EBITDA Profitability Down at Appeninn Group

In the first half of 2025, Appeninn Group and its controlled subsidiaries retained a real estate portfolio focused on office and retail segments, that generated rental income of EUR 10.797 million and gross margin of EUR 7.170 million, and represented a gross margin ratio of 66.4%, increased from 62.2% last year, the Group has announced on the website of the Budapest Stock Exchange.

While revenues and profitability from Hungarian operations remained stable, Polish real estate revenues have decreased. The lower rental income related to the leave of one significant tenant in Poland during March, 2025, which has been partly replaced by the end of the half year, while leases signed during the first half of the year and tenant developments being progress, occupancy should continue to increase in the coming months.

The group's EBITDA profitability - including and mostly driven by the impact of property revaluations - is significantly lower than last year at EUR 3.764 million compared to 7.511 million in the first half of 2024. This is not driven by the deterioration of operative performance, but is due to difference in the exchange rate between the value of the Hungarian real estate portfolio at the balance sheet date and the functional and presentation currency of the Hungarian subsidiaries.

The EBITDA calculated after excluding the impact of the revaluation of real estate in Hungary of EUR -2.942 million amounts to EUR 6.707 million, compared to EUR 6.821 million last year, which shows an increase in operating profitability from 57.73% to 62.12%, with a decrease in the absolute amount of adjusted EBITDA by EUR 114,000.

The positive exchange rate effect of the Polish real estate value of EUR 865,000 euros, due to same functional and presentation currency of the Polish entity, is recorded in other financial income, thus not affecting the amount of EBITDA, but only the profit after tax. The remaining amount of other financial income and expenses is the result of the revaluation related to changes of exchange rates of the loans and deposits.

The increase in the negative balance of interest income and expenses is the result of the interest cost of subsidised bank financing and the favourable, but declining, interest rates on deposits
in forint and euro, which still result in significant cash holdings. Of the 1.361 million balance of interest income and expenses, 938,000 euros related to financial cash flow in the first half of 2025, while the remaining 422,000 euros was related to adjustmentsin accordance with IFRS standards and did not represent actual cash movement.

The net profit after tax for the half-year as of 30.06.2025 amounts to EUR 3.419 million, which, after adjusting for the effects of property revaluations detailed above (+EUR 2.942 million for the
revaluation of Hungarian properties, -EUR 0.865 million for the exchange rate impact of the unchanged value of Polish property), comes to EUR 5.496 million compared to EUR 6.342 million last year, adjusted for the same effects. The adjusted profit after tax is 13% lower than the previous year, representing a profitability of 51% on turnover and for the six months 4.42% on equity.