Good morning and welcome to One United Properties' conference call for presenting the Q1 2024 results. My name is Zuzanna Kurek, and I am Investor Relations Manager at One United Properties. I am joined in this call by Victor Căpitanu, Executive Board Member and Co-Founder of One United Properties, and Cosmin Samoilă, CFO at One United Properties. Before we begin, I would like to mention that this call is being recorded and that the recording of this call will be updated on One United Properties' website later today. As stated in the call invite, by joining this video conference you automatically and implicitly consented to being recorded. If you do not consent to being recorded, please leave this call. In terms of organizational aspects, let me present to you the setup of this call.
Firstly, we will share with you the financial and operational highlights of Q1 2024, which will be presented by our Co-Founder, Victor Căpitanu, our CFO, Cosmin Samoilă, as well as myself. During the presentation, feel free to type any of the questions you have for the management in the chat window, and we'll answer them during the Q&A. After the presentation is over, we will start the Q&A session. Please note that all the participants should be on mute. If you want to ask a question, please type it in the chat window. I will be moderating this session, and therefore, for the sake of those who will be rewatching the replay of this conference, I will be reading all the questions out loud before addressing them. Your questions today will be answered by Victor Căpitanu, Cosmin Samoilă, or myself.
Finally, I would like to mention that we might be making forward-looking statements today during this call regarding the future performance of One United Properties and that actual results may differ materially. We encourage you to review the disclaimer that we have included in the presentation, which you can now see on your screen. This disclaimer applies equally to all the statements made in today's call. Thank you all for your patience, and I would like to now kick off this call and invite you to watch the highlights of One United Properties' performance in Q1 2024.
Good morning. I'm Victor Căpitanu, Co-Founder of One United Properties. Today, I'm proud to discuss our achievements in the first quarter of 2024, a period marked by strong strategic management and solid financial performance. We continue to build on our strong foundation of innovation and excellence in real estate. In this year's first quarter, we posted a turnover of EUR 84.3 million, and our gross result reached EUR 37 million. The revenues in the residential segment saw an 8% decrease compared to the first quarter of 2023, to EUR 61.6 million. But what is more important is that the profits from our residential properties grew by 16% to EUR 24 million. This increase was primarily driven by the revenue recognition from our new development initiated in 2023, where we saw substantial construction progress and continued strong sales and presales.
Our net margin surged, moving from 30.8% in the first quarter of last year to 39% this year. This improvement reflects not only an increase in sales prices as our developments advanced, but also our strategic focus on maintaining a minimum net margin of 35% across our developments. In the commercial segment, revenues rose by 21% to EUR 7.7 million, generating stable earnings from our diversified asset portfolio. Turning to sales and product launches, we've had a vibrant start of the year. We successfully sold and presold 92 apartments, covering a total area of 10,618 sq m, along with 228 parking spaces. The sales generated EUR 57.1 million, reflecting the consistent demand for our properties, particularly in One Lake District, which remains our most sought-after development.
As of the end of March, 73% of our available units were sold, with EUR 310 million in amounts to be received by 2025 from contracts signed as of end of March. At One Capital Markets Day on April 4, we made an important announcement: our strategic expansion into the affordable premium housing segment. This quarter, we signed a Memorandum of Understanding for the acquisition of 21-hectare plot in Bucharest's 5th District, where we plan to develop approximately 5,000 residential units that will form a self-sustainable neighborhood. This development underscores our commitment to innovation and sustainable urban growth and pushes forward our mission to reshape our home, Bucharest. Lastly, on the commercial side, we strengthened our office portfolio with multiple lease extensions, covering a total area of 4,537 sq m within One Tower, enhancing our recurring revenue base on the long term.
These accomplishments set a strong foundation for the rest of 2024, aligning with our strategic goals and financial targets. We remained focused on expanding our portfolio, enhancing shareholder value, and maintaining our leadership in the local real estate market. Next, Cosmin Samoilă, our Chief Financial Officer, will provide a detailed analysis of our financial performance for this quarter.
Good morning and thank you for participating to our financial results presentation. We have closed another very good quarter for One United Properties, especially for our residential segment, where the net margin from sales of residential properties improved remarkably from 30.8% in Q1 2023 to 39% this quarter. This increase was anticipated and is driven by a strong development pipeline and according to our revenue recognition model, where the margin is recognized in line with the construction completion process. Consequently, in Q1 2024, there was a 16% increase recorded in net income from residential properties, up to EUR 24 million. On the commercial segment, the rental income also had a strong growth of 22% compared to the first quarter of last year, reaching EUR 6 million, as more and more leasable space is generating revenue. During Q1 2024, we recorded EUR 14.6 million gains from investment property fair value adjustment.
Although this represents a slight decrease from the first quarter of previous years, it reflects the ongoing appreciation of our core assets, including finalized apartments for rental and capital appreciation purposes at One Verdi Park and One Floreasca Vista, as well as the future Infineon campus in One Technology District. All in all, our consolidated turnover in Q1 2024 reached EUR 84.3 million, marking a slight decrease of 5% compared to Q1 2023. The administrative expenses decreased by 6% compared to the first quarter of last year to EUR 3.5 million, mainly due to lower stock option plan expense. The result from operating activities was particularly strong, showing an 8% increase up to EUR 39.2 million, in line with the substantial growth in net income from the residential segment and an increase in the rental income in the commercial segment.
The bottom line, net profit increased with 3% compared to Q1 of last year, reaching EUR 31.6 million. Turning to our balance sheet, total assets consolidated the value over EUR 1 billion, with non-current assets increasing 5% to EUR 599.1 million. This growth is primarily attributed to a 5% rise in investment properties, underscoring the successful incorporation of One Technology District into our land bank following finalization of the acquisition in this quarter. Current assets remain stable due to the strong sales and deliveries of completed units, as well as a strategic decision not to introduce new developments in the sales portfolio during this period. This allowed us to maximize sales at the development currently under construction, therefore driving the margin from residential sales significantly up.
Our cash position remains an important indicator for our business, and it remained robust at EUR 16.3 million, although it saw a temporary 19% decrease due to the dividend payouts and ongoing development activities across 9 developments in progress that have a total gross development value of over EUR 1.2 billion. Our liabilities decreased with 1%, improving the maturity structure with a 9% increase in long-term liabilities and a 15% reduction in current liabilities. Our gross loan-to-value ratio remained stable at 29%, showcasing our strong financial foundation and conservative leverage relative to the European market average that is around 40%. Thank you for your attention, and to further expand the broader strategic duration of our company and key corporate events, I am pleased to introduce Zuzanna Kurek, our Investor Relations Manager.
Good morning. It is my pleasure to share with you today not only our vision for the future but also the tangible strides we've made towards our long-term goals in the first months of 2024. On April 4th, during our Capital Markets Day, our management team laid out a strategic blueprint extending to 2030. This vision underpins our ambitious targets for growth, innovation product offerings, and expansion into new market segments. For those of you who couldn't join us, I encourage you to rewatch the recording and review the detailed presentation available online, which outlines these initiatives and our roadmap to achieving them. As part of our commitment to delivering shareholder returns, we paid a half-year dividend for 2023 on January 31st of this year, amounting to 0.01 RON per share.
Furthermore, in the recent General Shareholders' Meeting held on April 25th, our shareholders approved the second tranche of the 2023 dividend, totaling EUR 7.6 million, scheduled for payment on July 15, 2024. Together, these dividends represent a total payout of EUR 15.2 million for fiscal year 2023, underlining our stable and reliable dividend policy. Looking ahead, we are preparing for a significant corporate event: a share capital increase during which we intend to raise up to EUR 70 million. This capital injection will be used to finance our strategic expansion as presented during our Capital Markets Day, particularly our entry into the premium affordable housing market. This move will not only diversify our portfolio but also cater to a broader demographic, ensuring long-term sustainability and growth of our business model. The proposed increase will be done at a nominal value of 0.2 RON per share.
It is important to mention that more than half of the EUR 70 million has already been secured since it has been committed by our Co-Founders, Victor Căpitanu and Andrei Diaconescu, together with the Chairman of the Board, Claudio Cisullo, and Board Member Marius Diaconu, underscoring the Board's and Founders' commitment to our long-term strategy. I invite you all to join our upcoming General Meeting of Shareholders scheduled for May 28, where the share capital increase will be voted. As always, you will be able to join us in person or cast your votes online. As we gear for the upcoming share capital increase, we remain dedicated to enhancing shareholder value through strategic growth initiatives, prudent financial management, and transparent communication.
With these strategies set and actions underway, I'll turn it back over to Victor, who will summarize today's insights and share our vision for the future of One United Properties.
Thank you, Zuzanna. As we reflect on our achievements and challenges of this first quarter, we remain determined in our mission to deliver not only financial growth but also quality to our customers. Our journey this quarter reaffirms our commitment to sustainability, innovation, and strategic expansion. Looking ahead, we are prepared for exciting developments with several high-profile projects on the horizon. These include further advances into new market segments, such as affordable premium housing, which represents a significant growth opportunity for us. We are confidently facing the future, dedicated to delivering outstanding projects and enhancing value for our shareholders, the One community, and for Bucharest, which is quickly becoming one of the most attractive destinations in Europe for both business and leisure. Thank you once again for your trust and support. We look forward to another quarter of growth, innovation, and success.
This concludes the first part of our call. We will now open the floor for questions. If you have any questions, please type them in the chat window. We will be addressing all the questions in chronological order. Before we turn to chat, and I encourage you to put your questions there, we have received one question before starting this conference, and I will read it out loud and invite Victor to answer it. The question is as follows: How much of the units built in One Cotroceni Park, One Lake District, One Mircea Eliade, One Mamaia Nord, or other projects in your portfolio are owned by companies or foreign investment funds with which you are directly connected, such as CC@ONE Properties SA from Switzerland, CCT One from Luxembourg, ACC Investments?
Please specify what is the minimum and maximum transaction cost in relation to the square meter of the units sold, and what is the profit margin?
Good morning, everybody. Thank you for the question. Basically, we have only one fund like this, is CC@ ONE, and we made one transaction 2 years ago in 2021. The transaction was done in market prices. It represents less than 8% of the gross development value of One Cotroceni Park and One Lake District, and less than 5% of the turnover of the company. Also, in the press, it was reported that the transaction was 37 apartments. Actually, it was more apartments. So it was more smaller apartments. In the case of One Cotroceni Park, what is important is that last year we didn't have enough supply compared to demand. So we negotiated and we bought back a big part of those units, and we sold them to retail. So we made an extra margin on those.
This year, we bought some of the others in the first quarter, and we'll be buying the rest of the units sold in One Cotroceni Park to this fund this quarter, just because we don't have enough supply there compared to the demand. So basically, with this buyback, let's call it, we are making an extra margin for the company, which of course will be more than 30% return on equity per year. Otherwise, we wouldn't do it. Thank you for the question.
Thank you very much, Victor. I see we have now just received the first question. For the good organization of the conference, I kindly invite you, as soon as you have a question, to type it so we can have a good flow going from a question to question. Thank you. So the question is as follows. Regarding the share capital increase, since it was announced, the price dropped somewhat. Could you comment on what impact will it have on the price since the share capital increase is done at a nominal value of 0.2 RON as compared to the market price? Also, if you wouldn't mind, with One's low LTV ratio, is there a specific reason why debt wasn't used to finance the future operations? Thank you. I will invite Victor to address both of the questions, the share capital increase, and also the debt.
Thank you. On the share market price, what happened is that we had significant demand from investors, and we took this decision, which is very good for the long term but not so good for the short term, to instead of leaving them to buy from the market and of course to have an appreciation on the price of the company, we decided to take this money and to raise capital and to put it in the company. On the short term, it doesn't look good for the market price, but on the medium-long term, it will be much better for the strength of the company, for the balance sheet, and for the value of the company. So this is regarding the capital increase. Now, we are doing it at nominal value, so will be done especially for existing shareholders. But the rights of subscription will be tradable.
So in case an existing shareholder will not want to participate, they can sell the rights in the market price. Now, regarding the debt, we are, as you know from previous conferences, we are a bit more conservative as founders and as managers. So we don't try to overdo it with debt. We think this level around 30%, what we have today, is a reasonable good amount of debt. Also, we don't have so much short-term debt. It's very important that we put all our debt on long term and is paid all the time from the rental income. So most of the debt is back to back with our leasing contracts with our tenants. So in this case, the actual debt is even less. Going forward, we'll be using debt.
We even approved in the last capital increase a potential raise of bonds available for the next three years, but we'll never do it too much big level or too risky for the company. So we'll always use debt, but at a reasonable level. Thank you for the question.
Thank you very much, Victor. We have another question related also to the ABB, and the question is the following. Why was ABB sale done at price of 0.9 RON, and now SPO is done at RON 0.2, and 70% is already secured by Victor and Andrei? What is the reasoning behind this huge margin for them, and why is SPO not done at market price as usual? Again, I will invite Victor here to address the question.
Yes, of course. Thank you. So basically, when we did the ABB, we had demand in the market from local and international investors. In total, we had more than 60 investors that subscribed. And we had also from the U.S., from the U.K., from Europe, and also a lot from Romania. And the price was determined by the demand and supply. So unfortunately, the day just the night before, Israel invaded Gaza. So this affected the closing price. Probably without debt, the closing price would be higher. But that's like this is what happened. So this is how the price was set. Regarding the nominal value, this is not an advantage only for me and my partner, Andrei, but it's an advantage for all the shareholders of the company. So every shareholder, every existing shareholder of the company will have the advantage to subscribe but these preferential shares.
We did this for the advantage of the shareholders of the company. Thank you very much.
Thank you very much, Victor, for the answer. I now invite you to put your questions in the chat. We are going to wait for two minutes for the questions to come. Thank you very much.
We have a new question, Zuzanna.
We have received more of a comment, actually. It's a little odd that on one side you ask the shareholders to put money in the firm in the share capital increase, and on the other hand, you pay a small amount of profits as dividends. Why not retain all the profits in the balance sheet and not distribute any of the dividends? I will ask here Victor to comment on our dividend strategy.
Yes, I think this is also a legitimate question because as long as the company reinvests the money with a compounded rate of return on equity of more than 30% per year, it makes sense to reinvest all the money and not to give dividends. So it makes sense the comment or the question is very legitimate. On the other hand, historically, since we did our first capital raise in 2016-2017, our deal with the shareholders was to give a certain part of the profit as dividends, just for the more initial investors to have some yearly return, even if it's lower compared to other dividend yields on the market. On top of this, the remuneration for myself and for Andrei, the fixed remuneration is zero. So basically, the dividends are also a source of payment for ourselves.
So somehow we try to balance that, but our focus is to keep as much as possible in the company, not to miss the opportunities, at least as long as we have much more opportunities than we have equity available to implement it. As you know, Romania is growing quite fast these days. The potential is very significant for the upcoming 10 years or so, hopefully 20 years. So I think we'll be focusing a lot to seize these opportunities and to reinvest well most of the money. Our constant focus all the time is to increase the value of the company for our shareholders. So this is the idea. This is where I have most of my money. This is where my partner, Andrei, has most of his money. So our medium-long-term goal is just to maximize the value of the business.
Thank you very much for the question, Mihai.
Thank you. We have a next question. When you said that 70% in the SPO is already secured, did you mean the existing shareholders or only Victor and Andrei? I would like to state here, it was clear in the video. It is more than 50% that is secured, and it's secured by Victor Căpitanu, Andrei Diaconescu, Chairman of the Board Claudio Cisullo, and Board Member Marius Diaconu. Victor, I don't know if you'd like to also comment on this.
No, it is very good, Zuzanna. Thank you. I think what we can say is that the four of us, we own 60% of the company. So basically, 60% of the money are committed. And I'm sure all the other shareholders will participate because it's done at nominal value. So for sure, everybody will want to participate, to not want to miss this opportunity to reinvest in the company. Thank you.
The next question is also related to our dividend policy. Do you consider to increase the amount the dividends paid annually, at least with the inflation rate? Victor, I will invite you here to take this one.
I think maybe it makes sense. I didn't think about it before. I don't know if I will ask some more investors. Let's see if this makes sense for investors. I think we could do it. I will discuss this question within our Board of Directors. I will take feedback also from other investors to see if it makes sense. For me personally, it seems like not material, but if market considers it material, we could do it, of course.
Thank you, Victor. I see we do not have any further questions, but I propose we wait two more minutes until 11:30 A.M. So if you have any remaining questions for Victor Căpitanu or Cosmin Samoilă or myself, please type them right now in the meeting chat. Thank you.
Zuzanna, we have a new question. Do you take it, or shall I take it myself? Two questions.
Yes. Let me read them out. So the first question goes, there have been a lot of complaints regarding the timing of the ABB sale and the announcement of the trading update, lower apartment sales. How do you comment this?
Thank you for the question. It is very legitimate. I will explain first on the trading update. The trading update was very strong. The sales of apartments that we did in the first quarter this year was almost the same as the one that we did in the first quarter last year, which is our historical high. By far, the first quarter this year and the first quarter last year were our strongest first quarters ever. I think personally, ourselves and the team, we feel very happy of how the first quarter this year went. It shows good business activity for this year. This is the first one, the trading update. Regarding the timing of the ABB sale, I have to say, indeed, this was not ideal.
We were thinking initially to do it as a capital raise maybe towards the end of the year or next year. But we had demand from funds and from investors from the market. So we decided it is better to take the money when it is available, not in the future when we don't know exactly how the market will be. So we think we have taken a good decision for the company and the shareholders of the company for the medium-long term that we took the money from the table, how they say it, right away. So this way, we secured most of the capital increase. So we think, okay, the timing on the short term is not ideal. I'm aware of that. But I think for the medium-long term and for the value of the company, the decision is extremely good.
Thank you, Victor. The following question, do you consider to use the money from the share capital increase for any M&A to achieve faster growth?
It's also a good question, but we still have a lot of organic opportunities. I think we can bring more value for our shareholders with organic growth. I think for the time being, the money that we are raising this year will go straight into developments, probably mostly or all in Bucharest for the medium income and medium and upper income. We think on this segment, we have a significant growth potential, and we should just invest the equity directly in developments to achieve higher return on equity for the shareholders. Thank you.
Another question. Hi, if you could also comment on the mechanism of the preferential rights trading. Is there a market liquidity that would allow easy trading? I will take this. At the beginning, from our [side], we don't have experience in the trading of preferential rights. This is going to be for the first time because some of you probably remember we did have share capital increase already, SPO done in 2022, but at the time, the preferential rights were not traded. Recently, in the recent history, and I mean here a year and a half, there hasn't been a company on the main market that has had a share capital increase with the rights traded. Therefore, it is difficult for us to comment from the experience from the past, from what I saw in the market usually.
Naturally, the liquidity is higher in the first days, and it eases as closer we get to the subscription period. But of course, we don't know how it's going to be in this case. Victor, would you like to comment further on this?
Thank you, Zuzanna. I think it's very good what you said, and it's very true. So still, we are learning about it. We are committed to do what is better for the shareholders of the company. Our brokers also, they will make sure that they can find enough counterparties to provide liquidity for the easy trading of the rights. So I think the challenge will be that our brokers are prepared to provide enough liquidity for the rights. And we will be working on that, of course. Thank you very much.
Thank you, Victor. The next question is, that is true, the square meter price was high. Did the sale towards CC@ ONE help with the average price? What is the reason for this transaction? Thank you, Victor.
Yes. Thank you. I think this is a misunderstanding here. The sale that we did to CC@ ONE was done 2 years ago in One Cotroceni Park and One Lake District. As I mentioned, it was less than 5% of the turnover. So cannot help with anything materially on the company up or down. And the reason for this transaction at that moment, so this was done 2 years ago and decided 2.5 years ago, the reason was to finance basically those developments. So how we do, all our developments, we finance firstly through sales. So the cheapest money you can get to finance one of your developments are sales. After sales, you have, of course, bank finance. And after that, on the third category is the equity.
We try always when we develop a new project to use with priority sales, bank debt afterwards, and equity the last. I hope this is answering the question. Thank you.
Thank you, Victor. We just got another message directly with the question which goes, what percentage of SPO do you expect to happen in Phase II and at what price? Will this be guidance of new market share price? I will invite here Victor. SPO means the secondary public offering, so the transaction that the share capital increase basically that we have planned.
Yes, I think Zuzanna, do you want to answer this or shall I answer it?
I will begin. So as it was mentioned before, the share capital increase will be done at nominal value. So we have approximately 60% already committed from the existing shareholders. Considering the pricing of this share capital increase, we expect a vast majority or we expect a majority, let's say, a significant portion of the company's share capital to be subscribed in phase one. As some of you probably remember, it's a 30-day period to subscribe in stage one. We don't know how many shares, of course, are going to remain for stage two. Regarding the guidance of the new market share price, please consider that naturally, because the share price after this transaction is also going to adjust, meaning that you will have to look at the market capitalization.
This is, of course, a way to look at the value of the company, the market capitalization, not the share price, because the share price indeed is going to be adjusted to reflect this new capital entering the company. Of course, the guidance of the new market share price is going to be led by this mechanism. Of course, there will be an adjustment, but it doesn't mean that the shares are going to be worthless.
I know most of you know the mechanism, but I will explain it a bit more just to be sure. So basically, after the capital increase, the value of the company will increase with EUR 70 million. So the market cap of the company will increase with the EUR 70 million. But the number of shares will increase as well. So the new price of the share after the capital increase will be the existing market cap plus EUR 70 million divided by the new number of shares. Thank you very much.
The next question, in regard to the company revenues growth over the last three years, it's obvious that One United Properties has expanded quite a lot. But on the profitability side annually, the profit at the end of the year has been declining over the last three years. Therefore, many investors believe that One United Properties is not growing anymore. How do you comment on this perception? I will invite Victor to take this one.
Yes, this is also a very good question. The thing is that if you take out of the balance sheet only the revenue growth for the residential business, you will see that the profitability increased significantly for the residential business over the last three years. So it wasn't declining. It didn't stay flat. It increased significantly. If you look overall to the balance sheet, it's not the same, mainly because of the gains from development of rental property, which has been affected over the last three years of the increase in interest rates. So basically, because of the increase of the interest rates, it looks like the profitability is not growing. But in reality, the profitability from rental income has grown significantly. The profitability from residential business has grown significantly. So I think my advice would be to analyze the breakdown per business segments.
And this you will see the actual growth of the company and the potential. Thank you.
Thank you, Victor. The next question, do you have a figure regarding the rental revenue apartments you hold for rent, currently valued at RON 250 million in your books? Thank you.
Look, so we don't have the figure yet because most of these apartments are in the beginning. And also, the strategy is not to hold them long term. So the strategy is to rent them and on the medium term, let's say, to sell them. So if you look also in 2023, we sold a portfolio of rental apartments. So basically, the idea is we furnish them, we rent them, we operate them for a while, and after that, we are selling them. So basically, we don't expect this to be a long-term recurring revenue from rental of residential. And if you look to last year, we had a transaction that we reported in the annual report for 2023 where we sold a package of rented apartments in One Mircea Eliade. Why it's good to sell the rental apartments is because the yield of the rental apartments is very low.
So basically, we can recycle the equity in much more rewarding investments from the point of return on equity for the company. Thank you.
Thank you, Victor. I see we have exhausted all of the questions so far. So I would like to give you all two more minutes. If you have any remaining questions, please type them, and we will answer them right away before we conclude this call. We have another question. Do you have an approximation of how much below the office rentals are yielding the rental apartments? Thank you.
Thank you, Vlad. Until Cosmin will check the report because we published the exact yield in the report for last year. So Cosmin, if you can check the exact yield that we sold in 2023, the rented apartments in Mircea Eliade, I will tell you just indicatively to have a look. So basically, the office rental is yielding between 6%-7% for prime properties. If you looked in our report, we had a commercial space rented long term to Lidl that we sold even at a yield of 6% last year. I think even a bit less than 6%. But the apartments usually are traded at a yield of 4%-5%. Why is that? Because apartments are more desirable. And apartments also, they can be used for living not only as an investment revenue.
All the time, if you look historically, you'll have the yield for apartments 1%-2% lower than the yield for office properties. Cosmin, if you found the exact figure, I think it was 4.something if I remember right. Quite a low yield. I mean, it really made sense to sell them.
The yield on which we sold the apartments last year was 4.67%.
Yeah. This is quite low yield. I mean, it really makes sense to sell and reinvest the equity in higher yielding properties or in development. And the number of apartments that we have in the books for rental, do you have it right away, Cosmin, or is it difficult to get that?
It's around 70 apartments.
Around 70 apartments.
There are no further questions. There is one more question. How do you intend to use the equity you plan to raise? I will invite Victor here to talk a little bit about the strategy.
Of course. The equity that we are raising, we plan to invest it mainly in development of mixed-use and residential developments, mainly for targeting middle class, medium income, and medium to high income clients. So this is basically the plan in the nutshell. And most of the lands for these uses are already secured. I think all the lands are already secured. Even if they are not made public, they are secured and we have the lands where we can use this equity.
I see we have another question. In order to increase the return for all the shareholders, do you plan to do buyback and cancel those shares, decrease total number of shares? I will invite here Victor to address the question.
I think we did already buyback 2 times. I don't see big value on our market, to be honest. We'll analyze it again in the future and maybe we'll do it again in the future. But I think the biggest return for all the shareholders is if we make good investments, we make good profit out of those investments, good return on equity, and we are reinvesting those profits wisely. I think if we do that, this is the best return for the shareholders. Thank you.
Thank you very much. If there are no further questions, I believe we can conclude this call. Thank you all very much. But actually, we cannot conclude because I see another question just came in. The question is as following. Advances you get from your clients decrease for a few quarters in a row. Should we worry for this? Maybe I will invite Cosmin to address this question.
Yes, it's not a sign of worry. It's related to our revenue recognition policy that in the moment the construction advances, the advances from clients are turned into revenues from sales. So this is actually the sign that our constructions are progressing and we are recognizing more and more revenue in the profit and loss account.
I think also what is important to monitor, and I think this will be the last question, but for Marius, it's important to monitor the amounts that we have to receive from the contracts with clients that is registered off balance sheet. So basically, off balance sheet, you have to look how much money we have to receive from contracts signed with clients. And at the end of the first quarter this year, we had around EUR 310 million to receive this year and next year from signed contracts with clients. So I think this is the most important number that you have to consider when you look to the contracts with clients and to receivables. Thank you.
Thank you very much, Victor. As I mentioned earlier, we will be concluding this call. As you saw during the presentation video, we will be holding a general meeting of shareholders on May 28th. As always, we invite you to join us, be it in person or online. Other than that, the next results call, we're going to hold in August of this year after we publish the H1 2024 results. We hope to see you there as well. Thank you very much for your participation and your numerous questions. We look forward to seeing you soon.
Thank you for your attention, for participating, and I wish you enjoy the rest of the day.
Thank you very much. Have a great day. Bye-bye.