Merlin Properties increases its profit by 44% despite its offices and shopping centers
This net accounting profit of 55.7 million euros, which represents an increase of 44.3%, is produced by the variation in the fair value of financial instruments and lower debt costs. Ebitda fell to 87.9 million (15.5% less) and working capital fell 15.3% to 63.3 million.
The Socimi qualifies the performance of the logistics activity as “excellent”After signing the contract for more than 143,000 square meters, including new projects, as well as more than 70,000 square meters in rentals, now expecting a “full occupation” of these logistics assets at the end of the year.
On the contrary, the strong destruction of employment registered throughout the country in the last year has caused that the office segment places its occupancy below 90% and that their incomes have fallen by about 3% due to the increase in vacant assets and the negative indexation of the CPI.
For its part, its shopping centers have suffered a 2.9% drop in rents, affected by the 40% drop in the influx of customers since the outbreak of the coronavirus crisis, after the application of strong restrictions on mobility. Even so, the company has applied a policy of subsidies and bonuses to the tenants of its shopping centers valued at 11.6 million euros, which has meant keeping the effort rate at “very healthy” levels, according to Merlin Properties in its Income statement, with a slight improvement in sales in the first quarter of the year compared to the final stretch of 2020.
Merlin Properties also admits that, despite the fact that the level of charges continues to be high, some tenants of its shopping centers “are beginning to reach the limit” due to the prolonged negative effect of Covid-19 on their activity. In this context, rental income in all its business areas stood at 124.6 million euros, 4.5% less, at the same time that gross operating profit (Ebitda) was 87.9 million euros. euros, 15.5% lower than in the first quarter of 2020, a period in which only half a month was affected by the pandemic.
A “very solid” balance
Despite the fact that operating profit fell by 15.3% in the first three months of the year, to 63.3 million euros, the company plans to exceed the estimates initially made for the year as a whole, whenever the activity is registering a normalization throughout the year.
In the meantime, Merlin defends facing the short and medium term with a “very solid” balance sheet and a liquidity position of 1,291 million euros, while continuing to reduce its level of indebtedness to 39.7%, with a net financial debt of 5,230 million euros. In addition, only 5% of its contracts expire this year, adding new assets to its portfolio that will ensure additional revenues of 14 million. The company will not face any debt maturity during this year either.