Star Invest Imobiliare S.a. (REIT) Earnings Call Transcript & Summary

[Audio Gap] [Operator Instructions] And I would like to introduce David Canta, CEO; and Adrian Tanase, CFO. I request Mr. Adrian Tanase the presentation.

Everything is alright? Can you hear me? As of quarterly basis, we'll have this presentation to explain the financial results every quarter. We are talking about 1st half of the 2026. This was confirmed the strategy that we hold. We announced this own assets from our portfolio. And if we did not finish in the first half at the 31st of July, we gained the assets of that, of course, the share increase was successfully completed for. And the deal is closed and we will take the accounting where are the owners... It is visible in the first half in the balance sheet -- in the balance of July. It's not public, but it will be visible in Q3. [indiscernible] of course, we had the financial assets -- the deal, and what we can say is another palpable proof that we being -- we moved -- works of the acceptance of the CapEx and these works are underway, and we hope to finish them during October. We're optimistic about that. Of course, we will organize an event with our clients, investors to visit this project. And this will look -- to that, of course, after the modernization... The first half, of course, came also with this particularity that we would like to explain as well as we can to the investors about the Romanian accounting standard that do not allow a treatment for companies that may trade with their own assets for these -- as the IFRS where you can see the profit of the acquisition. And due to that, as mentioned in the first part of the year, we sold the assets that we had at the end of 2025, which [indiscernible] From the land perspective, the sale had this accounting loss from the P&L perspective, the price that we report as a cost of the assets sold is the price of the last valuation, not the acquisition one. So we can see we had EUR 3.6 million, the last valuation, and we sold at EUR 3.2 million. So there is an accounting loss of EUR 1 million. The other EUR 1 million amount to are operational losses that we incurred in the first with lawyers, with the brokers, so we had under EUR [ 200,000 ]. So this is how we justify this accounting loss. But in reality, we had a profit as compared to the profit of EUR 1 million. So we had EUR 2 million acquisition -- EUR 2.2 million was the acquisition. We lost -- we sold at EUR 3.2 million. So we had a profit of EUR 1 million. That -- we will find in our balance sheet. You can find it at the end of the report and the position of profits carried forward, we have this result -- this profit that was realized as opposed to the acquisition price. From our perspective, we need to look at the profit of the exercise. And of course, the budget -- looking at the budgeted figures, we have EUR 700,000 profit. We looked -- when compared with the acquisition price, we didn't believe that we will sell this land with EUR 3.2 million. So we can say it was above what we budgeted. And another validation of what I'm stating, if there was a loss, we wouldn't have a profit tax and this we have 16% of the 1 million profit that we made from selling the land. We always distribute the dividend, not only the accounting profit under RAS, we also distribute the EUR 2.2 million on the acquisition. And you can see from last year, the largest share of the EUR 3 million was a result carried forward. Because we all -- we had the same situation. So it was the actual profit as compared to the acquisition price as compared with the contribution in capital, you can see it in the P&L. I hope this is clear. And once we go to IFRS reporting, of course, we will have other standards and other mechanisms that can so clear these P&L changes. Through these operations of selling of assets will not be as frequent. We will -- we cannot say that we will sell assets. We are in an accumulation period of these assets. And of course, we will not see figures as this EUR 18 million of revenues from selling assets. Starting the second half, we will have rental revenues mainly. We can anticipate the selling of assets will disappear from our operations, and we will not have such distortions, not only during to RAS, but the P&L will show the reality. This is the last obstacle we have to overcome. The company is not on a loss, it's on a profit. But in -- under RAS, we have to show the state of the financial status. We're trying here to explain what we detailed up to now, how we reevaluate the profits of EUR 1 million via the 1175 balance account that you can find in our balance sheet, in our -- in the result carried forward under the owner's equity share. These are the main elements of the balance sheet. So we have intangible fixed assets. So we had -- for the building, we had EUR 1 million, as we acquired the building, of course, we will see this in the financial assets, starting with the 31st of July. And of course, we have the cash in hand in banks, EUR 7 million in cash, and you can find it in the financial assets side. In Q3, we also have short-term liabilities. We have that profit tax. We had some liabilities to the state. They're not over deal that we will have to pay. And we also have a receivable of EUR 700,000 lay. A large part of the EUR 400,000 we have to cash in. And we also have the to recover on that sale. So the assets went up. Of course, we have a sharing list of EUR 9.2 million that, of course, was positive to this value. We have to summarize what happened with the selling of the land and the acquisition of the building, what we can state in all our communications. So we had an enterprise value of EUR 90 million. So the pricing was really good. So the pricing envisaged on the share deal was of EUR 18 million. So there was no more communication on this topic because we didn't want to provide any other confusions related to this. It was EUR 18 million. I just wanted to underline this figure. Here, we have what happened with our last land that we sold, and we have only one asset in our portfolio. And we will have the financial report to show the existence of this asset at a consolidated level from the rental revenues of this asset. If you have any questions now, let me look in the Q&A section. I don't see any questions. There are no questions at the moment. Do you want to talk about the planning going forward. If there are no questions, we will continue to look in the market for new opportunities, we are very active. We are in the tendering phase for two assets. And we are in advanced negotiations. What we want is that at the end of the year, to have one acquisition. But as it materializes, we will provide details. We will continue our plan to improve our assets. We will go into a very static improvement of the project. So we have the two acceptances. And then we will have some investments of technical orders or the building or the efficiency point of view that in the medium term can lead to a bit more efficient financing and these improvements to be reflected in the revenues that the building... We are going through discussions for the prolongation of the preliminary contracts for the building, as we had up to now or even better conditions, the level of the rent and the visibility, the interest, the attractiveness are quite high with the existing tenants. And this is what we want to state for the month. On the technical side, of course, we want to define the budget to come closer to the reality. Of course, this will be presented in the DMS. We want to select an auditor with a very high reputation that can be next to us during this process. It's not very simple as we are considering in 2027 to the main market. That is a fairly complex process. We're optimistic that we will be able to do this translation. And we will need this audit for 2026 this font in individual and consolidated level as a group. So it's not a very complicated pace. No further questions. I can see from you guys. Thank you for your presentation. Of course, you can find it on the company website, and thank you for participating, and have a nice day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]