Better-Than-Expected H1 Results at Graphisoft Park

The 2023 H1 pro forma net result of EUR 3.68 million is significantly, by EUR 900,000, or 32% higher than the same period of the previous year, and is also more favorable than the previously published forecast for 2023, the company managing an industrial park primarily occupied by offices and laboratories of information technology and biotechnology companies in the north of Budapest has said on the website of the Budapest Stock Exchange.

The result, which is significantly higher than the previous ones, is due to the higher-than-expected indexation of rents following the consumer price index of the European Union, as well as the still high occupancy rate of 97%, which exceeds the Budapest average. In addition, the interest income realized on free funds in the current interest rate environment and the exchange rate difference accounted due to current period strengthening of the forint, also have a significant effect on profit, according to the executive summary of the report.

Contrary to our earlier cautious expectations, even in the uncertain economic environment, there were no significant requests from the tenants to reduce the area in the current year, and the area reduction of some tenants was largely compensated by the growth of other tenants. The research and development work involving a high degree of creativity and intensive cooperation do not exist without personal presence, at least partially, so the rented areas did not significantly decrease.

In the case of companies renting in Graphisoft Park, employing mostly technology- and knowledge-based, highly qualified employees, personnel costs still make up the most significant part of the total costs. Thus, the rental fees and the increased utility costs because of the energy crisis represent only a small proportion of the total cost structure for most tenants. In the first half of 2023, world energy market prices calmed down after the drastic jump that occurred last fall, and in cooperation with the tenants, focusing on efficient building management and conscious energy consumption, significant savings were achieved in both gas and electricity consumption compared to the same period of the previous year.

The Company is currently evaluating the 2022 carbon footprint calculation and developing the ESG strategy with the involvement of experts. The main pillars of the strategy will be the determination of renovation and modernization programs to help achieve the decarbonization goals, as well as the further encouragement, continuous maintenance, and support of conscious energy consumption.

Based on the considerably better-than-expected first half results and expectations for the rest of the year, the company amends its previous forecast for the year 2023: we expect rental revenue to be EUR 400,000 higher than previously published, and pro forma net profit to be approximately EUR 500,000 higher. The expected rental revenue of EUR 16.7 million calculated in this way represents a 7.5% increase, and the proforma net result of EUR 6.8 million represents an increase of nearly 13% compared to the previous year.