MLP Group revenue increases by more than half

Business figures for the first half of 2023:

• Operating result amounts to EUR 40.3 million: +52% compared to the previous year
• EBITDA excluding revaluation reaches EUR 21.1 million: +64% compared to the first half of 2022
• The value of investment property increases to € 963.1 million: +2% compared to 31 December 2022
• The net asset value (NAV) amounts to EUR 538.0 million: +1% compared to 31 December 2022
• The net asset value per share reaches EUR 22.4: +1% compared to 31 December 2022
• The operating result (funds from operations - FFO) amounts to EUR 12.6 million: +58% compared to the first half of 2022
• The net loss amounts to EUR -17.9 million
• Lease agreements for around 161,000 m² signed in the first half of 2023 or in the process of being signed by September 2023
• 85% of the portfolio to be awarded the BREEAM "very good" certificate or a DGNB equivalent by the third quarter of 2023

Caption: Radosław T. Krochta, Chief Executive Officer of the MLP Group S.A. Copyright: MLP Group.

"In the first half of 2023, we adopted a conservative approach in view of the uncertain economic situation. Despite the difficult economic environment, we have achieved excellent results, both from an operational and financial perspective, driven by a strong letting performance across Europe. We increased revenues and funds from operations (FFO) by more than 50 per cent in the first half of the year - a very important indicator for us, which demonstrates the immense potential and operational stability of the MLP Group. The value of our investment properties reached EUR 963.1 million, which is an increase of two percent compared to 31 December 2022. However, we have also noticed that users take longer to make final decisions - the majority of deals will therefore be concluded in the third and fourth quarters of 2023," says Radosław T. Krochta, CEO of the MLP Group S.A.

Contracts for more than 160,000 m² signed in the first half of 2023

The MLP Group, a developer, owner and manager of high-quality commercial, industrial and logistics parks specialising in brownfield sites, is expanding its activities in Poland, Germany, Austria and Romania. The company's existing portfolio currently comprises 21 parks. The strategic goal remains to expand the portfolio through the continuous development of logistics and urban commercial parks. The rental agreements concluded in the first half of 2023 or currently being signed until September 2023 cover a total area of around 161,000 m². As occupiers currently need more time to make final decisions, most contracts are expected to be finalised in the third and fourth quarters of 2023. The industrial and logistics sector in Europe is benefiting from structural demand drivers such as the need to further improve supply chains and the increasing interest in nearshoring and friendshoring projects.

In the first half of 2023, the MLP Group began speculative development in Poland and Romania (totalling 108,000 sqm of space). 26 per cent of the space has already been let during the construction phase, confirming the strong demand. In total, the MLP Group handed over around 97,000 m² of new space in the first six months of 2023. At the end of the first half of the year, the developer had 1.07 million m² of completed space with an occupancy rate of 97.4 per cent, with a further 122,000 m² under construction or in the pipeline. The average contract term is seven years and the occupancy rate is 100 per cent.

Stable financial position contributes to the achievement of targets

"We have a solid financial position to realise our growth targets. In view of the current geopolitical situation and the high volatility in the economy, we are well prepared for the current challenges. 100 per cent of rental agreements are linked to the consumer price index (indexation once a year in February). All rents are also denominated in euros or expressed directly in euros, which reduces our currency risk. Almost 80 per cent of the loans are secured by the Internal Revenue Service (IRS) for the next five years, which results in a limited interest rate risk. The most significant factor, however, is the potential of the secured properties, which will enable rapid development on the European markets in the coming years," says Radosław T. Krochta.

The MLP Group also has a strong cash flow position. The loan-to-value (LTV) ratio was 35.7 per cent in the first half of 2023, while the interest coverage ratio (ICR) was 3.0x. The company has a long maturity ratio of 4.3 years. The operating result (funds from operations - FFO) amounts to EUR 12.6 million, an increase of 58 per cent compared to the previous year.

ESG measures are attractive for tenants

The MLP Group is consistently focussing on investments in the field of renewable energies. This sustainability strategy is in line with tenants' expectations of improved energy security, lower utilisation costs and the opportunity to fulfil their own ESG requirements. For example, the developer has installed photovoltaic systems with a total capacity of 4.67 MWp and plans to increase this to 6.46 MWp by the end of the year. The aim is to install a photovoltaic system on every building and establish this as standard in the construction of new properties.

Potential for further growth

"Demand for space is high in all the markets in which we operate. However, we are seeing strong demand from companies in the light industrial segment, which reflects the friendshoring and nearshoring trend that is also in line with our strategy. This is because we are continuously increasing our space. In the past period, we increased the expansion potential of the Polish parks MLP Poznań West and MLP Pruszków II. We are also in the process of acquiring land for projects near Berlin, Germany, and in Bieruń, Poland, and expect to be able to finalise these transactions in the near future. In the second half of the year, in addition to a number of projects in Poland and Germany, we will also be launching city logistics projects in Poznań and Łodź, both in Poland, as well as in Vienna, Austria. In Germany, we are continuing our expansion, which is characterised by the steady growth of our project portfolio. We are planning to strengthen and expand our presence in the Ruhr region, Brandenburg and Hesse. Further development on the German market is a key element of our strategy. In 2023, investments will amount to around EUR 100 to 150 million, of which around 30 per cent will be for the acquisition of new properties. We are planning to rent around 200,000 to 300,000 m² of new space for the year as a whole," adds Radosław T. Krochta.

As part of its Build & Hold strategy, the MLP Group retains completed parks in its portfolio and manages them. All projects are characterised by very attractive locations, the use of built-to-suit solutions and tenant support during the rental period.

About MLP Group S.A.:

The MLP Group is a developer, owner and manager of high-quality commercial, industrial and logistics parks in Poland, Germany, Austria and Romania, specialising in brownfield sites. The company currently owns and manages a property portfolio of 21 parks in four countries with a total size of approx. 1.74 million m² of existing and approved rental space ready for construction. The net asset value amounts to approx. EUR 538.0 million (Q2/2023). The MLP Group has been listed on the Warsaw Stock Exchange WSE since 2013 (ISIN: PLMLPGR00017).

With offices in Warsaw, Munich, Cologne, Vienna and Bucharest, the company offers customised and sustainable real estate solutions for users from various sectors such as retail, e-commerce, manufacturing, automotive and logistics.

The MLP Group was founded in Warsaw, Poland, in 1998. The company has been represented on the German market since 2017 and currently operates projects at four locations in Berlin, Unna, Gelsenkirchen and Idstein. Further projects in the pipeline in Germany and Austria are planned in the regions of Berlin, the Ruhr area, Düsseldorf, Cologne, Frankfurt, Munich and Vienna.
Further details on the MLP Group can be found at www.mlpgroup.com

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