Good morning, ladies and gentlemen. We're starting the Summary of Results conference for the first half of 2025 for Atal Group, as usual, as every quarter. We have the CEO of Atal S.A., Zbigniew Juroszek, with us. Good morning. CFO, Andrzej Biedronka. Our conference is translated into English. To use the translation, please select the interpretation button at the bottom of the screen. As you all know, we will have three parts in this meeting. First, we will give a presentation to show you the summary of results for the first half of the year for Atal Group. Then, in the second part, Mr. Zbigniew Juroszek will comment on the current situation for Atal and on the market. And in the third part of our meeting, we will invite you to ask questions at the very end of the meeting.
So let's start with the presentation and with operating activities, as usual. As you are well aware, we have investments in eight branches of the Atal Group. Currently, all the dates and all the data, that's the data for the end of June. We had 52 undertakings at that point, the total number of 10,402 flats. We had 30 new planned investments for more than 10,000 flats. As for sales of flats, we will probably say more about it in the discussion part, but in the first half of 2025, we have sales at the level of 735 flats. The decrease, as we've mentioned a number of times, is due to those high interest rates that limited the possibilities of taking loans in the past. And our customers are usually those who take loans and buy flats for their own needs.
When you compare the quarters, in Q2 2025, we contracted 3,088 flats. As for our flats in offer, you know very well that we are building. We have a lot of ongoing undertakings, more than 50 construction projects, and here, most of them, they will be finalized in 2026. Therefore, the flats in offer and flats in construction, they increased up to 8,688 flats. As for handovers in the first half of the year, you obviously know the number is 610 flats in total that will allow us to report revenues at the level of 390 million PLN. And these are flats that were mainly handed over in Wrocław and in Łódź. As for handovers of flats in the first half of 2025, it was 610 flats, and this level is a decrease as compared to the first half of the previous year.
We did tell you about that this goes together and stems from the schedule of handovers and the schedule of finalization of construction projects. Most of the flats will be handed over in Q4. In Q1 and Q2, the numbers were lower, and the drop of handovers was by 50%, more or less. As for the total saleable area that we handed over in the first half, it was a drop by 54%, so the area was smaller than last year. As for new lands in this year or in the first half, 108 million PLN have been spent on buying new land, and we're estimating that this land will allow us. This is the land that was purchased until the end of June 2025. We can build 59,000 of total saleable area of flats.
In this half of the year, we purchased land in Kraków, Wrocław, Warsaw, and Gdańsk, and the average price of purchase of usable area of one square meter was still at a very good level, PLN 1,844 per square meter. And when we look at the end of June, 30th of June 2025, and the land that we have had for that day, we could build 552,000 square meters of flats. In the recent days, the Atal Group paid out the dividend. At the end of the dividend day was the 3rd of July, and the dividend was paid yesterday. And the dividend for 2024, that we shared with the shareholders, was PLN 238 million. As the amount of the total amount of dividend that has been paid since our IPO is PLN 1.447 billion. It was paid in every year apart from 2020, which was the COVID year.
As for the potential of handovers in 2025, these are projects under construction. As of 30th of June 2025, the dark gray projects are projects that are finalized. They are being handed over. Lighter gray, these are investments that are to be finalized in Q3 with the permit for use also. So there's 3,000, a small chance that 447 flats, that's the total number. Most of them will be handed over in Q3, but mainly in Q4 of 2025. As for the number of flats that have not been transferred, as of the balance sheet date, 30th of June, that's 638 flats. But those that have not been sold were 353. All of the remaining ones were sold already and are in the process of handing them over to the owners. And the potential handovers in 2026, we have quite a significant number of projects. Two slides, more than 6,000 flats.
Some of the projects will be finalized in 2026. Some were accelerated a little bit, and they will probably finalize in 2025. Two or three investments will contribute to the potential of 2025. For now, it's planned to finalize them in 2026, so they are displayed and included here. But during the next meeting, we will probably give you information on them being transferred to 2025 numbers. As for the total potential of handovers of the projects we're planning after 2027, that's 51 projects, 12,000 flats. And now, let's move on to the second part of the presentation, consolidated financial results for the Atal Group. And as I mentioned, 610 flats handed over to our purchasers translated into PLN 390 million of revenues, and the net gross result of sale is PLN 133 million also, even though there was a drop in revenue regarding the handed-over area. Revenues dropped by 44%.
As you remember, a drop in area handed over that's more than 50%, and the revenues dropped by a smaller amount by 44%, so that we increased the cost discipline because they dropped by 49%, and as a result, gross result of sales dropped by only 34%, so we have a record high margin of sale, which was more than 34%. Obviously, what you can see is stabilized cost of sales and general management costs, and operating results PLN 108 million. And financial cost, we finance most of it, but the cost is due mainly to a reversed accounting. Like the accounting items were like PLN 31 million regarding discounts and of the interest and cash loans, that's just PLN 7 million. Here, as you can see, a similar period in 2024, it was a period when we acknowledged it and when we included it in the accounting books.
The financial revenues, now we are reversing these items because the advance payments are shorter than the end of the year, so this is less than 12 months this period, so according to the International Financial Accounting Standards, we need to do reversed accounting regarding the discounts on advance payments that we receive from the customers, and therefore, the financial net result was PLN 57,495 net margin at the level of 14.7%. If you have a look at net quarterly margin for Q2, it was almost 16% of net margin, and gross margin for Q2, it was higher than in the first half of the year alone, and it was 35.4% in Q2, so this is record high. When you look at the financial results and the balance sheet, we obviously have more assets. They have increased due to inventory increases.
You will see on consecutive slides how they look like, and liabilities, what we have, mainly the liabilities that financed those assets and production of flats. We will break it down into details, but drop in equity due to the dividend that has been paid out since the resolution of the shareholders' meeting spoke about paying out the dividend of 240 million PLN, and here, obviously, equity is lowered at the balance sheet date, and the payment of dividend was paid out in September, so it's also included in liabilities, so it's kind of artificial, but it increases the liabilities by 240 million PLN, but that ratio is increasing because we have more and more construction sites. We have a huge number of undertakings ongoing that will be finalized mainly in next year, and it's 0.28%, the net debt ratio.
Now, more detailed information on the financial results and increase in inventory as compared to the previous year. We have PLN 4,215 million cash at the same level as last year, and the drop in equity at the cost of liabilities that have increased by PLN 240 million, which was the dividend that was paid out on the 3rd of September. And if you have a look at inventory in detail, PLN 4,215 million, this is mainly ongoing production, flats that are being constructed and that will be handed over in Q4 this year in 2026. And 3,912 finished products, that's PLN 300 million. More than half of them are flats sold. As a structure of debt maturity, as at 30th of June, we had PLN 72 million of bank loans that are mature in 2025, revolving credits mainly. PLN 200 million of loans granted by the shareholders mature as well.
After the balance sheet date, they were shifted to be repaid in 2026, and PLN 260 million of bonds that are to be redeemed this year. The current financing of the increase in inventory is at the side of the shareholder that finances the company's operations by granting loans. And the increase in the debt to the shareholder is visible here. Here, if we summarize the financial sources, these are mainly equity, but also apart from prepayment from customers, also loans granted by the shareholder, also bank loans and corporate bonds. And just to summarize, the number of construction projects, as you can see, in the first half of the year, we started seven projects encompassing 957 flats. We launched in sales and investments covering 1,738 flats, and we finalized nine investments, 1,403 flats. And now I will give the floor to Mr. Juroszek to comment on the current situation, and then we'll invite you to ask questions.
Okay, good morning, ladies and gentlemen. Once again, I would like to comment on what's probably the most interesting to you, the current sales situation, and also the number of our projects that are being carried out and will be sold and handed over in 2025 at the end of the year and 2026 at the beginning of the year. It's the current situation. It is being monitored on an ongoing basis, and we reported to you. It has been difficult from the beginning of the year, but we assumed that in the middle of the year we did shift to Q4 to 2025 and to the entire 2026. I'm speaking about sales. We wanted to shift those sales, hoping that this would give us a broader range of customers.
Obviously, like April, May, and June, it didn't make any point to fight for customers because it was involved bigger discounts. So it was better to wait for a moment when there would be more people wanting to buy flats. So now we come back to the current situation. According to what we expected, perhaps it's a little bit slower because we assumed that August would be the month that will start accelerating sales, but it only happened after mid-August. I think it was the time of summer holidays, but I think that was a contributing factor, but reservations started increasing. And in the last week of August and the first week of September, we can see there's an increase in interest. As for the numbers, the first numbers will show up in a week or two to see how much the sales have increased.
You see in the balance sheet how much we have sold. We need to review it carefully, even assuming that in September, October, November, December, it will be probably by about 50% or even to 100% higher than in the previous months. 2,000, this is the maximum challenge for us. It will be a little bit fewer flats than we assumed because we assumed it would be 2,300 or 500. These forecasts varied, but the most important thing is that as for the construction process, this is flawless. All the projects are being finalized as scheduled. Some projects that were to finalize in Q1 next year, since we have very good weather and good situation with the contractors, we will be trying to finalize them this year to make a bigger number of handovers. As for construction and organization, it all works fine.
Obviously, we have a huge supply planned for 2026, but we assume that first decisions of customers were postponed because everybody was waiting for the supportive scheme, government scheme. There were several proposals, but none of them was adopted. We need to accept it. Now these customers are kind of accumulated. If there's no program, customers will have to make decisions. Then there are the interest rates. Customers were waiting for lower interest rates. We don't see as many decreases in interest rates as we would like to, but we already see some decreases. People can have higher loans, and it costs less. There's a perspective that the cost of loan will be even decreasing even more. This settles down the customers. Those mental, psychological barriers are gone. Now we're talking about real supply and real sales.
The supply is bigger on the market than the demand, but it will be changing slowly because the number of projects launched is decreasing, and some more attractive in terms of price projects are being exhausted slowly. We think that the breakthrough will be like the end of October and beginning of November will give us a shift in the curve of sales towards bigger demand for flats. This excess will decrease or it will be even. As compared to the previous quarter, not a lot has changed in our strategy. Our strategy was to finalize all the projects that we started. There is no kind of excess that would be dangerous. We have 300 flats that are built, but not sold. Regarding the whole scale of our undertakings, operations, it is not a burden to us.
We're assuming that in Q4 and in Q1 of the next year, we'll have higher sales and there'll be more handovers of flats. And we assume that all those projections will improve. That's what we count on. I think that the current scenario that we see is pretty good. So, so much for the introduction, and then we will tell you more in response to your questions. So now we would like to invite you to ask questions in the Q&A. We are back after a short break. We start with the question: What percentage of flats are contracted among those that are to be handed over in 2025? In 2026, in 2025, the level is about 60%, but those investments that are being finalized and those projects we have contracting increasing at the very end of the year.
So this is a kind of a change as compared to previous years. As for 2026, it's about 20% the level of contracts. A request for the comment on the record high gross margin. What was it due to? Was it due to the mix of projects or lack of capitalization of interest? Well, we always capitalize them. This is our rule. So it's not like we do not do it in one quarter and we do it in other quarters. We capitalize all the interest in inventory and we updated the risk regarding the production of flats. I presented it in the previous slide, the seven million PLN of interest in financial costs. These are interests that do not finance the projects, but all the other interests are capitalized in the construction production.
As for the first part, the profitability of the gross margin, what was it due to in the first half of this year and what we anticipate for the next part of the year, of the second part of the year? You know that the cost discipline is maintained, contained, and the market is favorable in this respect, and construction costs were not increasing. And I told you that the drop in costs was quite higher. So the profitability of the projects mainly grows, but we all, so it was better than assumed, and the budgets show us bigger profitability on projects that we are to finalize in 2025. So this is almost certain, but also the projects for 2026, this is a similar situation. As for the second half of 2025, we are envisaging about 28%.
The budgets even show a little bit more, but we will see if it's not higher. What was the increase, decrease of the average price of a flat sold on average in the first half of 2025? If we look at the average price of a flat sold in the first half of 2025 as compared to the end of 2024, we can say that it's constant. It's like a drop by 30 złoty, maybe, but it's very close. We compare different flats, different locations, but we can say it's the same. It has not changed in gross amounts. What gross margin from sales and net margin for the company is the target for 2025 in the second half? What are the projects in plus that contribute and decrease the margin? Well, like I said, we're increasing the profitability as to what was assumed. We were assuming in the budget.
We usually assume some provisions for extra costs. When we know that the production is shortly to be finalized, we can give it up then. Now, in the second half of 2025, the amount of reverse discounts from advance payments from customers can also be close to PLN 30 million. It's an interesting question, but it's hard to answer it because it all depends on what kind of flats we sell, which flats will be bought by the customers. Will they be the ones that are to be sold within one year from the balance sheet date or more than one year, or are they, as the customers, going to pay advances, or will they use the 20 to 80 formula of payment? It all depends on what the customers select, what they choose.
I can also add that before that, the schedules were always the same, and there was a balance regarding the discounts. There was more balance regarding the discounts, but now when customers buy flats that are closer to finalization, so this element of financing is less than a year, there's no kind of balance as such. And if customers don't pay advances, there's no discount. It's a difficult question to answer, really, because it's just kind of fortune telling about what the customers will be willing to buy, which we cannot predict. How many flats is the company planning to introduce to the offer of sale in Q3 for 2025? It's not a lot. It's several hundred flats. At the beginning of 2026, it's not going to be a big number. We have all those accumulated. We shifted them. We postponed them.
Now there'll be a cycle to introduce very few flats just to supplement the offer. As for bigger injections of flats, end of 2026, 2027, and 2028. So these consecutive quarters will not have a lot of flats introduced to the offer. What the scale of funds that the company would like to use for land purchase in 2025, we have finalized it this year. There's just an amount of about PLN 10 million. It's to close one transaction. So yes, we've actually finalized spending money on land. Now the idea of Katowice was imposing tax that have not been handed over for the customer and before the notarial deed. After it's handed over, but before notarial deed, what about this idea and how can it affect the company? We've heard about it for a few days. They're based on legal analyses, not only ours, but various legal analyses.
It's a faulty interpretation because we produce flats. We get a building permit for flats. We build flats. We get a permit for use, first building permit, then permit for use, and then we get the permits for flats individually, so we are present as developers in the cycle, administrative cycle of flats, and it's not like it's transferred to somebody who rents those flats and commercializes them. Perhaps then it would be an issue, but if we sell them, it doesn't matter if we sell them sooner or later, so the interpretation of Katowice is faulty and we're not afraid of it. Are the costs of construction stable or increasing? They're not stable. In some places, there are some corrections. We can see there's quite a lot of margin for kind of discounts and rebates. We have good profitability because the costs of construction are very good.
The prices of land increasing? We don't see that. We actually see something quite opposite. If the crisis lasts for a quarter or two, not much changes on the market. And the situation since the beginning of 2024 is like two years almost, and we see projects from small and medium-sized developers that are reducing their resources. They're not introducing new offers. They're reducing their land offer, and they try to sell them. Prices vary. There are no huge drops because the situation was quite good on the market for quite a long time. So the motivation of the sellers is not very strong to correct the situation very significantly. But we can say that at times we can supplement the bank of land at average prices. Maybe not low prices, but they're not increasing these prices.
What will be the demand for the working capital for the second half of 2025? If you read the financial statements after the balance sheet date, we have taken some extra loans from the shareholder. We're assuming that there will be 300, maybe 400 million złoty, more of such loans. It will obviously depend on the inflows of funds. The company is in a process after some legal changes where the customers don't pay those funds on their own, but at the request of the bank. That's when they do it, and then banks withhold those funds. So this is not favorable. So additional loans to inject the working capital will depend on that. But according to our projections, it's going to be 300 or 400 million of loans granted by the shareholder.
We do realize that it is a high level of debt, but these are mainly loans from the shareholders. It's almost like equity, like in inverted commas, but we can kind of treat it almost like that. We have acknowledgment from the shareholder that he will be granting such loans, and we're not afraid of repayment of such loans because our cash flows and sales put us in a safe position regarding that, and we can return those loans based on the flats that are already sold. Maybe I will not give you the exact number, but this will be close to one billion złoty, and the flats that we will be selling, even at the average level of sales, these will be cash inflows at the level of at least two billion złoty.
We're actually estimating it's going to be more, so we are not worried about that. Just to supplement what has been said in the cycle of production of flats, it's enough if from October, November, several new investments are finalized, so expenses finish there, and new expense entries are not added to the curve of expenses. It will be changing at the end of October and beginning of November, and therefore the revenues as compared to expenses will be increasing. Now, the total amount of funds for purchase of land in 2025, it's going to be more than PLN 200 million? No, it's going to be about PLN 150 million, and we're not planning any more purchases of land. Should we expect dividend payment for 2025? It's not the question to us, but to the shareholders' meeting.
Historically, I showed you that the COVID year was the only year when we did not pay dividend for understandable reasons. We use 70%-100% of profit for dividend. It all depends on the number of flats handed over in October, November. If there are higher sales and handovers, we will have the same approach to dividend. One last question. In 2025, are you expecting to hand over 2,500,000 flats? As you remember, the plan was 2,400, but the plan is to hand over about 500 flats in Q3, a great number in Q4 also. It all depends on customers, obviously. We managed to do it time-wise, but we are prepared in Q to service all those flats. I've also mentioned three undertakings, three projects that might be finalized sooner than 2026, which might increase the potential of handovers for 2025.
Usually Q4, well, it usually has the biggest number of handovers. We tried to set the schedule so that November, we have those opportunities already because sometimes we plan something for December, but then there's Christmas period, and it already starts mid-December, so it makes things complicated. It's like customers often go on holiday or are not interested in that stuff. They're thinking about Christmas already. So we accelerated several construction works so that we can hand them over in November before the Christmas period. So the level of handovers, it's up to date. We're assuming that sales will be a little bit lower than we assumed because those May, June, July, August still are kind of a burden. But we assume that sales will be according to schedule at the end of the year, so we will increase the summer to 2,000.
And if handovers are to be scheduled and there are no delays here, it should be the same as what we published. And one in Q4 is one to 1,300 flats. And in 2026, is it realistic to hand over about 5,000 flats? It's a difficult question. We can assess the situation in 2025 because there was an accumulation of events, and we hope that we will rebound based on it. But in 2026, we're assuming the market will be much better. Supply will be dropping. Projects are being reduced, so it's happening now. If the economic situation of the customers is positive, it is realistic. But it's very difficult to refer to this question. I think it's a little bit too early. I think during the next conference, we'll be able to tell you more precisely. That was the last question. One last question.
In 2026, are you expecting to sell 3,000 flats? Yes. That's something we're not afraid of, the sales scenario, because with the offer we have and the corrected market, I think we can assume sales at this level. The previous question is more difficult regarding handovers in 2026 because it depends on many things.
Okay, I see no further questions. Thank you very much then for participating in the conference, and as usual, feel free to contact us for more details, and feel invited to join us for the conference after Q3. Good.