Our CEO, Paras Gostoni, our CFO, and Zsolt Farkas, our, chief operate chief strategic officer. We will have a short presentation of the 2024 results and achievements, and this presentation will be followed by the q and a session. This presentation is being recorded, and the fair recording of this presentation will be posted on our website. Thank you very much. Let me give the floor to Jula.
Thank you, Margot Shah. Thank you, everyone. Good afternoon. GTC closed a stable financial year in 2024. Our revenue from rental activity and gross margin went up by 2% to €187,500,000 and €130,500,000, respectively.
Our FFO funds from operation remained pretty much unchanged at around 71. Thank you, Markus. One million euro, which concludes at an FFO per share value at €0.12 The EPRA net asset value increased to €1,284,000,000 Given the fact that there is no significant change in terms of our appraisal, in terms of our asset value, this increase is mainly due to the issuance of the participating notes to the vendor of the Germany German Polar transaction. Our net loan to value increased to 52.7% compared to 49.3% at the end of twenty twenty three. And if we go deeper, taking into consideration the exclusion of the effect of the German residential portfolio loan to value, if we exclude it, then the net asset the the the loan to value would be 47.2%, which is a decrease.
And this trend will be achieved upon the realization of the business plan of the German portfolio. The occupancy level slightly dropped from 86% compared to 87% at the end of twenty twenty three, and our cash balance remained stable at €55,200,000 Additional significant cash proceeds have been realized in the first quarter twenty twenty five from asset disposals. Go to the next slide. Here, we would like to highlight the three asset disposals executed in 2024. The first was the Matrix c office, which is located in Zagreb, Croatia with a with with with with a 10,500 square meter premium office space at a sale price of €27,000,000.
The second is the second was our Berghrad office with 17.7 square meter at a sales price of €52,000,000. These two these two assets were sold at fair value, at book value. And the third one is the Villanov Villanov plot disposal at a sales price of €55,000,000, realizing almost €10,000,000 gain on the disposal. GTC in 2024 in December successfully executed the German transaction, the acquisition of the so called Paula portfolio. This portfolio is centered around cities in Germany.
These are Kaiserslauter, Hampstead, Heidenheim, and and Schoningen. The portfolio has a comfortable occupancy rate of 83% with the potential upside in terms of occupancy. The portfolio comprises almost 5,200 residential units with a total area of more than 325,000 square meter. The average unit size amounts to 61 square meter, and this portfolio contributes €23,000,000 annual in place rent to the to to to our income stream at a blended headline rental rates of €7 per square meter per month. The strategy of, of the German Polar portfolio, shall be divided into two main, milestones.
The the first strategy is the, implies a near term sale of, of assets, single assets, or, or buildings itself to institutional investors or to private individuals, carefully determine the sub portfolio with the advisers in in order to best suit to the strategy. The sub portfolio, which is intended to be disposed in a short period of time in one to one point five year period, would mean 130 assets with more than two two thousand two hundred residential units and 14 commercials comprising more than 132,000 square meter. The second part of the portfolio Agucha, please turn the slides. The second part of the portfolio implies a long term old strategy to benefit from the German rental market, shifting GTC's portfolio towards a more balanced and diversified asset portfolio. The the sub portfolio, which is intend to intended to be hold as a residential for rent, incorporates 114 assets with almost 300, that was 3,000 residential units and 33 commercial units with an area of almost 200 square meter.
The the second portfolio, the whole portfolio, GTC will cooperate with a with a techno technology technological company called Poltech, to attract additional tenants, with state of art energy efficient housing. This strategy, this structure, in order to modernize the heating system, would need a very low CapEx requirement in terms of based on the business model. And for the remaining ESG related capital expenditure would be % financed by state subsidized so called KFW loan at a very low a little bit more than 210 bps interest rate sources. Markus, please turn the slides. GTC Quanting used to be committed to its strict ESG strategy.
Almost all of the assets, 93% of the assets have green certification. This means lead gold and premium excellent qualification. And we have been focusing on green buildings and reducing its carbon reducing our carbon footprint in order to mitigate environmental impact and enhance our asset value. The German poly Polar portfolio fully fits to this ESG strategy of GTC, and it offers the opportunity to improve energy efficiency with the solution of PowerTech and other ESG, other environmental modernization capital expenditures, ultimately enhancing and increasing the asset value itself. So under the second part, this whole strategy, GTC developed a CapEx plan, which will be funded with the attractive low priced KEFW loans.
If we go to the if we summarize the funding of this transaction again as it was publicly announced, the funding was taken place by three major financing lines. One of them amounted to 186, 1 hundred 80 5 million euro existing senior banks, which were taken over with the with the portfolio itself, and it it comprises four it comprises financing sources with four main banks four main German banks. GTC, in order to finance the part of the portfolio, issued participating notes at the level of at at an amount of €42,000,000, which were issued by GTC to the vendor LFH company. In order to finance the equity part of the portfolio, a new senior secured five year loan was granted at an amount of hundred and €90,000,000 from a from a private credit institution. Executing the the second main milestone of the acquisition, GTC on the seven GTC exercised the call option to acquire the remaining a little bit more than 10% of the portfolio in order to achieve in order to reach the ownership of 89.9890.9% in the whole, Paula portfolio.
GTC executed a milestone acquisition, by this transaction fitting, into its strategy of asset diversification, And GTC shifted almost one fifth of the portfolio in the AAA rated Western European country and to and and and made a huge step into the residential market with this transaction. We go further further to the commercial portfolio of GTC, This significantly changed due to the due to the Polar acquisition. Out of the total investments, 87% of the total portfolio in terms of gross asset value qualifies a recurring income producing asset portfolio. And out of that, 52 recurring income portfolio comprises offices, 29% is retail, and 19% is residential. The active development project projects amounts to 5% out of the whole portfolio and 8% are land reserves.
Night 94% of the total portfolio is located in EU countries, and we achieved an increase to 51% located in higher rated countries. So and and as I presented previously, 93% of the commercial assets have green certification, and 5% is still under still under the certification process. With this new acquisition, Poland remained the flagship in terms of geographical wise with the $706.07 €60,000,000 gross asset value, which constitutes 31% of the total portfolio. The second largest country we are in is Hungary. This is all located in Budapest, comprising 26%.
And the third one, the one fifth of the whole portfolio is now located in Germany at 19%. We go further with the analysis on the office portfolio. The occupancy level slightly dropped to 82% compared to 83% in the in this in the third quarter of twenty twenty four. This is mainly due to the office vac vacancy trends in the Polish regional cities and Budapest. The world, the average weighted lease term kept at three point eight years.
We have been experiencing improvement in the leasing activity of the company reaching more than 106,000 square meter in 2024. New lease agreements have been signed of almost 10,000 square meter and prolongation of almost 6,000 square meter in Houj. And here, I would like to highlight our success in 2024 with the five year prolongation of our anchor tenant in Budapest. This is the Ericsson headquarter in the Universum asset with more than 20,000 square meter leased space. Please turn the slide.
Yes. Okay. The retail portfolio, we managed to kept the occupancy rate at 96%, in by improving the weighted lease term, the average weighted lease term, to three point seven years from three three point four years compared to the previous quarter. And we can see that our main retail tenants have been prolonging in all shopping centers throughout the whole throughout the whole portfolio, resulting in a leasing activity of almost 53,000 square meter in 2024. And, here, I would like to give the floor to mister Bostoni, our group CFO to come to the presentation of the financials in details for 2024. Thank you very much.
The financials will be will be presented in in their regular order. So we start with the income statement and the cash flow. They're on that that metrics, and we are closing with the balance sheet. And after that, we can move on to to the q and a. So coming to the to the profitability of the company, as you mentioned earlier, 2024 was a a stable year for during GTC.
Gross margin from operations increased over 2%. That was stemming from €5,000,000 of increase of revenue from rental activity, including, rental and service service chat revenues. The increase was due to indexation of the rental rates supported by introduction of new capacity in in Budapest, Berggrand, Zagreb. As the cost of operation have been also affected by inflation, our gross margin resulted in €131,000,000. Below administration expenses decreased to €18,000,000 mainly due to decreasing share based payments, remuneration, and fees.
While for 2024, we, recognized revaluation loss of €2,000,000, much milder than than in 2023. The the 2,000,000 loss, was mainly due decreasing, in the value of completed office portfolio in Poland as a result of the before mentioned, challenging regional city rental market. A slight decrease in occupancy compared to 2023 explains the the reason why the decrease in the portfolio value in Poland. This was was offset by the increase in the value of land banks, and also our shopping mall segment increased by almost €6,000,000 in value. And as we continue the development on Center Point 1 to three, we recognize additional €6,400,000 on on the office segment that were offsetting the the losses in in the German sorry, in the Polish office portfolio.
So that resulted for GTC before tax and interest at €103,000,000 that underlines the stable profitability of the core operations. And as I mentioned earlier, this was underlined with the stable values and no change in or minor change in the in the portfolio value. So net financial expenses, I would like to mention here, where from year to year, it increased by 7,000,000 to €40,000,000 in 2024, it includes a one off item of €3,000,000 interest related to the withholding tax court proceedings court court proceedings. These changes were in line with market conditions as the increase was mainly due to new drone facilities, loan facilities, resulting in an increase of the average the weighted average interest rate of 3.45. That's an almost 1% increase compared to the same period last year 2023.
The tax that we we accounted for included current tax expenses amounting to €77,000,000 and deferred tax amounting to €22,000,000 resulting GTC's profit at 53,000,000, while the EBITDA reached €106,000,000. That's a little bit higher increase than 4% compared to the twenty twenty three twenty twenty three figures. If we move forward to the to the to the cash flow, cash flow from operating activities remained strong over 3% increase year on year backed by the the strong revenue and the controlled cost I mentioned earlier. Funds from operations stayed stable at €71,000,000. Investing activity, investment in real estate and related has increased.
€237,000,000 was spent mainly due to the acquisition of the German portfolio. €172,000,000 was allocated to that, but this portion of the investment was %, financed. These were complemented by investing into properties core properties in Central Eastern Europe, where we spent €71,700,000 and the purchase of residential project and the purchase of shares of solar solar energy producer company in Hungary took out the remaining €17,000,000 of investments. The change in deposits resulted 14,000,000 improvement to our cash balance. That was due to the closing of the bond buyback before the end of the year.
The two disposals that we concluded in 2024 was resolving 15,000,000 cash inflow. This was a sale of nonoperational hotel in Budapest called Landsit Hotel and the land plot smaller land plot in Sofia, Bulgaria. Financing activities were also quite intense in 2024. This supporting GTC's cash flow by €134,000,000. In 2024, '1 €262,000,000 of new loan facilities were acquired, including the acquisition loan, for the German transaction complemented by senior facilities in Germany as well as in Poland and Bulgaria.
The interest payments sorry. The inter yeah. The interest payments increased by 10%. That was underlined before by the increase in the weighted average interest rate within the within the senior loans. What worth mentioning that the cash at the end of the period of €55,000,000 was is including €2,000,000 related related to the assets held for sale.
And and that's basically resulting at relatively low €55,000,000 of cash at the end of the period. However, as we already communicated in q one, we closed several strategic transactions that are improving and that has been improving our our cash balance already by q one. Our cash level in q one will be over a hundred and €10,000,000. But, of course, this cash on balance will be directed towards development commitments as well as refinancing as well as CapEx spending in the com coming quarters. I think we can step over to to debt metrics.
So our total debt stands at €1,660,000,000, which is split with €644,000,000 of unsecured debt, and we have little bit over €1,000,000,000 of secured. And out of these facilities, 95% are hedged. So I feel straight. We so through the throughout the year, our metrics have slightly decreased. Our net LTV reached 52, seven, percent, and our weighted average debt maturity, is standing at three point three years.
The weighted average interest rate I mentioned earlier, And, it's worth mentioning that we were successful in extending, or refinancing all of the mature maturing facilities in 2024. And we have partially achieved already, the 2025, outstanding maturities, meaning that we closed and refinanced with the same financing parties, Donahue and Yraska, financing. And, we are in an advanced stage to either prolong or refinance the facilities we took over with the public transaction. And also want to mention that as in twenty twenty six q two, the bond, the overall bond of ours, which is the 500,000,000 bond as it's referred to, we intend to get prepared and and address the refinancing before maturity. Our other key debt metrics changed over the course of the last year.
The annual annualized consolidated coverage ratio decreased slightly to three times the EBITDA. Mentioned the net LTV consolidated coverage ratio increased to 32%, while the unencumbered properties in percentage decreased by over 10% in value, they are still standing at €940,000,000. When it comes to the balance sheet investment properties, the investment property value has increased by 18% in 2024 due to the resident mostly due to the residential portfolio acquisition in Germany. We also executed investments into the properties under construction in the range of €48,000,000. That means we invested in CapEx and fit out in completed properties a bit over €36,000,000.
Also, €2,675,000,000, includes purchase of, investment property under construction. And during the 2024 financial year, we executed and closed the sale of Matrix C Office Building as well while we reclassified two investments of ours into assets held for sale, which was the Vilanov Plot and GTCX. And these were the transactions that Juda mentioned earlier that we closed in q one. We recognize the slight increase in the residential land bank of ours, where you can see the above mentioned reflect reclassification effect in the assets held for sale line of the of the balance sheet. Cash and cash cash equivalents resulted in €53,000,000.
And as mentioned earlier, this is there's €2,000,000 of difference compared to the, cash flow statement, that's related to the reclassification of asset sales for sale. The net effect of the, year, was negative €7,000,000 on on cash and cash equivalents. And as I mentioned earlier, this is not reflecting the closed transaction. So high big big improvement is going to be announced or presented in q one. That was slightly increased in all geographic locations, including the newly closed German portfolio.
Noncurrent financial assets increased due to set of investments increased in in their values, while prepayments and receivables decreased as the developments, and, bond buyback bond buyback project of ours progressed. On the liability side and the equity side, equity increased due to the before mentioned recognition of participating notes in the amount of 41,700,000.0 issued for the acquisition of German residential portfolio. This was partially offset by the dividend payment that happened second part of last year and the the decrease in the value of capital reserves due to the recognition of liabilities arising from the German portfolio transaction that includes 18,600,000.0 obligation related to the option price for the minority shares of Preach as well as almost €9,000,000 liability for the for the minimum, dividend payment, to these shareholders, which was complemented by the decrease in the value of hedge reserves reaching a bit over €14,000,000. The minorities on our balance sheet increased again just due to the German transaction, and and our short and long term borrowing borrowings increased significantly. The majority of this increase is related, again, to German transaction, which which includes the acquisition loan of 190,000,000 and the senior loans of €183,000,000.
And beyond these two new financings, we, earlier the earlier in 2024, secured 55,000,000 loan on model Sofia in Bulgaria. These were com compensated by repayments during the the period where we repaid €56,000,000 of, senior facilities, and, we record
Harish, I think you can continue.
Okay. Would you be able to put the presentation on the screen?
Yes. I'm doing that.
So due to technical error, I believe we I was explaining the short and long term borrowing increase. And and as a conclusion, we resulted or we ended up with 161 60, 10,000,000,000 €1,610,000,000 of of, financial debt. Our derivate derivatives increased mostly due to the increasing hedge liability related to the Hungarian foreign bonds due to the revaluation of the, currency exchange, Hungarian foreign to euro. Our liabilities for options on noncontrolling interest and other long term payables are mainly due to €18,600,000 of liability for the put option for the noncontrolling shares of Beach Properties at present value of the redemption amount to be paid to the noncontrolling shareholders. And on top of it, we recognized the €4,800,000 liability for the minimum dividend payment of the holding company of the German transaction.
And on top of it, we recognize €7,300,000 of accrual for tax legal case, on withholding tax. That's, on the liabilities for the options. And on the other financial liabilities, we recognize and present a 9,000,000 financial liability regarding retained purchase price for the shareholder loans, which will be paid together with the fee to the call option to LFH and, liability at the present value of the redemption amount to be paid to the noncontrolling shareholders under the call option. These are all part of the German acquisition. Due to the reclassification of assets out for sale mentioned earlier, we have an increase in the liabilities related to these assets, and that basically takes our total equity and liabilities at 3.2 hundred and €25,000,000,000 at the end of twenty twenty four.
This concludes the formal presentation and we are opening the floor to the Q and A questions to the quick Q and A session. Please speak up if you would like to ask the question.
Hello. This is Thanks for the presentation. Maybe then I can kick off the the q and a. I would prefer to ask one by one, please. And to start with, obviously, you cannot speak for your controlling shareholder, but from the perspective of GTC's equity holders, bondholders, the company itself, Could you help us understand what would be the implications in case the current shareholder became insolvent by the end of the second?
Thank you for for the question. So as as a as the management board of the GTC, we cannot state and cannot quote anything on any liquidation any any liquidity problems of the main shareholder, so we are not able to stand on behalf of them. What I can what what what the management board of GTC can assure and state is that GTC has its own diversified portfolio with a stable, robust income stream. GTC is fully independent from the financial situation of the main shareholder. The main shareholder has not taken any financial liability from from from the shareholder to g t.
And vice versa, GPC has not take any financial liability towards the shareholder. So financial wise, are fully independent from the shareholder except for the Thanks
very much. Maybe, yeah, we can ask the people who are not talking to me. That's all I think I got to just thank you. May I also ask about CapEx requirements in the eighteen months ahead? So starting with the year end '24 and looking into '25 and first half of twenty six on developments, on maintenance, on the buyout of the German minority partners.
And anything else, if there is anything else, could you walk us through sort of what amounts do you expect to need to spend up until the bond maturity?
Balaj, can you please reflect on this question? Thank you.
Well, we don't really publish forward looking indications. So we we basically are updating and handling our our business plan, but we we we we don't indicate during these calls what are the forward looking spendings per asset or per per country.
Right. Okay. Understood. And on the bonds specifically, I mean, it will move into short term maturity during the midyear results. Can you give us an update in terms of your thinking about how do you expect to address this maturity as a sort of base case scenario?
Well, we as of today, we see several opportunities available for for us. We have been evaluating the various opportunities in the in the well, actually continuously evaluating these opportunities. And as the as the capital markets and the cost of financing in the various various facilities are are changing and developing quite actively in in recent months, we we do keep our options open as of as of now.
Understood. Thank you. Specifically on the Kildare project outside of Dublin, I understand that the expectation was that by now it already would have been sold. Could you walk us through the process so far? I mean, were there advanced negotiations which have broken down?
Or I mean, what has been the status up until now?
Q Q, there. So yep. Yes. The disposal of QDAR is still on the table. The our 25% stake in the project.
Negotiations are still ongoing with the major share the major stakeholder of the project and and in line in cooperation with the major shareholder major stakeholder to other investors as well. We are still in sort of advanced negotiation, but it has not taken place yet.
I see. Thanks. And final question from my side on the German acquisition. I mean, now you own it for for four months. Essentially, it's roughly half a year since we have learned about it for the first time.
Have there been any disposals concluded so far? And, also, could you give us an update now that you are definitely more familiar about this than when we spoke about it on the introductory call on the FFO impact in 2025?
In terms of the German portfolio, the the disposal sub portfolio, which is intended to be disposed, so there are milestones. We closed the deal. We have the we have the control since December December. There was a milestone to to acquire the remaining, a little bit more than 10% share from the vendor, from the seller. And now we are focusing on the on the on the dis to to on the execution of the disposal strategy.
There are two and three family offices and individual interesting parties we have we are conducting negotiations with. What we undertake with this portfolio that the disposal strategy will be delivered in one or one one to one and a half year. So the management still believe that's that it is feasible to be executed. In terms of the FFO contribution, as mister Gostoni mentioned, we are not able to give you forward looking figures right now. What we presented is that the contribution in terms of in place rent would be €23,000,000 of this portfolio.
Thank you. Additional questions to the management.
Yeah. This is Peter from Mann Group. I mean, recently, there have been a number of changes to the board of directors. Can you just comment on why that was done? Presumably, it was because of the investigation that's taking place at the Topco.
But any color you can kind of provide on on the recent changes to the board would be helpful.
Yes. Again, GTC's management board cannot state on behalf of the shareholder. The only information g t z GTC's management board has is that, the changes in the supervisory board was purely due to the changes in the leadership of the of the of the management in the management of the foundation and the and the managing company of the foundation called Optima.
And and, I guess, given the changes, I mean, do you think the governance is is going to will there be a positive effect from the changes that have been recently made to the board?
Yes. I I I I can repeat myself again. As I said, the delegates of the major shareholder has been have been revoked, and new new shareholder representatives have been nominated in the supervisory board. The the relationship and the cooperation with them, their governance is quite new, so I I I I cannot express any opinion and any statement on how the cooperation will goes on, but, presumably, the the the new governance will set up in a short period of time and and the major shareholder will represent themselves in the supervisory bond in in in the governance of the company.
Maybe it's just just to underline what Jula Jula shared that that we as as as GTC have have been having a proper governance of of decision making, and this has not changed due to due to any any new delegate. So we stick to the robust governance of the company, and we continue to to to work along with those those internal regulations.
And then just a a question regarding the refinancing of the notes. I mean, you know, has JPMorgan kinda been providing you, you know, with I'm just trying to understand. Is this is this more of an issue about the the cost of capital going forward, is it related to the structure? I mean, you've got a number of unencumbered assets that you could use. You know, can you can you help us think about, like, what a refinancing may look like?
Is it gonna be, you know, largely could it be a mix of a secured and an unsecured financing? I'm just trying to understand what you're trying to weigh up in your decision process. Thank you.
Just to con comment on on what we are waiting on, the the sources of of the refinancing can be can be come from for the company from from disposals, from senior financing, and then going to the to the capital market. I believe these these are the the these options pricing and how available in the coming periods for the for the management, how how available are these, in what form and what size and what at what cost is what's being being assessed. And as the capital market has been quite fluctuating, let's put it that way, it's it's we need to keep a a close eye on how how they double up. So, basically, I I as of now, this is what what I can give you on on what is being assessed.
Okay. Thank you.
No questions? There are no more questions. I'm closing the meeting as of now. I'm remaining available to anyone who would like to more information or detailed information on the financial results of 2024. Thank you very much for your participation and for your interest.
Yes. Hello. Excuse me. I have, like, a really quick couple of questions. I I've seen that, people before me asked, questions about the sub, about the changes in the main shareholder.
So I won't ask about that, but I have a quick question about the the debt used in the recent transaction because maybe there was there was information about the cost of that debt, but I couldn't see that on the presentation. So could you elaborate more on that?
We do not publish on individual financing costs. So as a as a one by one item, we do not publish costs and and percentages on on the financing that we that we acquired. I believe we we had a publication on the on the transaction, and what was included there is basically what we what we can share.
Okay. Okay. And one more question about that. Did the board vote on that transaction, and were there any disagreements in the supervisor board?
The board vote on the transaction, we cannot disclose the result of the voting. This is a company privileged information.
Okay. Thank you.
That's It was approved by the by the vote by the board as as this transaction is in the hands of the of the supervisor board, and a transaction above €30,000,000 is in the in has to be presented to the to the approval of the supervisor board in case of GTC.
Okay. Thank you.
I understand that there are no more questions, so let me try to close the meeting again. Again, I'm remaining at your disposal. If you need any additional information or detailed information, I will be more than happy to answer any questions you may have at this stage. Thank you very much for your participation and for your interest, and speak to you soon. Thank you.
Thank you.
Goodbye.
Bye.
Bye.