Good morning, ladies and gentlemen, at the quarterly meeting with the representatives of the Management and Board of Atal S.A. Summary of results for Q3 2025, Q1 to Q3 . We have Zbigniew Juroszek here, CEO, and my name is Andrzej Biedronka-Tetla, I'm a member of the board for finance. We will obviously present it as usually, as you well know, in the order as usually. After the result, after Q3 2025, then after the presentation of the results, we will give you the floor to ask questions through the Q&A section. Today's transmission is translated into English. You can select interpretation at the bottom of the screen. Let us start with the presentation then. Summary of results for the first three quarters of 2025.
Obviously, the map that is well known to you at the beginning. Here you can see, our operations or the investments in programs, and in the pipelines we're present in 8 biggest cities in Poland, where we have 45 development undertakings, more than 9,100 flats. We have 39 investments planned for a similar number of flats. In most of those cities, on the right-hand side, you can see it, we have similar numbers of flats, in each of them more than 1,000 flats. Apart from Szczecin, which is a new branch, and also, but you are aware of this situation. And the most interesting probably topic in our presentation, sales of flats for the first three quarters. We have signed development contracts for 1,158 flats.
It's a drop as compared to the first three quarters of last year, but pay attention to the bottom diagram where we present quarterly sales. It's been in Q3 2025, it was 425 flats sold, so you can see a rising tendency in these quarters of this year, in consecutive quarters, and it's higher than in the similar period last year, when it was 354 flats. So we hope that these sales, this trend will be maintained. Offer, flats in offer. At the end of the thirtieth of September, we've completed some new investments, but in the offer we have—what we have now is 8,247 flats, which is more as compared to Q3 2024 and the end of the year, last year.
Quarterly, as you could see, due to some new investments being launched, we had more and more flats. Now, handovers. At the end of Q3, the results of handovers impacted revenues reported for Q3 2025. We handed over 652 flats, mainly in Wrocław, in Kraków, and in the Tri-City, but also in Łódź, a significant number of flats. Please note that 652 flats handed over in Q3 2025, it's half of all the handovers out of all the first three quarters of 2025. It's just so happened that the construction projects that are in progress, the schedule of their termination is envisaged, anticipated for the end of 2025, Q3, mainly Q4 of 2025.
1,262 flats altogether in this year, out of which about half of them were handed over in this last quarter, Q3. Here, handovers volume, you see a drop as compared to the previous year, but this is due to the schedule of termination of our construction projects, which was anticipated and planned. Most of those construction projects will terminate in Q4. As for handovers of flats and in thousands of square meters, it's 68, almost 69 thousand square meters of area handed over by the end of Q3 2025, versus 121.5 thousand in the similar period last year, end of Q3 2024.
So, but the average area of a flat handed over in 2025, in the first three quarters was 55 meters, and in the similar period last year, it was 60 meters, the average area. So our flats are smaller on average and hence the drop in the total area handed over. As for new land, by the end of September, we spent PLN 113 million, which will allow us to build 63,000 of the total sellable area. And we announced it a number of times, our land bank is quite diverse, so the purchases that we carried out were strictly to supplement our land bank. And we're not anticipating any major purchases in near future, unless there's a need to supplement our office.
So for the first three quarters, we purchased land in Kraków, Wrocław, Warszawa, Gdańsk, and the average price was 1,800 PLN per square meter of usable area of a flat. And our land bank of the entire group at the end of September this year allows us to carry out to build approximately 561,000 square meters land. Dividend has been paid in the amount of PLN 238 million. The dividend date was fifteenth of July, and it was paid out at the beginning of September. It was the amount of almost PLN 238 million, and from the beginning of our since our IPO, we have paid out almost 1.5 billion PLN of dividend.
Now, the potential of handovers in 2025, these are projects, as at the end of September 2025. Great investment. These are all those that have been granted the permit for use. This lighter gray have the occupancy permit in Q4. The dark gray have received it in Q3. And the white ones are projects in progress, and we hope that will be—they will, they are bound to be terminated in Q4, and we hope they'll be handed over in Q4. So the number, total number of flats is 3,815, out of which, more than 2,300 flats have been sold already.
So some were not handed over because they only received the occupancy permit at the end of Q3, so this takes a little bit longer to hand them over. As for potential of handover in 2026, we have a lot of going on, a lot of investments that you are aware of. We're planning to finalize 5,701 flats in this period, and we're planning to hand over most of them. As for potential of planned over, of planned project for 2027, we are planning 51 undertakings for more than 12,100 flats. Now, consolidating financial results. Revenues from sales of flats, it was amount of PLN 772 million, almost PLN 773 million.
It's smaller than the than the similar period of the previous year, which was explained by, before, the lower, a smaller number of handovers, because majority of the flats will be handed over next quarter. But gross margin, note, that on the right-hand side, the red bar, 31.2%, it's been gross margin of sale versus 27.4% in the similar period of the previous year. As for the net margin, it's been PLN 131.6 million versus PLN 254.84 million. So, and the net margin is at the level of 17%. It's smaller than in the similar period of the previous year, mainly due to financial costs.
So the discount of advance payment, of reversing the long-term prepayments that were revenues in that, in the previous, now they are reversed, and they are our financial costs. Out of PLN 160 million of prepayments, PLN 52 million were in the financial cost. In Q3 alone, it was PLN 18 million of prepayment discount. As for gross margin on sales by quarters, here, note Q3 is 28.4%, and profitability is a little bit smaller than in previous quarter, due to the mix of projects that are handed over now. But it's a margin above our expectations that we communicate at the level of the 25%, and it's much higher than in the previous years, by quarters. As for net margin by quarters, it's 19%.
That's a very good satisfactory level, and I should also note, coming back to the previous slide, you might wonder about an increase in financial revenues. It's a one-off settlement with the tax office, so it's a one-off event, but it obviously increases net profitability. As for the balance sheet, for reasons well known to us, increased number of constructions in 2025, we mainly have an increase in inventory and current assets to PLN 4,893 million, which is financed by long-term liabilities, mainly. Long and short-term liability, but I would like to note that we have mainly loans from Juroszek Holding, the main shareholder. According to the definitions of the emissions, the issuance regulations, the net ratio for the group is 0.23. Now, ongoing production and ready products.
Cash at a similar level, equity, a slight drop due to the high dividend payment, an increase in liabilities that strictly finance our production activities. And now some details on inventory in PLN 4.4 billion. We have work in progress, 3.424, but a significant number is flats that have been completed, finalized, but have not been handed over yet. Because, for instance, they were granted permits at the end of Q3, or that they need some finishing and it's prolonged the process. As for structure of debt in 2025, at the end of Q3, we had redeemable bonds at the level of PLN 260 million, and they were redeemed. Also, we issued bonds for PLN 2,200 million and loans, PLN 68 million. It's being prolonged.
We are at the level of loan decisions, and obviously, shareholders loans granted by the shareholder that will be prolonged for consecutive periods. As for the sources of financing, still mainly equity at the level of PLN 1.637 billion. Largest source of financing is over PLN 1 billion of loans granted by the shareholder. Prepayments from our customers, a significant amount, corporate bonds and bank loans. Now, as a summary, we started 10 new projects over the three quarters for 1,500 flats, and we completed 11 investments for 2,774 flats. So referring to the construction works, now we don't have them as many as in the previous years. We are aware of the inventory that we have and will be selling in consecutive periods.
We would like to be prepared for some better conditions on the market, and we'll be just launching selected products to supplement our offer only. So this is all the information that we wanted to share with you on a regular basis in the form of a presentation. Now, I would like to ask you to give the floor. Maybe before we go to Q&A, I will give the floor to Mr. Juroszek, the CEO, to comment on the current situation in Atal's Group, and then we'll ask you to ask questions.
Okay, welcome, everybody. Again, as for the current situation, you are following it. Regarding the interest rates, there will probably be some questions regarding that. We will definitely speak about that. It does have an impact on the market, but not as strong as the market anticipated.
I'm not going to say that we anticipated something more, but in general, we did expect more, better situation that translates on sales. But there is some more activity, specifically in creditworthiness, there are some changes, and it opens up a new group of customers. As for investment customers, all those kind of, like, deposits and they're quite attractive in terms of profits regarding net renting, but it's better, it's getting better. So we're hoping to get, regain some more investment customers. But creditworthiness is improving, interest rates are dropping, and I personally think that it will, that we'll still need about 0.5 percentage point to stimulate the market strongly. As for our company, we've made a kind of a shift.
We are terminating, finalizing a lot of our investments at the end of this quarter, at the beginning of the next quarter. We have contracted most of flats for later periods, apart maybe from Kraków. But in Katowice, in Poznań, we usually contract them at the later part of a year. It's usually 2, 3 months before ending a construction process, and it's happening. And as Andrzej has said, the pace of introducing new investments, of launching new investments, will be smaller as compared to the finalized number of construction works. We are planning to finalize more than a dozen more construction sites, so our expenses will be dropping, and they have been dropping in the last month. And as for launching new investments, there'll be only those of projects that will supplement our offer.
We are hoping for more sales in 2025 Q4, and it's happening. But as for a real good market, that's what we're hoping for in 2026. We are fully prepared. And let me also add that if you have a look at the company in terms of inventory and debt, which is and the loans granted by my holding company, the numbers seem large, but take note, there's an item that in the land bank, where all the land is purchased. It's not preliminary contracts. Some have building permits, some have designs ready. We have fixed 56,000 square meters of area. We have PLN 1.1 billion in actual land. We can either develop it or sell it. So we have so much assets that we want to use now, right? It was an offensive strategy.
We agree, it's partly, it's partly successful, not at the pace we, we would like it to be. There is an improvement, though the pace of the improvement is not sufficient. So much for the introduction. As for performance of investments, everything is on time. Some are before schedule. Budgets are as planned or slightly smaller. There are no big differences, obviously, but don't expect any huge drops on construction costs. These are small adjustments because contractors have very small margins, as well as materials producers. They have small margins, too, but nothing is growing here. We have small minor adjustments in some items, and we will perform everything as planned, and now we just need to sell as much as possible in the shortest time possible. That's our task for the next two, three quarters. So please move to the questions.
So let's take a minute break, and we'll be back after this time. We're back after the break. We have a lot of questions, so let's start. Obviously, those questions that are similar, I will skip some of them and consolidate them. Now, out of 5,701+, that will be completed in 2026, how many have been sold by the end of September this year? About 20%. More than 1,200. Well, almost. Now it's more than 1,200. So how many flats are you planning to hand over in 2025, and how many in 2026, assuming that the market situation will develop as expected? What we mentioned for 2025, we were planning to sell 2 to 200 and 2,000 to 200. It's quite realistic, but we will do more.
Well, 2,000 is definitely realistic. We're hoping for 2,100 flats, but obviously, it's not up to us. It depends on the buyers. We will have some days off in these last months of the year, but there is a potential of handing over the numbers that we announced. But 2,000 flats, that's for sure. As for 2026, about 3,200 flats. It seems quite realistic to us as well. What was the relatively high dynamics of cost of sales due to? Was it the matter of intensifying sales? Well, yes. We can expect they will be at a similar level. It's the result of the activities that you're asking for. What's the number? Well, this question has—we've had it. What's the realistic volume of handover in 2026, that we've answered.
Can you explain, are the operating revenues in Q3 2025 has increased in operating revenues in Q3 and increased financial revenues? It was the result of a one-off settlement with the tax office in terms of VAT and income tax for the previous years, so these are one-off situations that will not be recurrent. By the end of the year, are you planning to introduce new projects? Yes, we have launched some of them after the balance sheet. They were about to add one more. In general, there are three projects, two in Kraków, one in Poznań, for almost 412 flats for these last months of the year. That's planned. Are the PLN 9.6 million of other operating revenues? I've mentioned it. Thirteen point three, we've mentioned it. What's the part of inventory?
Finished flats that are not sold, but available in the offer. It's about 1,000 flats that we will be selling in consecutive periods. But please note that there's this changing tendency in sales. In general, flats are being sold very intensely at the end of construction projects or after they are finalized. So those projects, they may be assessed as not as good, but then after they're completed, the sales usually accelerate. So that's the trend. In October, did you sell more flats than in September? Well, we obviously cannot tell you because it's confidential, but we can tell you about anticipated sales results in Q4. We're assuming it's gonna be higher than in Q3. We're in the middle of it, of marketing activities and promoting activities. There's a lot going on, but we're assuming that the result should be higher than in the previous quarter.
What's the demand for flats in particular areas? Is Łódź like the weakest area and Katowice area? Yes, this tendency of sales of finished flats is stronger in those flats where the sales are a little bit poorer, like Łódź and Katowice, but in Kraków and in Warsaw, this phenomenon is not that significant. But this can change in our eight branches, our sales, and which is not that bad, it's good. Our supply is a little bit too high, but we're not launching any new projects, and next year it's gonna be more leveled. So it all. Yes, I agree with what you've included in the question, but time will level the situation. We're not launching more construction projects in Katowice and Łódź. It will level up. And what's the plan for Łódź and Katowice?
Well, in this quarter, that's gonna be decisive. It's not very important whether it's going to be 100 or 200. The tendency is important. Are we profitable? Can we sell the flats we provide to the customers, and are the sales growing? And they are. Did the law on prices affect your operations? It did not affect us at all, but about open prices, open information prices. It's socially important, but in terms of sales, with this access to information, if a customer is looking for a flat in a single city, they will go to see six, seven locations, and they will learn about all those prices. And with these open information about prices, the only thing is that they get information before without going there.
Now, on the occasion of Łódź and Katowice, I told you that we're not launching new investments and we'll be selling out. Katowice is a strong business city, and this business component was kind of latent, and now it's waking up. So we're hoping for more sales in 2026 without launching new projects. Now, are the sales at the level of 2000 flats, is it realistic? We've answered it. Now, due to relatively high indebtedness, are we expecting dividend payment in 2026? Well, as for increasing debt, as I mentioned, it increases mainly due to production activities, operations, and expenses related thereto, to finalize those investments. But these construction projects will be terminated in Q4 and in 2026, most of them.
So without launching new many new undertakings and have finalizing those undertakings that are being in progress, the debt will be decreasing. So revenues from sales of finished flats will balance out the expenses by half, probably sometime mid next year. So as for indebtedness. As for dividend payment, this will be the decision of the shareholders' meeting, but the dividend policy is in place. At least 80% of net profit, according to our dividend policy, should be paid out, but obviously, this is the competence of the general meeting of shareholders. What were the expenses for land in Atal's, and what are the plans for Q4 2025 and 2026? Where do you buy land? We mentioned it, PLN 113 million have been spent. We're not planning to buy more, only supplemental plots.
But apart from those cities where we have a lot of supply of our product, we will be supplementing land in those areas where we need to supplement the bank. We don't have any major expenses. We've purchased most of the land we planned. We have a strong land bank. So in the current situation, even assuming a better situation in 2026, this will be sufficient for us, this land bank, for the next 3-4 years. We will supplement it somehow, but not for a lot of money. Does the high offer of the company induce you to a more aggressive technique of sales? Well, these are socio-techniques of sales. We monitor the market on a current basis. You need to trust us, we know what we're doing.
In the next six months, are you anticipating a drop, stability, or increase in prices of flats? We're not planning an increase. We have a flat cost of production. We bought land at lower prices. We're in a good position here. Not a lot of land is introducing the market, so we should not anticipate any drops on prices, therefore, on land. But competition in sales does exist. This surge of sales it will probably drop radically, which is due to the fact that in 2025, from Q2, according to the statistics, this will probably result in a rebound in 2026. Will there be a rebound in prices? Promotions will probably sales will probably disappear. They'll expire, kind of.
So there might be some increases, but if you have a price, including sales, that is the average, gives you the average price, and that's it, then without sales, the market should be quite level, this quite even, quite fixed. A lot of questions regarding handovers. I'm not going to read them once again... What's the interest rate of loans from Juroszek Holding? It's the same as the market level, but it's provided in our financial statements. Next question has been answered. Target contracting level for years 2025 and 2026. We've had this question. A lot of questions, but a lot of them are similar, so that's why I'm skipping a lot of them, because they have been answered already. Is one of the reason for relatively small sales of flats, is it not too much of saleable area per room?
The other developers have flats that have 2-3 rooms that are smaller than those at Atal, but and they sell better. This is a valid remark, but remember that we had a tendency 2-3 years ago of a slightly growing, increasing area of flats. There was a different situation with. There was this 2% loan, and there were some announcements of 0% loans. One project, one government scheme was terminated, and the new one did not start. We were assuming that to some extent, this program, this scheme, would be launched. It's not like Poles need smaller flats, but they are forced to buy them now for the time being. But we're anticipating that in 2026, we're assuming those smaller flats. There are too many too-small flats built in Poland.
I know that life forces people, who are in need when they have a limit on some limited lending capacity. They buy it, but on the secondary market, most of flats are too small. People look for more flats, bigger flats, and I think this trend will return. And our assumption is, well, we have considered it and analyzed it. For now, the competition has sold more of smaller flats, probably, but we anticipate that it will be balanced now. Did you, were you asked to pay more tax on empty premises? Yes. Yes, there was one case. It has nothing to do with the judgment. We responded to it, the city did not respond, and other cities did not refer to it, and the judgment did not refer to this particular case.
Does the company see investment, institutional investment purchase interest? And does the company take into account PP, PRS transactions? Well, the level of deposits was so high, not to mention bonds, that the profitability was not quite high. So when this curve is changing, the profitability of bonds and deposits is dropping, but on the other hand, there's a lot of good product on the market, the profitability is shifting. We are somewhere near, but we still need half or one percentage point to restore profitability. We will see monitor customers that need flats with packet transactions, but slowly. Okay, this has been the last question. A lot of questions regarding sales, marketing, and handovers, but I decided that we answered all those questions, so...
But if we have not addressed any of these questions, so please. Now, one more? To 840. If you want to sell 2000 flats in the entire year, it means 840 in Q4. Is it feasible? Well, we don't know. Remember that a lot of flats have been booked, and they can be translated into sales, or they can be prolonged. The customer is not in a hurry yet at this moment, because the dropping interest rates, if there's no need, if somebody is not pressed for it, it's more profitable to wait since there's a tendency of decreasing interest rates. It's hard to see if we're going to do it all, but sales are increasing. We don't know if we'll reach 2000, but we'll be close to it.
How many booked do we have booked? 170, and they're shifted into sales contracts. They are against payment, these booked. Some developers actually recognize it as sales. I think it's the last question we've had. So thank you very much for today's meeting. If we have not answered any of the questions in enough details, please contact the Investor Relations department, and we will see you at the next meeting for the results for the entire year.