Warimpex Faces Challenges Despite Revenue Growth in Q2/24

Warimpex (WXF) faced significant obstacles in Q2/24, primarily due to write-downs of receivables and a EUR 9.9 million loss from the remeasurement of investment property. These issues are mainly linked to the company’s holdings in Russia. Despite this, the company's total revenues showed a notable growth of 4% compared to Q1/24, and the EBITDA margin improved to 34.6% from 31.3%.

In H1/24, the Investment properties segment encountered difficulties owing to a weak Russian rouble. Based on the latest financial report, East Value Research has slightly raised its revenue estimate by 3% but reduced profit estimates for 2024-2025. Nonetheless, the 12-month target price has been adjusted to EUR 1.60, up from EUR 1.58, due to improved peer-group-based fair value.

The ECB's rate cuts may make debt raising cheaper for Warimpex, potentially boosting property prices. However, the company's exposure to Russia, where it holds 36% of its Gross Asset Value and generates high rental yields of around 15%, remains a crucial concern.

For H1/24, total revenues reached EUR 26 million, a slight decrease of 1.1% year-on-year, and EBITDA was 23.8% lower than the previous year. EBIT and net income fell to EUR -2.1 million and EUR -8.8 million, respectively, due to the remeasurement loss. As of June 2024, Warimpex's net debt stood at EUR 216 million.

Going forward, Warimpex will focus on its development projects, including the Chopin in Cracow, West Yard in Darmstadt, and Mogilska IV in Cracow. The Mogilska 35 office building, which opened in Q4/23, is expected to be fully occupied by the end of 2024.