Marvipol Development 4Q23E Results Preview: Anticipated Negative Outcomes Reflecting Project Schedules and Delivery Challenges
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4Q23E Results Preview
Opinion: Negative, however expected as the developer has already reported that it delivered only 5 dwellings in 4Q23 (we note that the management board had informed about the project schedules earlier). Thus, we anticipate that Marvipol Development will report poor 4Q23 results, including: 1) revenues of PLN 11.1m (- 94% y/y), 2) EBITDA loss of PLN 3.5m, and 3) a net loss of PLN 14.9m (vs. profit of PLN 17.0m in 4Q22; 4Q23 numbers additionally downgraded by negative FX differences).
We point to a very strong growth in number of pre-sold dwellings in 4Q23E. The group has already informed that it had pre-sold 200 apartments, in comparison with 55 units in 4Q22. The result was driven by a demand recovery and an offer extension, which should be continued in coming months.
Pre-sales: The company reported pre-sales of 200 units in 4Q23 (+264% y/y and - 6% q/q; the value of units sold amounted to PLN 135.1m, implying average value of ca. PLN 675.5k). As a reminder, the company had dwelling offer of 528 units as of end-3Q23.
Deliveries: At the same time, the company delivered 5 units (vs. 296 flats in 4Q22; with value of PLN 10.2m).
Revenues: We estimate that revenues arrived at PLN 11.1m (-94% y/y), which is broadly in line with company’s current report, driven mainly by a significantly lower number of handed over apartments.
Gross margin: Given the above-mentioned, we expect gross margin to arrive at 34.4% (vs. 28.5% in 4Q22 and 37.2% in 3Q23).
EBITDA: We assume that the company will report ca. PLN 9.8m in SG&A costs (vs. PLN 13.2m in 4Q22). Thus, EBITDA loss could come in at PLN 3.5m. We predict that profit on sales could reach PLN -6.0m (vs. PLN 37.2m in 4Q22).
Net profit: We expect that net financial loss amounted to PLN 12.3m, vs PLN - 10.1m in 4Q22. Thus, the net loss should arrive at PLN 14.9m (vs. profit of PLN 17.0m in 4Q22).
