Lokum Developer Group reported an income of PLN 133.9 million ($35.9 million) after the second quarter of this year. The result was recognized from 190 properties.
Lokum Developer, operates in the Lower Silesian real estate market, in the first half of 2024, generated PLN 133.9 million in revenue, representing a minor downturn compared to the same period of the previous year (-1% y/y). The result translated into a consolidated gross profit from sale of PLN 51.2 million ($13.7 million). The net profit attributable to the dominant entity’s shareholders was PLN 29.5 million, whereas the developer’s margin equaled 22%.
In the second quarter of this year, Lokum Developer signed development and preliminary contracts for 47 properties in the Wrocław and Krakow markets. In the entire first half of the year, the Group contracted a total of 117 such contracts (94 in Wrocław and 23 in Krakow). From the start of January until the end of June this year, 190 properties were recognized (-18% y/y): 150 in Wrocław and 40 in Krakow. A 56% completion potential of recognitions for 2024 was achieved. At the end of the first half of the year, the developer had 421 properties on offer, of which 192 were ready to be handed over. 584 apartments were being constructed.
In this reported period, Lokum Developer introduced 84 apartments in the popular Lokum Porto investment in Wrocław’s Old Town, and 84 retail units in the Lokum la Vida housing estate under construction in Sołtysowice, where the second phase of the investment has begun.
– In the first half of 2024, especially in the second quarter, there was a clear weakening of demand, which is also reflected in our results. Customers are interested in buying apartments, but due to very high financing costs, they are postponing the decision to purchase a property. We currently have the most expensive mortgage loans in the European Union in Poland. This situation severly narrows down the group of people who can afford to buy an apartment, although their prices are lower than in most European countries – both nominally and in relation to wages. Customers are waiting for a reduction in interest rates and the introduction of the “Credit for start” program. Such a form of support would allow many households to realize their dream of owning their apartment today, especially at a time when the availability of properties from the primary market is at a good level. The inability of customers to finance apartments will inevitably lead to the suspension of new investments by developers and consequently a smaller offer on the market. It therefore seems crucial to provide support for buyers today, in order to maintain a balance in the market in the coming years – said Bartosz Kuźniar, CEO of Lokum Developer.
In the current year, Lokum Developer made an early redemption of series I bonds. Bonds of series J are currently traded on the stock exchange, with maturity in the second quarter of 2027. In August of this year, a dividend payment of PLN 43.2 million was made for 2023 ($11.6 million), equalling PLN 2.40 per share.
Lokum Developer has a sizable land bank, which allows for the realization of over 11 thousand properties.
Source: https://ceo.com.pl/wyniki-finansowe-lokum-deweloper-za-i-polrocze-2024-r-30128
