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Murapol Group’s Strong Q1 2024 Performance Amid Market Challenges

COMPANIESMurapol Group's Strong Q1 2024 Performance Amid Market Challenges

The Murapol Capital Group, one of the largest and most experienced residential developers in Poland, recorded sales revenues of PLN 327.2 million in the first quarter of 2024 as a result of transferring 752 units (-30.4% year-on-year), which was in line with the Group’s expectations and project implementation schedule. The Group’s net profit in the first quarter amounted to PLN 61.1 million.

Total net sales to retail customers in the first quarter amounted to 912 units (development agreements, preliminary agreements, and paid reservation agreements, after eliminating cancellations) compared to 862 in the same period of 2023, representing an increase of 5.8% year-on-year.

In the first three months of the year, the Murapol Group introduced 1,893 units to the offer (+433.3% year-on-year) in 6 cities, including the new market of Lublin. At the end of the first quarter, the Murapol offer included 4,714 units, which is one of the best results on the market. At the end of the quarter, the Group had an active land bank for the construction of nearly 20.4 thousand units in 16 cities.

Considering the high base from last year and the situation in the real estate market in the first months of the year, we assess our operational and financial results as satisfactory and moving towards the realization of the assumptions for 2024. It should be emphasized that in the first quarter of the year, we observed strong demand for our apartments and increased sales despite the end of the Safe Loan 2% program. This once again confirmed the effectiveness and efficiency of our business model, especially the offer tailored to market needs – modern, compact apartments that are most popular among both customers buying for their own needs and for investment. We are currently the most geographically diversified developer in Poland and at the end of the first quarter of 2024, we had a record number of units in the offer – over 4.7 thousand. Our active land bank at the end of the first quarter allowed for the construction of nearly 20.4 thousand units in 16 cities with a total area of nearly 885 thousand m2. In May, we signed an agreement for additional land, including in new cities for us: Częstochowa and Kielce. With such potential, we look to the future calmly and are optimistic about the coming months of 2024says Nikodem Iskra, President of the Management Board of Murapol S.A.

At the end of the first quarter, Murapol had a portfolio of projects under construction comprising 7,005 units being developed as part of 25 projects in 13 cities in Poland: 5,642 units in the development segment and 1,363 in the PRS segment, which the Group has been developing since 2021. The largest current markets include: Łódź (1,494 units under construction), Kraków (1,284 units under construction), Poznań (1,138 units under construction), and Gdańsk (1,044 units under construction).

Financial Results

In the first quarter of 2024, the Murapol Group had a solid balance sheet and a safe financial situation supported by high levels of sales revenue (PLN 327.2 million) and net profit (PLN 61.1 million). At the end of the first quarter, the Group had cash of nearly PLN 285.5 million and a balance sheet total exceeding PLN 2 billion.

The results of the first quarter of 2024 are in line with our expectations. We recorded a satisfactory level of sales revenue in the R4S segment, corresponding to the number of transfers oscillating at around 25% of all transfers planned for 2024. At the same time, the average price of transferred units increased by about 13% compared to the same period in 2023. In the first quarter of this year, we noticed greater activity among customers financing the purchase of units with cash – they constituted 45% in the sales structure, while mortgage clients accounted for 55%. We also noted higher transaction prices in the development segment. The achieved sales levels, combined with a rich offer of modern apartments exceeding 4.7 thousand units, constitute a solid foundation for further growth in the scale of operations and financial results of the Murapol Group – says Przemysław Kromer, CFO, Member of the Management Board of Murapol S.A.

Key Financial Data

 in PLN thousand 1Q 2024 1Q 2023 Change
Sales revenue 327,233 434,750 -24.7%
Sales revenue to
retail customers
295,720 375,531 -21.3%
     Sales revenue to PRS 31,513 59,219 -46.8%
Gross profit from sales 102,057 148,427 -31.2%
Gross sales margin 31.19% 34.14% -2.9 pp
EBIT 74,307 121,772 -39.0%
EBIT margin 22.70% 28.00% -5.3 pp
Net profit 61,131 100,778 -39.3%
Net profit margin 18.68% 23.18% -4.5 pp


Outlook for the Rest of the Year

The Murapol Group maintains its positive assumptions for 2024. According to them, the Group’s internal advantages – including a proven business model and high competences and long-term experience – will be supported by external factors in 2024. There is a high demand in the housing market, primarily in the popular segment, along with expectations for government actions regarding new programs supporting housing availability (loan #naStart). There is also a high national housing deficit, increasing consumer purchasing power, and an improving economic environment.

The strength of the Group in the coming periods will also be its abundant and well-diversified land bank, which at the end of 1Q 2024 included land in 16 cities for the construction of nearly 20.4 thousand units. The apartments offered by the Murapol Group are affordable and accessible to the widest group of potential customers in Poland, and the company had as many as 4.7 thousand units in its offer at the end of 1Q2024. The strong points of the Group’s offer are the optimal sizes and layouts of the apartments, as well as their attractive locations – not only in agglomerations but also in smaller regional cities, mostly served by its own sales network. The business advantages of the Murapol Group, its experience, and market position constitute a foundation for building solid results throughout 2024.

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