Good morning, and welcome to One United Properties conference call for presenting the preliminary 2025 results. My name is Zuzanna Kurek, and I'm Investor Relations Manager at One United Properties, and I am joined in this call by Victor Căpitanu, Executive Board Member and Co-founder of One United Properties, and Cosmin-Petru Sămoilă, CFO at One United Properties. Before we begin, I would like to mention that this call is being recorded and that the recording will be uploaded on our website later today. As stated in the call invite, by joining the video conference, you automatically and implicitly consent it to being recorded. If you do not consent to being recorded, please leave the call. In terms of organizational aspects, let me present to you the setup of the call.
Firstly, we'll share the financial and operational highlights from 2025, which will be presented by our co-founder, Victor Căpitanu, CFO Cosmin-Petru Sămoilă, as well as myself. During the presentation, feel free to type any of the questions you might have 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 are put on mute. If you want to ask a question, please type it in the chat window. I will be moderating the session, and therefore, for the sake of those who will be watching the replay of this teleconference, I will be reading all the questions out loud before addressing them. Your questions today will be answered by Victor Căpitanu, Cosmin-Petru Sămoilă or myself.
Please note that today's presentation is focusing only on the preliminary 2025 results, and therefore, we will not be answering any questions related to our 2026 budget or annual targets. Consequently, we kindly ask you to refrain from putting such questions forward during the call. We can, however, address general questions related to trends or structural changes to the market, including legislative changes and their impact on our business. Just as a note, One United Properties will publish the 2026 budget via current report later this month, around March 27th, ahead of our general meeting of shareholders scheduled for April 29th. I would like to mention that we might be making nonetheless forward-looking statements today during this call regarding future performance of One United Properties, and that the actual results may differ materially.
We encourage you to review the disclaimer that we have included in the presentation, which you can see now on the 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 Victor Căpitanu to share with you the key highlights of One United Properties performance in 2025. Victor.
Good morning and welcome to our results call for 2025. As you can see, we had turnover in 2025 similar to 2024. We managed this year to improve the discipline and to improve a bit on the costs and we managed to increase our profitability from the sales of apartments from residential property by 10% to RON 363 million. Also, we managed to improve the overall profitability of the company by 19%, the operational profitability to RON 572 million. The gross profit before tax, we managed to increase by 18% to RON 509 million, which is a bit over EUR 100 million.
Which by the way is the first year in which we managed to increase our profit in the last three years. The last two years, the profit has been slightly declining, this is the first year in the last three years that we finally managed to start increasing our yearly profitability. I wanted to break down here the our segments a bit more just to understand the scale that we are delivering this year. Basically, if you look to the residential segment, I broke down whatever we have under construction to see that most of it is delivered this year. This year we delivered residential units with more than EUR 1 billion Gross Development Value.
That sees around 2,800 units, more or less as much as we delivered in the last 13 years combined. Of course, estimated margin for this yearly delivery is EUR 358 million, around 35% margin. Some of it we recognized already, a good part of it will be recognized this year and next year. We have also some delivery under construction, some residential units under construction that will be de-delivered post 2026. Also this year we'll start a number of, we estimate around five new construction sites. In 2024 and 2025, we only started one new construction site. This year we want to ramp up starting new construction sites.
Although the number of units under construction will decrease by the end of this year, many others will come and will be under construction by the end of 2026. As you see, we have quite a good pipeline on the planning phase, EUR 2.3 billion in Gross Development Value and more than 10,000 units. And just to have dimension, we put also the estimated gross margin that we plan to make on this pipeline, more than EUR 800 million. Part of it, we will start this year. On the residential, as you see, the position is very, very strong. Also, on the investment property, we cannot complain about it.
This year we delivered three new income generating properties. We have Infineon Technologies is the headquarter of Infineon, the German chip manufacturer. We have One Gallery, which is the former Ford factory, the first in Eastern Europe, is also being delivered this year. We have also the Mondrian Hotel, so we expect by the end of this year to reach 200,000 square meters in Gross Leasable Area for investment property segment and with a value in the range of EUR 700 million. Also, our pipeline is strong. We have few other properties that we plan to start building and deliver over the next years.
We will do this based on how fast we can sign lease agreements, so we don't intend to build investment properties speculatively. We will grow this segment as we find tenants and long-term leases to secure our investments. As you know, we don't we are not really fond of building speculatively. We will take it as the demand will hold, we will develop this pipeline. Also we are now present in few other locations than Bucharest. As you know, we've we had an effort since we listed our company to expand our operations outside Bucharest in Romania, but also outside Romania.
This effort took some time, it seems this year it finally pays off. We managed to secure locations in besides Bucharest, Ilfov that we are, it's, let's say, our main market. We managed to secure more locations in Sibiu and Constanța. We will start developing them. We also estimate that we will secure locations in Iași and Ploiești and Brașov during 2026. We are looking very actively to the main cities of the country. How we plan to expand, we are looking for very good locations. We are looking very reliable landowner partner. We are not looking to invest equity in these locations.
The target is to find good land, good partner, and to leverage our brand and our track record in order to create value on those locations. Our plan is to invest minimal equity, but nevertheless to expand in some major cities around the country. In parallel, because we speak about expansion, it's good to know that we are very actively looking to develop also outside the country. We've been saying this for five years. Hopefully, maybe this year we manage to start also an operation outside Romania. Thank you very much. I will ask my colleague Cosmin to walk you in detail through the financial results.
Thank you, Victor. Good morning, everyone, thank you for participating to our call. Related to the financials, turnover mostly similar as last year. In the turnover we have included revenues from apartment sales of RON 1.73 million. Rental and tenant service revenues RON 164.6 million. Gains from fair value adjustments RON 166 million and also other operating income. Gross profit reached RON 509.3 million, 18% increase compared to previous year, and the net profit reached RON 425.8 million, 14% increase compared to 2024, and also very important, 8% over the budgeted net profit.
Related to the residential segment, the revenues from residential decreased with 6% to RON 1.73 billion. This is a reflection of the sales mix that we have properties in advanced stage of construction, but also some properties in the first part of the construction stages. Also, due to this, many developments nearing completion, the net income from residential property increased with 10% to RON 363.5 million. The fact that the construction in most of the properties is advancing resulted in the fact that the residential net margin segment improved to 33.9% in 2025 compared to 28.9% that was recorded in 2024.
This value reflects our minimum target in terms of margin, 35%. Related to the commercial segment, the rental income increased with 9%, reaching RON 164.6 million. This moderate increase, it's a reflection of the fact that the portfolio is stabilized. Lease rate, it's close to maximum, 97%, and 90% of the tenants are already moved in. Net rental income had a 5% increase to RON 107.6 million. Related to expenses, the administrative expenses have decreased this year 13% to RON 64.4 million. This decline is due to what we announced beginning of last year and during the year that we had the cost optimization program across the whole group.
Other operating expenses also decreased 14% to RON 15.6 million. Out of this, we have some sponsorships also that are deducted from the profit tax. The results from operating activity totaled RON 552.9 million, reflecting a 19% increase compared to the previous year. This increase is supported by the increase in net income from residential property, increase in net rental income, and also the increase in gains from fair value adjustments. Related to the cash position, we ended the year with RON 655 million, a 52% increase in the cash position compared to the previous year. This is a historical highest cash position of the company. Also the Loan-to-value was 36%, a slight increase compared to previous periods.
This reflects the use of debt to fund the expansion of the development in the residential sector and also of the assets in the income generating portfolio. Nevertheless, this LTV is still in the low range compared to other listed European real estate developers. Of course, this will ensure for the future also efficient capital allocation and financial flexibility for our future developments. Net debt was RON 895.3 million, only 14% from total assets. Total assets reached RON 6.6 billion at the end of December. Related to the cash inflows, as of December 31, we have cash inflows from contracts already signed with residential clients totaling EUR 353 million to cash in by 2028.
179 million euro in 2026, 120.6 million euro in 2027, and 54.2 million euro in 2028. Only in 2025, we collected 152.4 million euro. As mentioned, these amounts are all for units that are already pre-sold, and we have pre-sale agreements signed with clients covering all these amounts. Also you see the evolution in the last years starting 2021. Thank you, and I pass to my colleague, Zuzanna, to continue with the business updates.
Thank you very much, Cosmin. I have just three slides on the detailed evolution of our sales team performance. As we have seen also throughout 2025, the residential sales and pre-sales and the total surface sold and pre-sold has decreased. However, that was part of intentional strategy of the company to focus on selling the units in developments that were under construction in the course of 2025. That strategy has delivered, and it delivered as 18% increase in price per square meter sold.
In terms of top developments, we had for the third one in a row, for the third year in a row, One Lake District remains our best-selling development, followed by One High District, and the third bestseller of 2025 is One Academy Club with a very impressive performance. Within Q4, the sales were launched in end of November. Within Q4, our colleagues sold 80 units out of total of 160 units at that development. The fourth development continued to be One Lake Club, also similar to One Lake District and One High District, one of our best sellers in the course of last two years. Here we have a more detailed outline on our sales portfolio. What I would like to underline are three numbers.
We had 999 units available for sale at developments under construction. As of December 31st, that means 74% of our developments under construction were already pre-sold. Across developments that were delivered in the course of 2025, we have three developments, there are remaining 85 units available at those developments. We're talking about One Lake Club phase two, One North Lofts, and One Mamaia Nord phase two. In terms of developments that were already finalized, meaning finalized until the beginning of 2025, we only had 43 units and the total amount of EUR 45.8 million still available for sale.
That shows you our sales strategy in terms of focusing on pre-sales during the construction with very few limited high-value units remaining for clients once the development is finalized. In terms of commercial, we see a portfolio that is leased and pre-leased at the level of 97% for standing assets with 90% of tenants moved in as of the end of 2025. The headline rent was RON 29.1 million in 2025. That was a 4% increase year-on-year.
What is important is that our colleagues from the office development continue their very robust lease activity, and in the course of the year, they leased almost 14,000 sq m of office and retail spaces across the commercial portfolio and signed multiple lease extensions for the total area of 23,000 sq m. Now, this concludes the first part of our call. We will now open the floor for questions. If you have any question, please type it in the chat window. To give you some more time, we will first address the questions that were sent to us via email ahead of the teleconference. We actually have two questions. Please, please type your questions right now in the chat so we can be fluent in providing you the answers.
The first question is: How are sales going in January compared to last year, and how do you perceive 2026 will be in terms of apartment sales compared to 2025?
Okay. Thank you. Basically, there was a very important change in the law for real estate development in Romania. This was abruptly introduced in December. We call it the Nordis Law because this was introduced in the aftermath of the insolvency of this developer called Nordis. Actually is a law that plans to improve, let's say, the safety of the transactions for both the developers and the clients in the sector. This law, instead of being introduced with, let's say, three months or six months or 12 months notice, was introduced abruptly overnight. This will impact the whole residential market. And we estimate that it will take a few months to readjust the sector to the new conditions.
This affects, first of all, it affects the cash flow because you cannot make new sales and take down payments until you are aligned with the new procedure. It also affects sales. What we see, we see a disproportionate impact for smaller developers, but it will affect on the short term, the whole industry. This is the answer.
Thank you, Victor. Now I see we actually have a repeat also in the chat of a question related to Q4. The question is related to the abrupt decline in residential revenue, - 70% year-on-year and - 71% quarter-on-quarter, and the cost of sales in Q4. The question is related to what drove that? Because I'm reading also from the chat. Could you explain the main drivers behind this drop in Q4?
Yes. For Q4, the sales were good, but we did an analyze, which was a bit overdue from our part on the number of contracts that were not paying on time or they were too much slowly paying. We decided that it's more profitable for the company to cancel a quite number of contracts. We, we make, let's say, a bulk cancellation of the non-performing contracts in Q4. This, I think, had the effect on the performance in Q4. If, Cosmin, you would like to add something on this, from the how we registered in the accounting maybe or...
Yeah. Yes, indeed.
Thank you.
M ain driver that brought a lower profitability in Q4. The fact that from the analysis, we had some less performing contracts. We decided to release these units for better sales in order to improve further profitability rather than waiting clients to slowly pay these units. This was the effect.
The next question.
I think this impacted also this total contracts that we need to receive, Cosmin, no?
Of course, it impacted also the future cash flow from this. Nevertheless, the inflow was somehow compensated by new sales. The amount remained the same, but on the revenue recognition, then it was a backdrop due to these cancellations.
The next question is, based on the information in the preliminary report, it appears that you have either already submitted or are prepared to submit the public offer documentation to the ASF. Could you please provide an update on the current status? I see this is also a repeat for the following question. If there is a question related to the documentation, and if it was already submitted to the Financial Supervisory Authority.
Yes, this is, the public tender offer is coordinated by the chairman of the board and by the board. Basically, all communication is related with, to the public tender offer is done by the chairman of the board, so we'll not make any comments on that at this stage.
The next question is about what we discussed about the cancellations. With the cancellation of contracts, did ONE keep the already paid installments from clients? If so, which amount was kept by ONE?
This I don't know if we kept, anything. Cosmin, do you have this data?
It was based on the contractual arrangement. On some we kept, on some it was disbursed. It.
From case to case.
Contract to case to case. Yes.
Thank you. The next question. During the Q3 earnings call, you were highly optimistic about 2026. Given recent macroeconomic developments, how do you view the broader market climate and the outlook for 2026 now? Do you maintain the same level of optimism and ONE's projected performance for the upcoming year?
Look, thank you for the question. As we announced already, we plan to launch five new developments this year. One is in Sibiu, and four are in Bucharest. I think this shows that we are quite optimistic with the market despite of the existing challenges. We launched in the last quarter of last year One Academy Club. We've seen that the demand for our product is extremely robust because we've sold half of the entire development in the quarter. Basically, we know that if we launch new developments, we can sell much more. We just wanted to focus to make sure that we finish all the developments that we have, because we have a huge peak coming to delivery this year.
That's why we didn't launch new developments and new sales. We just wanted to make sure that we have everything under control. We are quite positive with this year. We are starting all these new developments. I've seen also, which I think is quite positive news, that after half a year of, let's say, harsh measures taken at the government level, the government managed to get an a budgetary accident for January, a surplus, which I think is quite a good achievement. We hope that this can lay good foundation also for the, at the macro level for the economy for 2026. Coming back to the apartments are in a structural deficit. The city of Bucharest grows quite fast. It grows like...
It grew like 10% per year over the last 10 years. Now also immigration reversed. We expect the growth to be even faster. Even if it grow only 10% per year next 10 years, this means 300,000 people over the next 10 years. Only the new people coming are 30,000 people per year, just with the current growth, without the effect of the reverse of immigration. The city of Bucharest alone is very, very strong and the demand is quite significant. We are quite positive of the demand of residentials.
Thank you, Victor. The next question, could you give us a brief update on the potential sale of One Tower?
Yes. On the potential sale of ONE Tower, the sale is not imminent, we didn't manage to be as advanced as to have a transaction coming immediately. We still want to sell the property. We still have at least one interested buyer at the price that we target. In the meantime, it's not so bad for the company because, you know, the property is generating almost RON 600,000 of net rent per month, around RON 7 million per year. Even the IRR for this is double digit. Even if we delay the sale of this property six months or one year, we don't believe this is bad for the company.
In an ideal world in which money would be readily available and the market would be more efficient, to be honest, personally, I wouldn't sell One Tower. For the market of Romania, we decide it is good to do it and to recycle the equity, we are still working on that.
Thank you. I see we just got a new question. Could you provide a brief overview of residential projects that will drive the major impact in 2026? I mean, what is the current physical completion status of your main construction sites? In terms of margin, what do you expect in 2026? Maybe I will go to the.
I don't know. This we need to take one by one or.
Yes. Maybe let's overview of the residential projects that will drive a major impact in 2026. I put back the slide with the residential developments under construction together with the estimated delivery date.
I think this, we have the data is public. I think we can send it or somehow.
Yes.
Cause I.
I think for the second question, the current physical completion status of your main construction site, I think that can be assumed looking at the estimated delivery. As you know, we updated quarter -on -quarter. You can see, on the slide that we have One Floreasca Towers and One Herăstrău Vista and One Athénée , with estimated delivery in Q1 of this year. That is, either ongoing or it's going to happen in March. It follows with the second quarter, we have One High District scheduled for Q2, and we continue, as well as, excuse me, One Lake Club Phase 1. As Victor said, it's a very busy year for us this year, a lot of deliveries. For Q3, we have One Lake District Phase 1.
Yes, these are the key developments I would say scheduled.
The question was also about the physical completion. Physical completion is very near to final. I mean, all of them are standing and look almost finalized, so we are working on just final works on most of them, because otherwise we cannot deliver it this year. The actual completion, the physical completion is almost realized for most of them.
In terms of the margin question, as I mentioned at the beginning, we kindly ask you to wait for the budget that we will provide at the end of this month. That will provide the general guidance in terms of the revenues per segment as well as overall profits that we'll target for this year. What I can restate is as we always do, with any development, we target a minimum gross margin of 35%. I hope, yes, this answered your question. I see we don't have any more questions in the chat, therefore, we can conclude this teleconference. I would like to mention three important dates. 27th of March, we will release the annual report of One United Properties.
This will be the audited 2025 numbers. On 29th of April, we will be hosting the annual general meeting of shareholders, and we look forward to seeing you face-to-face or online via e-vote solution. On 14th of May, we will be publishing the results for the first quarter of 2026, and we will host a teleconference on 15th of May. Therefore, we hope to see you all there. We wish you a great day ahead, and thank you all for joining us.
Thank you very much. Have a great day, everybody.
Thank you.