Earnings Call: Q2 2026

Sep 14, 2026

Summary

H1 revenue reached PLN 760.172m and net income exceeded PLN 162m, alongside 1,547 contracted flats. Management expects 3,200–3,500 FY handovers and continued sales momentum, while flagging construction-cost and permitting risks.

Good morning, ladies and gentlemen. We are starting a summary of results for the first half of 2026 for the Atal Group. You can use the interpretation. As usually, as every quarter, we are welcoming you together with CEO Zbigniew Juroszek, and my name is Andrzej Biedronka-Tetla. I am the CFO. As usually, we will start with a presentation that I am going to present very briefly for the first half of Atal activities, for the first half of this year. Then we will ask Prezes Juroszek to comment on the current situation in Atal, and then after a brief break, we will have a Q&A session. Let us start with the presentation as usually, and let us summarize the results of the Atal Group in terms of its operational activities. At the end of June 2026, Atal had 43 undertakings in progress for 8,701 flats. We are planning 41 more investments for 9,516 flats. We are trying to distribute these land undertakings, lands constructions evenly, more or less. You know very well where we are present. In some cities, our presence is bigger, in some it is smaller, but we are trying to make sure that the investments and the land and the flats that we can sell, that they are sufficient for specific areas. This slide does not include the transaction of purchase of land in Budner Group. It took place on the 1st of July this year. If you follow the communications we published, we purchased land plus some shares in companies that own land, and this will allow us to build in Tricity about 70,000 sq m of total saleable area. It is not included here because it was after the balance sheet date. It was already the second half of 2026. As for sales of flats, we are very happy to announce that we have an increase in contracting in 2026, H1. The contracts, development contracts signed, because we only report preliminary and development contracts, so hard sales only. These sales are 1,547 flats in the entire first half of 2026. It is a significant increase as compared to the first half of the previous year. It is almost as high as total sales for the entire year 2025. If you have a look at these bars, there is a growing trend quarter-to-quarter where the contracting of the flats from, actually from the first quarter of 2025, it has been growing every quarter, as you can see. In the second quarter of 2026, we signed 908 development and preliminary contracts. These are the results that we had two, almost three years ago, actually, last time. As our offer and the number of flats offered at the end of Q2 2026, it dropped to almost 7,500 flats. This drop resulted from the increasing contracting and increased sales in the first half of 2026. So, the number of investments entered in our offer is smaller as a result of that. As for handovers in the first half of 2026, corresponding to the revenues that we reported in that period, in the entire first half of 2026, we handed over 1,013 flats, mainly in the Upper Silesian metropolitan area, but also in the Tricity and in Łódź and Wrocław, which translated into our revenues of 2026. These handovers were distributed more or less evenly quarter-to-quarter. If we compare these handovers to the revenues or handovers from 2025, from the first half of 2025, you can see there is also a significant decrease by 66%, 610 last year in the first half, this year 1,013 flats. As you remember, this second half should have more handovers because we are planning more than 2,000 flats to be handed over in the second half of this year. So it is quite ambitious, but this number of investments and undertakings, development undertakings is carried out at a sufficient scale to have these increased handovers. As for total saleable area in thousands of square meters, this increase is even higher, so by 89%, we handed over not only more flats, but also bigger flats, because 89% versus 66% increase in terms of the number of flats. You can see they are also bigger. Now, land. This red bar shows purchase of land for PLN 54 million, 30,000 square meters of flats. Wrocław, Katowice, Gdańsk mainly. The average price of purchase of a usable square meter of area was 1,802 PLN per square meter of usable area of flats. As I mentioned before, we have not reported in this diagram, we are not showing the purchase of shares from the Budner Group and the land that we are planning to purchase. For PLN 130 million, we are going to purchase 70,000 square meters of total saleable area. So if we include this acquisition, this purchase into account, which happened already at the beginning of the second half, this would be about 100,000 meters in total. As the dividend, the general meeting of shareholders decided to pay out dividend of the profit of Atal Group in the amount of PLN 194.7 million, which represents 88% of net result of Atal. Since our IPO, we have paid out PLN 1 billion 642 million. Now, we have a lot of projects on two screens, potential of handover. The gray ones are projects that terminated with a permit for use. In the first quarter, you can see there are six of these dark gray items. The consecutive items are those that are finalized, but where we are still waiting for the permit, occupancy permit. So we will be handing them over soon. Those in white are the projects that we are waiting to be finalized and for the permit to be issued in third, fourth quarters of 2026. There is quite a large number of these projects. Most perform according to schedules. If there are some delays, they are very minor, and therefore, we may assume that these handovers will be quite numerous this year. Like I said before at previous conferences, this number of 3,200 or 300 flats seems to be not endangered. So it is just a matter of handing them over to owners. As for potential of handover in 2027, there is quite a lot of undertakings, development undertakings. In 2027, we are going to finalize undertakings where more than 3,577 flats will be obviously selling flats already built in 2026. They will be sold in 2027. Yet, as you know, we keep saying that most of the flats we sell are in those investments that are finalized already. So the number of handovers will be increasing in consecutive years. As for the potential of planned projects and after 2028, constructions that we either started this year or are planning to launch in the coming years, we have 47 investments for 10,903 flats. We are not including this Budner Group transaction here. As you remember, it is 70,000 additional square meters of total saleable area in the Tricity. Now, consolidated financial results. Let us start from profit and loss account, consolidated financial results, an increase in handovers in the first Handovers, an increase by 95% in revenues from sale of products to PLN 760-172 million. Gross result of sales is PLN 215,968 million. That is the gross margin of sales for the first half of 2026 is 33%, and the net result is more than PLN 162 million, is an increase by 182%, and the net margin in the first half of this year was 21.3%. Obviously, we are paying attention to the decreasing financial costs as compared to the similar period of the same year, and this is the cost of debt, but mainly lower costs of discount of advance payments that we receive from our customers. This discount does not actually affect our operations, financial operations very much in this profit and loss account, opposite to the previous year. As for comparing the gross margin on sales by quarters, the second quarter of this year was 35.6%, so it was more than a year ago because it was Sorry, than in the first quarter, which was 29.4%. As you remember, in the first slide, the entire first half of this year was 33%. As you can see, the red bar here is the margin that stems out of is quite significant as compared to previous quarters. Actually, similar to only comparable to second quarter of last year. Net margin by quarter is 24% for the second quarter versus 17.6% for the first quarter, and net margin for the first half of the year altogether was 31.3%. As for the balance sheet, the balance sheet sum increased to PLN 5 billion 546, almost million, due to an increase in assets where construction is ongoing all the time, and therefore this increase in construction operations is visible. On consecutive slides, I will perhaps show you inventory in specific items. Also, in current assets, there is an increase due to cash increases. I will discuss it in a moment. As for total liabilities, an increase, that is the result of the issuance of bonds in the amount of PLN 160 million. It was done on the last of June, 30th June 2026, so it was the last day of the balance sheet period. So it increased these liabilities, and also the dividend that was Like, the resolution of the general meeting of shareholders on the dividend payment resulted in removing it from the equity and reclassifying it as liabilities. Hence, almost PLN 200 million. So this is an increase in liabilities at the end of June 2026. Obviously, we include cash and debt. Net debt ratio for the group was 0.2 as of 30th of June. Key items in the financial results. Inventory, PLN 4 billion 627 million, so a little bit more than at the end of 2025. Cash in assets increased from PLN 146 at the end of 2025. It increased to PLN 500 million at the end of first half of 2026. We mentioned also the issuance of bonds that I mentioned it affects cash. Liabilities increased due to issuance of bonds, but also recognition of the dividend as liabilities in the financial results. It was requalified. Inventory, an increase from PLN 4 billion 438 million last year. It is due to work in progress, which at the end of Q2 2026, it was PLN 3 billion 769. It is outlays for work in progress. Finished products drops to 850 at the end. At the end of Q1, it was 996. We are selling those flats faster than increasing the number of flats from work in progress. We announced that it would be huge production that will be like work in progress, translating into bigger number of flats, but they are being sold quite fast. As for structure of debt maturity, like I said, end of June, issuance of bonds. Well, this, yeah, we only have loans granted by the shareholder. We pay them back consistently if only we have a chance, we do that. We have PLN 300 million to repay. We will be trying to repay them, but we also have, like I always say it, we have the assurance of the shareholder of further support for the Atal Group. The main items to be sold are most of these debts will mature in 2027, PLN 747 million. These are loans granted by the shareholders that are going to be mature in 2027, plus 281 bank loans and 130 in bonds that we issued in the previous period. In June, they will be mature in 2028 and 2029. As for our business financing sources, the sources that stem from our financial liabilities, like from customers, like equity, you can see that. These are mainly, that is almost PLN 1.7 billion of equity. Also prepayments from customers and even higher loans granted by the shareholders and some, to a minor degree, bonds and even minor degree bank loans. To summarize the presentation, this, I think, shows very well the second quarter and the entire first half of this year. We started five new projects for 968 flats. We launched sales for five investments for 772 flats. In the same period, we have finalized the construction of 14 investments with more than 3,000 flats. As you can see, a lot of these investments have already been finalized, and they will be translating into increasing handovers in the second half of this year and in consecutive periods. They will be generating and translating into higher revenues from sales. Yes, now a comment from our CEO. Welcome once again. First of all, I would like to comment on the current sales situation, because taking into account the fact that in every conference, there is the biggest number of questions regarding that, but we will be answering other questions as well. As for current sales, we show that 908 flats in the second quarter. Third quarter is almost about to close, so we will have another conference soon. What we can say is that the level of sales will be similar to what we have in for Q2. We have some data already, and we know about the flat reservations, flats booked. In third, fourth quarter, we want to approach 1,000 flats. It all comes together to a picture which we started. Two years ago, we started changing our model of operation, which aimed mainly towards running more investments simultaneously and selling finalized flats in majority. It works fine, actually. It all works fine, what we anticipated. We already shared this with you. We were hoping for one quarter sooner for these results to come, but they have appeared, these results. We're moving according to this model, and we're aiming at presenting the biggest number of finalized flats to the customers, or almost finalized, which will present this competitive advantage of our offer. There's no magic in it, but if we take price per quality ratio, we can see it very well on finished products. For every customer, for all customers who have different levels of knowledge on the matter, they can evaluate it. Preliminarily, people use the same tools, commercial visualizations, and so on and so forth. At the level when we only have a hole in the ground, every construction looks the same. It's a huge struggle. We need to struggle with words, and now we want to compete with words, and now we prefer to compete with actions. We have a higher standard of our works and of our construction sites than average. We present those investments at the final stage, and this translates into very good results. It's not magic that we have good profitability. It's not magic that our sales are increasing, because this business model simply functions well. It will be continued in consecutive quarters. Probably nothing will happen in the next two quarters, and we hope the model will still perform well. When we would like to sell 1,000 flats per quarter, and we would like to be handing over 1,000 flats in quarter, but you know, it's not always the same in every quarter. There's usually, in our competition as well, there's more handovers in quarter 3 and 4. Even though we've changed the model, we would like the handovers to be at the level of sales, but it will probably not be even. There'll be probably fewer of flats in the first quarter, then in the fourth, there'll be more, but I think you're used to it already. There's nothing happening on the market. The market hasn't changed in the last few quarters. Maybe we will move on to those detailed questions from you. Let's have a short break, and please come back after a minute to answer the questions. We are back after break because there's quite a lot of questions. Some questions are similar, so we'll be trying to bundle them. Let me read one. Will the number of sold flats be similar in the second half of No, in Q2 and Q3, how does it look in September, and what level of sales are you expecting in the entire 2026? According to expectations, we have partly answered these questions. Sales in the second and third quarter are very similar, so we're assuming that this level that you have in the financial statements in Q2, it's going to be very, very similar in Q3. No significant adjustments there. I also mentioned Q4 because the number of booked flats is already so high that we're hoping that in Q4, we might be approaching 1,000, actually, so flats. At least what we have in Q2 and almost now in Q3. Right. Well, if I may add something, in the context of these sales, are the goals for 2026 for 2.5, 3,000 flats for 20 not too conservative? Yes, we need to adjust them. We are actually assuming 3,200, 3,500. So normally, so adjusted to this new number, it is a very realistic number. Usually, we adjust upwards, as you know. There was a question about one-off sales of land. If we keep buying land for years, we have our own investment preparation department, all the departments required to prepare a development. There is always something more, something less, and sometimes we need to buy something or sell something. We do not do it very often, but we perform one sales transaction. You also asked about the profitability and so on. Current cost control and the way of operation of the company is at the highest level. But apart from that, we also have historically low prices for some land that we paid in the past. In some cases, where the costs of construction cannot be limited, reduced, or the price of sale cannot be as high because of competition, our land base of land purchased at lower costs, it kind of saves us. It is on average PLN 30,000. Now we are actually more than 20% net. We would not like it to be less than 18%-20% net profitability. That would be great. Now it is more, but we do not want to have major discrepancies from the current situation. Now, regarding this sales question, how many flats do you have in offer and how many of them are finished products? At the end of August, we had 7,432 flats. About 2.5 thousand of them had occupancy permit. Now, the cost of construction, have they started increasing in the last few months? Yes, it has started, but it refers to materials whose share in the overall cost is not that high. They started increasing, but it translated to 2%, 3% on the entire construction cost. It might be perhaps 5% of the overall cost of construction. So for two years, the situation was calm with the prices. It is over now, but these are not numbers that change the calculations entirely. We have some reserves in our calculations, even if we, at the end of some construction developments and for further developments, we have still some margin to cope with this profitability. What do you think about the flagship announcement of President Glapiński as for the decreasing rates for the next two quarters, like quarters three and four? In this situation, are there going to be bigger discounts or should they be quite stable, the transaction prices? Well, the market has not changed in the last few quarters. This readiness, this finished offer, that is something that actually is a huge advantage. So it is difficult to assume if we are going to work with the interest rates. Now, is any market special in terms of potential increases? Well, the data, we prepare it, like every day we have some data, kind of reports, average, not always these rebates, these discounts are taken into account. Secondary market, primary markets are sometimes mixed, and then we have offer prices that can never be achieved. So somehow it is all averaged, and thus average prices are provided. But actually, there are no significant movements here. These prices are more or less stable, and have been for the last two, three quarters. Now, profitability growth from sales in Q2, what is it due to? Well, there is a mixture of factors. Very good land that we have, and we purchased historically at very good and profitable prices, lower than they are today. Low cost of construction that in the last two years were held constrained. These are the premises for large profitability. We have been observing these factors very closely, and this profitability results from that. Margins were high in Q2 2026. It is a similar question. What gross margin and net from sales do you expect in H2 2026 or in 2027? Yes, obviously these are some budget assumptions based on the budget that we actually have. They are revised quarterly. If we are referring to 2027, there is a lot of factors that can come in play, but about 30% gross margin on sales, 21% in 2026, that is net. Growth, it was around about 30%, so that is quite similar. These are the budget assumptions. We have talked about the land. Is the company planning to rebuild the land bank in Warszawa and Wrocław? Historically, it was more than 1,000 flats. Now it is just a few hundred flats for potential construction. It is an accurate question because we have a preliminary contract in Wrocław for 600, 700 flats. It will be finalized in January probably, in a segment of houses as well, where we have a share in this market of houses in Wrocław. So we are supplementing the land bank in Wrocław. As for Warsaw, the situation is a little bit more difficult. We were building the company in the field, more branches, and we never assumed a significant share of our operations in Warsaw because we are not from Warsaw, so it will be difficult to manage it. It is easier to manage several cities outside Warsaw than Warsaw alone. But we are open to every purchase, apart from, I know, something huge that is not on the market. But if there was something like that on the market, maybe we would hesitate. But otherwise, we are very open. It is not an easy task to find something, some land to buy. So in Wrocław, we are doing it, and in Warsaw, we are open to it, to conclude. What is the estimated cost of construction that has to be incurred in 2026 to finalize construction that are to be finalized in 2026? Maybe I will give you some assumptions from the budget that for ongoing projects is PLN 400 million-PLN 500 million, or more than PLN 400 million. But like I said before, these are undertakings that are in progress. If we launch new constructions, then there will be more outlays. But if we speak strictly about those that are about to finish in 2026, these are marginal, because majority of these undertakings are awaiting occupancy permit. All the costs of construction have already been incurred, and those that are due to be finalized in Q4, it is just some minor remaining part of the outlays. How many flats is the company planning to introduce in the offer in the entire year 2026? After this first half, we have 1,600 flats in our project, so it is being proceeded. But we are planning to introduce about 1,000 flats in the offer until 2026, and 535 flats after the first half in 2026, four investments in Krakow, two in Gdańsk, and in Poznań. So 1,300 to 1,500 altogether. What is the increase of cost per square meter do you see on the projects that you budget this year as compared to projects from last year? It's a very difficult task to do. Like I said, it's about 3%, 4% of the entire budget if we just compare exactly the same projects, but no two projects are the same. If we need to assume something more, there's always infrastructure, roads, some networks. It's difficult to answer this because every project is different. If we have a finished product, we want it to be competitive in terms of price-to-quality ratio, and this works fine. What's the approach of the company to discounts? I don't know, we've discussed it. What's the net debt level you're expecting at the end of 2026? We're expecting PLN 500 million, PLN 600 million, including cash. It's net debt, but also we need to remember there might be some opportunities to buy land, so it's the company's assumption for now. Now, assuming that in Q3 the sales are similar to Q2, as it has been mentioned, and in Q4 it's going to be close to 1,000 flats, what number of handovers can we count on in 2026? Yes, we think it should be around 3,200 to 3,500 in 2026, like I said, but the number only depends on the pace of handing over, if we manage. Now, the number of handovers until the end of the first half, and those flats that are sold and are ready to be handed over, those that we have already handed over in Q3, and I think these estimates point to 3,300 flats. It's quite conservative, but I think the company should be able to hand over 3,200, 3,300 flats this year. How many flats in construction does the company have to have in order to be able to sell regularly? Now, there was a model when we sold at an earlier level, and the results were distributed differently, but now we're, like I said, building this base of flats in the offer that are finished for sale. This inquired us to increase the number of flats quite quickly, but now we would like to sell 4,000 flats. We're not assuming 5,000. But this level is something that we feel comfortable and safe at in terms of our organizational structure, and we would like to obviously hand over a similar number, even if these numbers differ between quarters. That's our purpose. But to hand over 4,000 flats, we'd need to have 6,000 flats. We now have 7,000. It's a little bit too much. So 5,500, 6,000, that's the best number. Now, transaction of land sales, we don't want to share the profit from this transaction. Now, the profit of operating activity. It's a very, I don't know, Ola, Ms. Aleksandra is asking a very detailed question. Maybe you can approach us after the meeting. How many Is there a rule how many flats from those 4,000 flats out of the offer should be available to be sold? Well, some transactions is when they are about to be finished, 2, 3 months before finalizing. So they're not ready because they're ready when you have an occupancy permit. So if you take these into account, plus those that are actually finished on paper as well, it will be 60%, 70% out of all those flats. So, it's actually the cycle of sales is like two-thirds of sales happen 3 months before finalization and 3 months after. Questions about the margin. We've answered that. Was the current cost of construction, excluding projects of highest standard? We don't have such statistics. Every project is different. There's land, there's actual costs of sales. You cannot say, like in Szczecin it can cost 7,000, in Krakow it can cost 6. In other places, it can cost, I don't know, 6.5. So every case is different. Even if the standard is higher, all the costs are higher. Sometimes there's less infrastructure, and sometimes the cost of a higher standard flat can be similar to a lower standard flat with more infrastructure required. So it's a question that cannot be answered precisely. I can only give you some general estimates. Out of 14 projects finalized in the first half of this year, 5 got PNU. What's the outlook in the area of margin? Yes, I told you about that. More than 30. What's the ultimate price of purchase of companies and land from Budner? These amounts are published, 130 million PLN. 30 million PLN for the land and more than 100 million PLN is for shares in companies owning land. There was some price adjustment mechanism in play as well, but it was just several hundred thousand PLN. It was not significant compared to the entire price. What does the company think of this sales of one, two-bedroom flats versus three, four-bedroom flats? It's changing. Obviously, when the prices increase, there's always pressure to reduce the size of flats, and it happened here. We're not big fans of a big number of small flats because statistically, there's more of them being built in Poland, those one and two-bedroom flats, and this involves some risk. We'd be afraid to build a lot of them. We're rather thinking of three, four-bedroom flats there. In the long run, they are safer. But now it's more or less equal. There was a moment last year, 2 years ago, there was a pressure to reduce the size of flats. It's no longer there. It's more even and equal. There's a lot of questions. I think this one is interesting. In Silesia, competition is complaining that your flats are cheap, and even though the margins were great, is it the specificity of the regional market or are you just more effective? You need to answer this question yourself. What level of inventory of finished flats in numbers would you like to have to sell quarterly 1,000? We assume our goal is to have 6,000 in inventory and sell 4,000 per year. We also mentioned that. How many flats have been sold? This is a long question, so we're not going to answer that now, probably. Maybe one more. Now, ultimately introducing general plans, will it affect the length of administrative procedures? Is any land bank of the company endangered? Well, the general plans will introduce some order, like the general plans for land. They were to make it easier. They're making it more complex. It extinguishes the lex deweloper procedure, and it introduces other regulations and integrated plans, which is going to be longer, probably. We only have one project on a preliminary contract where we'll be using that ZPI, those integrated plans. But we've been purchasing land to own it. There were no preliminary contracts involved. We prepared those investments, and we purchased to own it. So we have this 2, 3 years safe future on our own project. But those integrated investment plans, this is a very complex procedure. It should be simplified, but it's going to be very costly and very expensive for the investor. Because the expectations of municipalities are very high. Too high, I would say, and I do not have a positive opinion about that. We answered the question about Warsaw. One question here. "Which years are you planning to hand over flats on land built after 2022? What effect on the gross margin will that be if you enter with projects on more expensive land?" We have this base of cheap land, cheaply bought land, which is quite large. There is obviously added land at higher prices, and it is somehow averaged, right? There will be some smaller profitabilities in certain years, but in a basket of 10 investments, you will still have a situation that seven, eight will be built on that land purchased at lower prices, and then two, three will be at higher prices. But on average, we would like to have the same margin for all of it. Now, maybe we will reduce it to 18% net in the future, but still, it would be a very good result. I think last question, "How many sold and unhanded over flats does the company have at the end of the first half of 2026?" Sold but not handed over, 543. At the end of These are sold and not handed over. I hope we answered majority of your questions. One more. "Now, the bottom margins of the 3,200 flats do not come together with the declarations on how strong Q3 and Q4 should be, and 15, 50 sold." The lower level of this amount is We prefer to say we have 32 and achieve 3,300 instead of saying 35 and selling 33. If you think it is going to be 3,500, we are not going to argue with that. Is there a chance to have a net result PLN 500 million?" We do not estimate financial forecasts, but we handed over 2,1200 in the first half, and we have at the margin that I shared, and then 2,000 more will be handed over in the second half of the year, so you can do the math. I think these are all the questions. We have combined some of them in bundles. I think we are going to stop at this moment. Please feel free to contact us by phone or by email if we have not exhausted the answers, and we will see you at the conference in November for Q3. Thank you very much, and we will see you then. Thank you. Bye-bye.