residential units were added to the sales team portfolio in Q4, of which 28% were already sold in less than a quarter.
By the end of the year, 62% of apartments under development were sold out. Also, the amount due under contracts concluded with customers by the end of the year amounted to EUR 231m of additional cash by 2025, of which EUR 170m in 2023, EUR 47m in 2024, and EUR 14m in 2025.
Moving on to the financial highlights, the consolidated revenue of the Group in 2022 increased by 4% YoY, amounting to RON 1.2bn. The growth in revenue was supported by a 9% increase in revenues from sales of residential property, which reached RON 769.5m. The rental income, which includes the revenue generated by the office and retail division, recorded an increase of 9x, amounting to RON 60.3m. The effect has been driven by revenues from tenants at One Tower (100% leased), One Cotroceni Park Phase 1 (87% leased), and One Victoriei Plaza (100% leased) as well as the impact of the results generated by Bucur Obor, consolidated under the retail division.
In 2022, the Group also recorded a decline of 78% in the gains from office buildings under development, due to the reclassification of One Cotroceni Park (Phase 1) to the completed investment property category. At the end of the year, the gain amounted to RON 67.1m, representing in principle the only development in progress in the office segment, One Cotroceni Park (Phase 2). On the other hand, the Group recorded a gain from a bargain purchase in the amount of RON 94.1m, representing a gain from the transaction of purchasing a majority stake in Bucur Obor, at a deeply discount price vs. the value of the buildings, as they were appraised by Colliers. Additionally, in 2022, the Group recorded RON 90.3m in gains from completed investment property, representing the development of rental residential investment properties, corresponding to rental apartments at One Mircea Eliade, in line with the strategy of the company to generate more long-term profit from rental income, as well as One Tower and OCP Phase 1 gains. Finally, the Group also recorded gains from investment property for further development, which amounted to RON 62.9m, representing an adjustment of fair value mostly due to obtaining construction permits in 2022.
Moving on to expenses, the G&A expenses increased by 206% YoY to RON 99.7m, driven by the larger scale of operations and the extraordinary event of recognizing the expense related to the Stock Option Plan in Q2 2022 to be granted to the executive members of the BoD, following the meeting of performance criteria set for 2021. The expense was recognized in Q2, Q3, and Q4 2022 with a total non-cash value of RON 46m. In terms of OPEX, they amounted to RON 15.5m, an increase of 92% YoY. Out of this amount, RON 7.3m are sponsorships related to CSR activities, which are expected to be generally deducted from the profit tax, while other items include expenses with provisions and allowance for impairment. Other property OPEX for the commercial segment doubled, while for the residential segment, it increased only slightly, by 2%.
This led to an EBITDA decrease of 6% YoY, amounting to RON 575.7m. This would imply an EBITDA margin of 74.82%, representing a decrease of 12.29 p.p. YoY. Finally, the net profit amounted to RON 502.6m, a 1.4% decrease YoY. This would also lead to a net profit margin of 65.31%, a 7.16 p.p. decrease YoY. The Group does note that in its main segment, the residential segment, the net profit amounted to RON 318.9m, an increase of 29% YoY.
One United Properties key financials (2022 vs. 2021, RONm)
Source: One United Properties, InterCapital Research
