LAMDA Development S.A. (LAMDA) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. I'm Vassilios, your Chorus Call operator. Welcome, and thank you for joining the LAMDA Development conference call and live webcast to present and discuss the full year 2025 financial results. [Operator Instructions] The conference is being recorded. [Operator Instructions] Please note that the presentation slides are in manual format. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Odisseas Athanasiou, CEO. Mr. Athanasiou, you may now proceed.

Thank you. Good afternoon to all of you, and thank you for your attendance here, and good morning to those of you attending from the United States. I would say, first of all, that overall, this was a very good year in terms of financials and in terms of progress in all fronts. Our bottom line of net result of more than EUR 90 million, was almost double our result of last year. Our NAV exceeded EUR 1.5 billion. And our portfolio value has approached the mark of EUR 4 billion. EBITDA was also pretty impressive, and we finally got some valuation gains from the good performance of our malls. To be noted over the last years, we hadn't seen the drop in the yields that was supposed to accompany the drop in the European interest rates. This year, we saw a part of it to be bridged, and we expect further gains unless something extraordinary happens, we expect further gains in the valuation of our malls in '26. Apart from the overall significant results, we saw an even improvement in our results in our investment assets. Our malls improved by 4%, the EBITDA numbers. And most important is the leading indicators in the malls, which are the sales of the tenants and also the occupancies and also the footfall and the parking revenues are all at record highs, which means that we can sustain our pace of contractual rental increases and at the same time, of course, leading to higher EBITDA. The year has also started well. The first 2 months of the year have a positive result again after 7 consecutive record years. So we remain optimistic about the performance of the 4 operational malls. Regarding the other investment assets, which is the Marinas, we also saw an increase of 6% over last year. And this also has to be noted that this increase came in spite of the Marina Agios Kosmas operating not at full capacity given to the construction works that have started in the Marina, which means that some of the yards had to leave the Marina for the construction works to take place. So investment assets in total bring us an EBITDA on top of EUR 100 million, EUR 90 million from the malls and close to EUR 20 million from the Marinas, both again, are expected to improve in 2026. And now we can pass to the Ellinikon, starting with the 2 malls we are developing in Ellinikon. The commercial agreements are going well as they've been going over the last 1.5 years. There's a lot of demand. Construction is progressing on the Riviera Galleria. This is a mall on the Marina Flisvos, Kosmas with expecting date end of '26, beginning of '27, and opening sometime around Easter time, spring time of '27. Regarding the Vouliagmenis Mall, we're expecting the permit to be signed by the [ Communicating ] Ministry for works to start. The lease agreements are also progressing there, and we expect this mall to open sometime end of '28, beginning Q1 of '29. Apart from the malls, progress is seen in the infrastructure front. As you know, the Riviera Tower and infrastructure were the 2 fronts where we had most challenges, either in cost increases or in delays. In infrastructure, we see more and more progress. AVAX is performing their performance. And we expect all infrastructure works associated with the residentials, we are going to hand over to buyers to be complete, so the buyers can, of course, move to their new apartments throughout 2027 in the coast line and also in Little Athens. The Riviera Tower is also progressing. The structural work, which means the 50 floors are going to be ready in May, 1 month ahead of the scheduled deadline of June '26. Bouygues is also accelerating works on the remaining main works, which is the fit-outs, the balance dates and the map works. Again, the deadline by Bouygues is May of '27. We hope that by then, by summer of '27 for evidence to start moving in. All the cost increases in the Riviera Tower have been reflected in our financial statements, incorporating the latest contract signed with Bouygues, the same for AVAX. Apart from infrastructure and the Riviera Tower, the construction works in the -- in all residential developments in the Little Athens that are coordinated by our construction unit, the CPU as we call it, are doing better than scheduled and better than budget. So after getting some, I would say, lessons learned from the coastal work, the Riviera Tower and other residentials, which didn't give us much profit, didn't have margins, and we also had all the challenges of constructions and delays. It seems that now on the pace, thanks to our internal construction unit that comes in direct communication with subcontractors. And again, in both fronts, meaning budget and schedule, we are doing better in all main works -- sorry, in all early works that have been completed and also in the early works that have started in couple of our developments in Little Athens. Commercial momentum continues to be strong, although we didn't have many apartments coming to the market due to the change in the NOC after the decision of the Council of State at the beginning of 2025. However, now we're going to have more apartments in half of 2026. Again, demand is strong and remains strong. We also have good news in the sports park development. We expect 4 soccer stadiums, track and field, thing stadium and also 2 tennis and 2 basketball courts to be given to the public in summer of '26. So it's very likely that people will be able to come and do their sports in Ellinikon. And this is going to be also a social dividend much expected by people in the neighboring areas and in Africa in general. The educational projects are also progressing with [indiscernible] expected to start operations in fall of '27. Same for the University of Nicosia, they have completed their designs, and they will start work soon, so they can open the university -- the first private university in Greece in fall of '28. In the Riviera Tower, I will also give you a milestone of the 44th floor, which is completed. So we have started invoicing the EUR 60 million installment that would accompany the fulfillment of this milestone, the 44th floor. And as we said, 50 floors, which are expected to be completed by May. In May. We also had the successful completion of a land plot sales tender for 16,000 square meters GFA at EUR 2,650 per square meter. This is another good news. So all tenders regarding land plots have been completed. Due diligence with Ellinikon is completed, and we have started working on the SPAs, and we hope in the next months, it's also going to be completed. Costs are under control overall. And I think this covers the picture for how Ellinikon is doing overall. Last but not least, the financial situation of the company is pretty strong. At the end of the year, we had EUR 800 million cash. And also, the LTV ratios are very healthy. The net LTV is close to 20% with borrowings at EUR 1.5 billion and net borrowings, given the cash we have at EUR 660 million. All these numbers are end of the year numbers and remain strong. We haven't used much of the debt except for the Riviera Galleria development. Other than this, we haven't got any loans used in Ellinikon. And finally, as I said, net asset value has exceeded EUR 1.5 billion, it's EUR 550 million for a net asset value per share of EUR 9.1 per share. I think this covers overall the picture for Ellinikon. Now we'll pass to Harris, our CFO, who is going to give you a more detailed picture of our financials. And then we can have -- after the post, we have a Q&A session. Thank you.

Thank you, Odisseas, and good evening, good morning to all from my side as well. I will provide more color on our full year 2025 results with a deeper look of the financial highlights across the group's 3 main business segments: Malls, Marinas and Ellinikon. And at the end, I will comment the most important figures at group level. Analyzing each of our business segments and starting with LAMDA Malls. Our 4 operating malls delivered another record performance with operating EBITDA reaching EUR 89.7 million. Operating malls EBITDA adjusted for EUR 6.2 million of intra-group charges was EUR 95.9 million or 4% higher year-on-year. This strong result was primarily driven by a 6% year-on-year increase in base rents and a 10% increase in parking revenues for the same period. Performance was supported by growth in both our key leading business indicators, namely a 2% increase in footfall and a new all-time high in tenant sales, which reached EUR 910 million in 2025. Regarding our new malls under development, concrete works at Riviera Galleria have been completed, while electromechanical installations, partitioning and facade works are progressing well. At the Ellinikon Mall, excavation works have been completed and the structural works contract has been awarded to TERNA. As of December 2025, the total gross asset value of the LAMDA Malls subgroup reached EUR 1.8 billion with the value of our 4 operating malls reaching a new record high of EUR 1.4 billion. For a detailed analysis of LAMDA Mall's financial results, please refer to Slides 14 to 18 of the results presentation. Moving now to the Marinas segment. It continued its strong growth trajectory, achieving record results in 2025 with EBITDA growing by 6% year-on-year to EUR 20.6 million. This strong performance was primarily supported by sustained demand for our available BEVs, complemented by higher revenue from [indiscernible] transits and annual contractual fee uplifts. At Agios Kosmas Marinas, as Odisseas has mentioned, a phased reduction of available BEVs is currently taking place as part of an extensive redevelopment program designed to significantly upgrade infrastructure and services while reconfiguring the layouts to accommodate larger vessels. Upon completion, Agios Kosmas Marina, together with the adjacent Riviera Galleria, a landmark destination for premium brands is expected to serve as a key driver of incremental revenue growth for the group. Details on Marinas performance are available on Slide 19. Let me now turn to the Landmark Link project and highlight its key achievements to date. As of end of February 2026, 571 out of the 671 residential units launched in the Little Athens neighborhood have been sold or reserved. This represents an absorption rate of 85%. Revenue from residential developments in 2025 reached EUR 291 million, a 96% increase versus 2024, underpinning the significant contribution of residential developments in our results as construction progress continues. Moreover, during 2025, EUR 105 million worth of revenues from property sales have been also recognized. As a result of this overall commercial success, total cash proceeds from sales and leases since project launched back in 2021 and up to February 2026 have surpassed the milestone of EUR 1.5 billion. Details on cash collections are available on Slide 21. Construction projects has accelerated also, registering an increase of over EUR 500 million during 2025, bringing the total CapEx for buildings and infrastructure works from the start of the project and until February 2026 to EUR 1.1 billion. It is worth mentioning that following a revision of our business plan, projects profitability for Q4 2025 was negatively affected by approximately EUR 30 million because of the revision of infrastructure and residential CapEx cost estimates which based on IFRS take effect retroactively based on each project's percentage of completion to date. Further details are shown on Slides 23 and 26. Closing my remarks, at group level, consolidated EBITDA after valuations reached EUR 254 million in 2025, 29% growth versus '24, impacted by the positive operating results in all our business segments as we analyzed and the positive impact from valuation gains as explained by the sales in our previous results calls. Furthermore, consolidated net profit reached EUR 91 million for the group in 2025, almost 2x higher versus prior year. Details on EBITDA and net profit breakdown are shown on Slides 8 to 10. The group's total investment portfolio reached EUR 3.8 billion on December 31, 2025, up from EUR 3.5 billion same period 2024, mainly supported by yield compression in our malls business. Finally, group cash remains at strong levels with EUR 804 million reported as of end of December '25, following the repayment of the EUR 230 million green bond in July '25 and the successful issuance of our new EUR 500 million bond in November '25. And with that, we conclude the key highlights of our full year '25 results, and we are open the floor to questions. Thank you very much.

[Operator Instructions] The first question comes from the line of Svyriadi Natalia with Eurobank Equities.

I have a couple. I would like to start maybe with the Ellinikon. And I was wondering if you could give us a brief overview of the projects we should be expecting in 2026, the rollout progress. I see you have cash proceeds expectations for EUR 550 million, if I calculate it correct, and CapEx around the same level for 2026. So I was wondering if you give us which projects we should be expecting and what new things are we looking for in 2026 from Ellinikon?

Sure. Natalia, I'll take that first one. In terms of projects coming online, we have recently launched about 110 units in December, and those are going to be sort of selling through 2026. And we expect to put in the market through 2026, an additional approximately 300 to 330 units in the market, again over time. And I think one thing to mention there is that although the velocity of sales for -- since the last reporting period was slow due to the holidays and the availability of apartments, what we are seeing going forward is from 60 units that were placed into the market, approximately 50% of them are getting very close to getting reservation agreements. And therefore, that demand is ongoing, and we remain very positive for the remainder of the year.

Okay. And these units are kind of mainstream units, I assume with a higher level of, I don't know, per case sales probably.

Correct. Correct. Mainstream -- more mainstream than the other ones. And I think that the most interesting thing here is obviously that a lot of them are being done with the CBU. So we do anticipate better margins for them due to the fact that they are being done with the CBU that has had a very good track record, and they are more simple in construction.

Yes. Okay. Yes. My second question had to do with the margins and where would we be expecting them going ahead probably. We have behind us the lower part, and we have a better margin, if I understand correctly, as we're looking ahead from these projects.

That is correct.

Okay. Great. Well, I have 2 more. Just for the performance, a brief overview of the performance of LAMDA Malls, we said for 2026. I think Mr. Athanasiou mentioned, he's optimistic. What does this translate to? Just in terms of a gross figure, what are we looking for 2% or 5% growth and the same for the Marinas performance and when I guess Kosmas will start with the new rent?

Right. On the mall side, I would say that probably something north of 3%, unless something extraordinary happens should be expected on the EBITDA side. And on the Mina side, it's hard to predict exactly because we don't know the time line of the return of the yards that have left the Marina who are following a rotational program on who is leaving and who is coming based on the time line of works. So I would prefer not to give a number for both Marinas. For Clear Marina, which is operating normally, I would say that probably a 3% to 4% increase should be expected.

Very helpful. Will refurbishment in [indiscernible] finish by year-end? Or would we be looking for 2027 also? Do you have a time line for this or...

Yes. We're looking at '27 along with the closure with the opening of the Riviera Galleria.

Galleria, oh yes.

Summer of '27 is going to be a summer where people can shop and many of them can have their yards in the mine Agios Kosmas.

[Operator Instructions] This does conclude the Q&A session. Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a good evening.