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

Ladies and gentleman, thank you for standing by. I am Gaily, your Chorus Call operator. Welcome, and thank you for joining the LAMDA Development conference call and my webcast to present and discuss the first half 2026 financial results. [Operator Instructions] Please note that the presentation and slides are in manual format. Each participant can access and view individual sizes as they wish. At this time, I would like to turn the conference over to Mr. Apostolos Fallas, Chief Strategy and IR. Mr. Zafolias, you may now proceed.

Thank you. Good evening, ladies and gentlemen, and thank you for joining us today as we discuss the financial results for the first half of 2026. The first half reflected strong momentum across our operating assets. The retail destinations continued their strong performance, setting new records while Fesericorted growth of 10%. At the same time, construction works at Alinka continue to progress across all fronts with significant milestones being achieved as the development moves to its delivery phase. Results from the Elition were negatively impacted primarily as a result of timing, including the timing of land plot sales and expenses related to the infrastructure works whose progress has accelerated. Speaking of Marco today is the official opening of the Elanco Sports Park, marking the delivery of another major project at the linac to the community and kicking off the project delivery phase in bringing the development life. The Sports Park had already successfully hosted the super special stage of the 2026 Acropolis rally earlier this year, offering a first glimpse of the role it will play within the wider development. Looking ahead, the major development scheduled to open their doors to the public in 2027 or the Vageria, 1 of our 2 shopping destinations in the Indigo. The renovated Ilocos Marina, and at the same time, several residential developments, both along the coastal front and in the little Latin neighborhood, continue to progress toward delivery with estimated completion dates in the first quarter of 2027 and continuing through the end of the year. The acceleration of construction activity across the Albion supported by strong cash profits from property sales which continue to fund the advancement of works across the development. As construction progresses simultaneously across residential neighborhoods, infrastructure, sports facilities, the park and other key components. Our focus remains firmly on disciplined execution, the pursuit of continuous improvement in cost efficiencies and the delivery of projects to the highest quality standards, which will create long-term value for our shareholders. Regarding the transaction with Ion, discussions continue to progress with both parties working closely to align the remaining key commercial matters with the shared objective of reaching an agreement that creates value and benefits for both parties. Within the next month, the party are expected to complete negotiations in the key commercial markets, and I have a clear view as to the finalization of the transaction. subject to the successful outcome of these negotiations, we target completion during the fourth quarter of this year. During the first half, we also strengthened our capital structure and financial position. Following the successful EUR 500 million bond issuance in November of last year, we also completed a further EUR 350 million of bond issuance in June, which attracted strong investor demand and further demonstrated the market's confidence in LAMDA and Belineco. These transactions have extended our net maturity profile while allowing us to maintain a competitive cost of funding during a time of volatility and potentially a higher interest rate environment. With strong liquidity and low leverage, we have a solid financial foundation to support the next phase of the development. Our priority remains a consistent execution of our brands, the pursuit of cost efficiencies and the delivery of our projects to the highest standards. progress of development of construction advanced, revenues from property sales were lower year-on-year. That was mainly reflecting, as I mentioned before, the timing of land flow transactions, which will be partially reversed with potential units in July of 2026. With this, I will hand it over to.

Thank you, Apostolos and good evening to everyone from my side as well. the precise that you can find in our website. I will begin with an overview of the group's key highlights. Then I will provide a more detailed review of the performance for our 3 core business segments, namely Mols Marinas now closed the income. Starting at group level, total revenues reached $265 million in the first half of 2026, primarily reflecting growing contribution from residential development and income as well as the continued strong operating performance of our recurring income generating more and Marinas assets. Fundamentals behind our revenue growth remains strong since the 20% drop or EUR 48 million less revenues compared to same period last year is fully attributed to the timing of a living on land plot sales. We remind that last year, we had $104 million worth of club sales, while this year, only EUR 15 million. Group consolidated EBITDA reached EUR 22 million, also reflecting the impact from the acceleration of construction and infrastructure works at income transitions from -- to its delivery phase. This increased level of investment affects our current results, but this fundamental to advancing the development and delivering the significant pipeline of projects currently under construction. The date of EBITDA and net results breakdown as shown on Slides 8 to 10. The value of group's total invested portfolio reached EUR 3.9 billion as of 30 of June 2026, driven by all asset categories in our portfolio, reflecting continued value creation. Furthermore, total group cash remained at a particularly strong level, exceeding EUR 1 billion as of the end of June 2026. The reported cash position includes the proceeds from the recently successful EUR 350 million bond issuance, while the subsequent repayment of the group's bond is not reflecting the half 1 results due to the timing of the transaction. Just to remind that we repaid this bond in July. The successful refinancing center optimizes our funding profile extends our bond maturities and importantly, the friends are strong and convenient access to the capital markets. Also, it is worth pointing out that in the current turbulent macroeconomic environment, our sensible hedging strategy protects us from potential further interest increase since 75% of our group borrowings, if we adjust for the EUR 320 million early bond repayment in July, as I mentioned, are under hedged or fixed terms and analyzing each of the business segments now and starting with land Malls, our 4 operating most reported EBITDA, reaching EUR 46.6 million in Half '26 more EBITDA, adjusted for EUR 3.4 million worth of Intracorecharges was EUR 50 million or 5% higher year-on-year. This is the true underlying performance that 1 should consider. This result was primarily driven by a 6% year-on-year increase in base rents and 9% increase impacting the revenues for the same period. Performance was supported by a 5% increase in footfall versus half 125 and a new all-time high internal sales, which reached 40 million in half 1 2026. Revaluation gains for our malls amounted to EUR 83.2 million in half 1 2026, compared with EUR 36.9 million in the same period last year. The underlying value of our retail destinations continued its upward trajectory, generating significant valuation gains also in 2026. However, revaluation gains were lower year-on-year as half 5 has benefited from significant yield compression supported by the favorable macroeconomic environment at that time, representing 73% of the GLA at the Linamar and 76% at the garage area. This strong momentum highlights the solid fundamental of the Greek retail might and the continued interest from leading international brands in this landmark development. Concrete works at trivia Galleria have been completed with electromechanical installations, facade, Canopy works, internal partitioning as well as external works and roof insulation currently under progress. Total completion is expected within the first quarter of 2027. At the Hellinikon Mall, following the award of the structural framework construction contracts to Terna Work commenced in Q2 2026 when fountation works currently progressing well. As of June 30, 2026, the total gross asset value of Lonca Mars Group reached a new record high of EUR 1.9 billion with the value of the 4 operating malls surpassing EUR 1.4 billion. For retail analysis of Lada more financial results, please refer to Slide 14 to 18 of the results presentation. Moving now to our Marinas business unit. Please Mos Marina continued its strong growth trajectory, achieving a new record performance in the first half of 2026. Total revenue for Rismadina reached EUR 13.9 million while EBITDA grew by 10% year-on-year to EUR 9.3 million, outpacing revenue growth. Performance was supported by sustained high demand for Flisvos Marina higher revenue from transit and manual contractual fee uplifts as well add lease expenses. While Fleet Marina continues to deliver strong operating performance. The group is investing in the next phase of growth through the comprehensive redevelopment of icosema Marina available bets have now been reduced to approximately 1/3 for this Marina reflecting the temporary removal of vessels to allow further innovation works and the reconfiguration of Ages Cosma Marina to accommodate larger vessels. We expect innovation works to finish by Q2 2027. Returns on Marina performance. some of each key achievements during the period. Commercial demand for the little asset neighbor remains strong as of the end of August 2026, 610 out of the 750 units launched have been sold or reserved, representing an absorption rate of 81% that also Poso mentioned. Coming from the business development in half 12026 reached EUR 164 million or a 30% increase versus half 12025 showcasing the sustained strength of residential sales and the growing contribution of these residential developments in our results. In addition, during the first half -- during the first half of 2026, we recognized a further $15 million worth of revenue from property sales, mainly office spaces compared with EUR 104 million in half 125 with a year-on-year decrease, reflecting the timing of last lot sales that I mentioned at the open of my speech. As a result, cumulative cash proceeds from residential sales and long-term lease agreements have exceeded the EUR 1.8 billion milestone from the launch of income back in mid-2021 and until the end of 2026. Details on and link on cash collections are available on Slide 21. Construction progress has accelerated registering an increase of EUR 276 million during half 1 '20 26, 52% higher versus same period last year, bringing the total CapEx for buildings and infrastructure works from the start of the project and until June 2026 to EUR 1.3 billion. Finally, total CapEx deployment remains on track. Based on our current construction schedule, we remain confident in achieving our full year 2020 CapEx target of approximately $1.6 million. First days on the CapEx absorption as shown on Slides 23 and 26. And with that, we conclude the key highlights of our first half 2026 financial results and we'll be happy to answer any of your questions.

[Operator Instructions] The first question is from the line of Natalia Svyrou Svyriadi with EuroBank Equities.

I was I was wondering, you said you're confident on your CapEx. That was the last thing you just mentioned for the full year. What about your cash target, the EUR 2 billion we are anticipated in cash collection. By year-end, we're already at 1.8%. So is something feasible to expect by year-end with the residential sales? Do you have any other land plots considering to sell? That is 1 question. And I was wondering also if you could give us some rollout plan for 20 on other units. What -- and remind us what we are expecting or actually update us when we're expecting in the line confer in 2027. I see some projects are noted in the presentation post 2028 completion, just a few of them. But what we are expecting in 2027, I think is important to know.

Let me start with -- I think your first question was in regards to CapEx, what and cash collection. Yes. Sorry, yes, CapEx and cash collections. Look, on both of them, we feel confident that we're going to hit our targets through the end of the year. On cash collections, specifically, I think we've done sorry, cash collections, I think we've done $350 million year-to-date, and we expect about $600 million for the full year. As I mentioned on the call in regards to landlord sales, we've already signed and announced 1 additional. Well, 2 additional land plot sales for the total value of EUR 41.5 million. And the recognition of that will be towards the end of the year, beginning of next. The -- sorry, your second question, I think, related to units launched to date and an update on what's coming next. So we've launched a total of 1,065 units to date. That includes the 315 units of coastal front and the 710 units of little opens. the expectation going forward is the launch of an additional circa 50 units, fairly close by. And then the balance is about 200 units that basically come to a round out Phase 1, if you wish. That should get you to about 1,300 units. I forgot the last question.

Well, what else are we expecting rollouts in 2027, actually in the linac. The sports park is opening now. Riverdale will be delivered in 2027, correct?

Yes. So I think -- yes, that's right. The sports cycle opening now Riviera area and the Marina are scheduled to sort of be at about the same time and call it, construction completion, probably Q1, Q2 of 2027 and then opening for the Rivigaleria is going to be second half of 2027. Thereafter -- well, actually, -- at the same time, you're going to have construction completion for a number of the residential development starting in the beginning of 20 and going through the year. So I think that that deliveries are going to start rolling through the second half of 2027 onwards with a number of the little assets projects as well.

Okay. Great. This is a view on Linio. Can I have 1 more question? I was -- I wanted to -- if you have a broader view, actually, what would you say, the key risks you're facing at this moment in the current setting, geopolitics and financing and everything taking into consideration. What do you feel that is more challenging at this time?

Well, look, I think that, obviously, we are in a very turbulent, should I say, volatile macroeconomic environment, it's a little bit hard to predict those things. On the cost side, I would say that the biggest risk is what could the side effects be of higher energy prices, which are a portion of the construction cost. On the positive side, I would say that the labor issue, which was a very big issue last year, has gotten a bit better. So that may offset some of any potential additional costs from energy. And look, then more macro level, I think that interest rates obviously play a big factor in valuations and/or on costs. Thankfully, as Harris mentioned during the call, -- we did 2 big bonds in end of 2025 and into 2026, raising EUR 850 million, up 4%. So a very favorable rate fixed, and generally speaking, about 80% of our debt outstanding is either fixed or hedged with interest rate swaps or caps. So it provides quite a bit of protection on that front.

Okay. Great. Yes, I think that answers my question. And 8% hedging is good at the answer of this period. So thank you very much. I'll let anybody else make a question maybe.

The next question is from the line of Jakub Caithaml with Wood & Co.

This is Jakub from Wood. I wanted to ask 2 questions. One on the ion land sale. I understood correctly, we should have better visibility whether the deal is there or not within the next month. If there is no deal, are there any financial report options? Is there any fee attached to that 1 may receive?n My second question on the margins in Elanco in the second quarter, the accedence of land sales as to have a closer look on the gross profit margins generated by the projects which are currently in progress on little items and coresidences. Could you remind us -- where are we in terms of percentage of completion? And so far, based on the sales which are well done and based on the where the budgets are shaping up? What kind of all in gross profit margin, including the land, including the associated infra. Do you expect these 2 projects could generate.

Sure. Let me start with a question about the Ion transaction. Look, basically, as I said, yes, we are negotiating through key commercial issues. And we are going to have -- you said it right, you as a finalization of the transaction within the next month or so. I think you asked about a fee. There hasn't been any fees paid, so there is no direct financial fee that needs to be returned or anything like that, if that was your question. In regards to the margin, I guess could.