Profitable Start to the Year at Duna House Group

In the first quarter of 2021, the real estate business Duna House Group has significantly improved its profitability, while its EBITDA (earnings before interest, taxes, depreciation, and amortization) to sales ratio increased to 17%, while its clean core EBITDA reached HUF 471 million, which is 27% higher than in Q1 2020.

A report on the website of the Budapest Stock Exchange says its consolidated EBITDA was HUF 433 million, which exceeded the same period in 2020 by 18%.

The Group’ consolidated after-tax profit has increased by 9% to HUF 289 million. The after-tax profit growth rate has lagged behind the EBITDA growth rate due to FX losses on foreign currency movements and higher interest costs due to the bond issue. Due to these items financial result decreased by nearly HUF 90 million compared to the same period in 2020.

In the first quarter of 2021, the main driving force was the real estate brokerage, with commission volumes up by 30% in Hungary and 60% in Poland, both in franchise and own-agency brokerage. The combined EBITDA contribution of these two businesses have risen from HUF 97 million to HUF 245 million in Q1 2021 compared to last year (+150% y/y). The residential property market in Hungary started the year at levels which were not seen for 10 years. The outstanding activity in the market is partly due to the emergence of state family support programs and the changing demand due to COVID-19.

Intermediated loan volumes have risen by 6% to HUF 73.6 bn during this quarter, mostly driven by the 8% Polish expansion. In Hungary due to protracted loan application processes, volumes stagnated despite the strong demand. Since January 2021, the level of loan applications managed by the Group significantly exceeded the levels of 2020, thus further volume growth is expected in the coming quarter. The segment’s quarterly EBITDA generation decreased by 10% to HUF 200 million, due to the changing composition effects and business development activity which resulted in higher operating costs.

Within the MyCity real estate development business, the Forest Hill project continues to be delayed due to COVID19 pandemic, labor shortages, rising construction and material prices and raw material shortages, a situation, which the project company considers force majeure. To partially compensate for the increased costs, the entity has implemented a price adjustment in Q2 2021.