According to the Interim Management Report by Graphisoft Park, the company managing an industrial park primarily occupied by offices and laboratories of information technology and biotechnology companies in the north of Budapest, the 2021 H1 pro-forma net results, in line with the previously published forecasts, are EUR 2.45 million, which is nearly EUR 310 thousand higher than the same period of prior year.
The report adds that the epidemic caused by the COVID-19 virus resulted in a protracted economic downturn, while the Park’s tenant base, remained stable. Utilization of office space after a slight decline in the previous year stabilized at 94% from 2020 Q4, while in 2021 Q2 the average vacancy rate in Budapest continued to rise, partly due to the growing office supply. The transformation of office use and the rise of the ‘home office’ caused by the coronavirus has a noticeable impact on the demand for offices, however, no significant space reduction needs have arisen among Graphisoft Park tenants so far, and smaller reductions have allowed to meet growth needs of other tenants.
International statistics show that working from home, despite all its benefits, results in lower productivity than creative teamwork with a personal presence, according to the document. At the same time, it is a new challenge for many employers to lure workers back to work after the abolition of the mandatory stay at home, and in particular the increasing employee turnover in this context, which is an incredibly high loss for companies at the forefront of innovation. In the Park, on the other hand, the experience is that after closure, most employees are happy to return to work in a working environment dominated by airy, open spaces and a green environment, which also allows them to meet the new requirement of social distance. This also proves that the architectural concept works, continuing to ensure the profitable operation of the Company.
Based on the company’s calculations, it continues to maintain the previously published forecast for 2021: considering the current level of occupancy, the expected development of operating costs and depreciation, and the level of interest payable on existing loans, Graphisoft Park expects EUR 14.5 million rental income and EUR 4.3 million pro forma result.
In June 2021, based on a resolution of the Board of Directors acting on behalf of the General Meeting, a dividend of approximately EUR 10 million was paid out, which meant an additional dividend of EUR 6 million from the available funds in addition to the EUR 4 million dividend corresponding to 90% of the 2020 pro forma net profit.
The cash from operations and the remaining available cash balance (around EUR 9 million at the end of the period) ensure the further safe operation of the Company, as well as the financing of the preparation of certain refurbishments requested by tenants and potential future developments.
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