Between January and March of 2018, Polnord group reported revenues from sales of PLN 84.3m, versus PLN 12.9m in the same period last year.
Between January and March of 2018, Polnord group reported revenues from sales of PLN 84.3m, versus PLN 12.9m in the same period last year. This substantial increase in sales is due to the threefold increase, from 109 to 323, of the number of units recognized in 1Q 2018 financial results. Gross profit on sales in 1Q 2018 totaled PLN 12.4m, with a net profit of PLN 3.3m.
- First quarter financial results demonstrate that the guidelines of our strategy, which we used as the basis for the restructuring of the company for over two years, are bearing actual results. We are successively improving sales figures, which begun to be reflected in the currently presented financial results. By executing landbank revaluation process in 2015-2017 we have freed up properties for residential construction. If we failed to do so, it would be uneconomical to execute development projects on these properties. Due to these legacy issues, when analyzing Polnord’s current financial standing and its prospects, we need to look at our cash flow rather than our income statement. Strong operating cash flows allowed us to generate PLN 6.4m in cash in 1Q 2018 versus close to one million zloty deficit in the same period the year ago, saysDariusz Krawczyk, the CEO of Polnord SA.
Net sales of residential units in 1Q 2018, weighted by Polnord’s interest in its subsidiaries, reached 299 versus 336 units contracted in the first three months of 2017. The slightly lower sales were due to the end of the government-sponsored MdM first-time homebuyer program.
At the end of March, 2018, the group’s financial debt totaled PLN 398.8m, a decline of 4.7%. The reduction of cash held from PLN 119.7m to PLN 102.9m was due mainly to the repayment of debt at Getin Noble Bank (PLN 10m) and BOŚ Bank (PLN 6.25m). The group ended 1Q with net financial debt at a safe level of PLN 295.9m, comparable on a year-on-year basis.
In the first three months of 2018, the company has completed sales of residential units at the Brzozowy Zakątek estate in Warsaw’s Wilanów district. Polnord has also launched virtual sales support tools at three sales offices, Morena and Fotoplastykon in Gdańsk and Osiedle Neptun in Ząbki near Warsaw. At the moment, the company is continuing work to deploy VR technology at other investment projects. In 1Q, the company signed an ownership transfer agreement through which it purchased a property of 12,505 sqm (residential area of c. 10,000 sqm) at ul. Admiralska in Warsaw. The purchase of this property will allow the company to build 213 units and 228 parking spaces.
On May 25, 2018, Polnord signed preliminary agreements to purchase two investment properties located in the area of ul. Lazurowa, in Warsaw’s Bemowo district. The location, with an area of 13,329 sqm, will allow the company to build a multi-family apartment complex (258 units) together with an underground parking lot (276 parking spaces), with a usable area of c. 16,815 sqm.