Wrap Text
Reviewed condensed consolidated interim financial results for the six months to 31 December 2024
MAS P.L.C.
Registered in Malta
Registration number: C99355
JSE share code: MSP
ISIN: VGG5884M1041
LEI code: 213800T1TZPGQ7HS4Q13
REVIEWED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2024
INTRODUCTION AND BACKGROUND
MAS (hereafter Group or Company) continued to perform strongly in the first half of the 2025 financial year.
MAS achieved Distributable Earnings of 5.09 eurocents per share for the six-month period
(13.1% increase year-on-year). The Group's financial results and progress with strategic matters are detailed in this
commentary.
Unless otherwise stated, amounts included in this commentary are presented with reference to International
Financial Reporting Standards (IFRS) based reported results. Segmental reporting, prepared on a proportionate
consolidated basis, continues to be reported on and included in the Group's financial results, to assist interpretation
of IFRS financial results. Detailed financial results and Company Profile (updated on 31 December 2024), including
highlights and supplemental operational information, are available on MAS' corporate website. This report does
not include information or potential effects of any potential transaction with respect to MAS' investment in the
Development Joint Venture (DJV(1)) with co-investor and developer Prime Kapital.
The Group remains committed to maximising total long-term returns from property investments on a per share basis,
aimed to be achieved by continued focus on capital allocation, operational excellence, sensible leveraging, and cost
efficiency. MAS operates directly-owned income property in Central and Eastern Europe (CEE) and employs capital
in commercial and residential developments owned indirectly via the DJV. Benefiting from the long-term, continual
high growth in consumption in CEE, and leveraging its strong asset prospects and asset management capabilities to
generate robust like-for-like (LFL) net rental income (NRI) growth from retail operations through increasing tenants'
sales and implementing asset management initiatives, as well as its downside-protected exposure to high-quality
commercial and residential developments via DJV, MAS is well positioned to provide its shareholders with best-in-
class total long-term returns.
FINANCIAL RESULTS
The Group generates returns from: (i) directly-owned income property and operations in CEE; (ii) Central and
Eastern European investments with Prime Kapital in DJV (including equity-accounted earnings from its proportion of
completed DJV-owned income properties, net results of residential sales and development activities); (iii) remaining
directly-owned Western European income property, and (iv) investments in financial instruments (including other
elements disclosed as Corporate).
MAS' IFRS earnings for the six months to 31 December 2024 were EUR76.1million, consisting of distributable earnings
of EUR35.0million (EUR31.0million for the six-month period to 31 December 2023) and non-distributable earnings of
EUR41.1million (EUR37.6million for the six-month period to 31 December 2023). IFRS Tangible net asset value (TNAV) on
31 December 2024 was EUR1.78 per share, being a 7.2% increase to the IFRS TNAV of EUR1.66 per share on 30 June 2024,
and 14.1% total shareholders return (TSR) for the trailing 12-months to 31 December 2024.
The Group's good financial performance is the result of several factors impacting MAS' IFRS earnings compared to
the same six months of the previous financial year, including positive outcomes from:
(i) retail properties' exceptional operational performance in CEE, leading to 7.3% like-for-like (LFL) increase in
passing NRI and improved asset valuations, supported by excellent rental and service charge collections;
(ii) increase in the DJV's profits, and MAS' share thereof, resulting mainly from (a) the outstanding performance of
DJV's commercial properties, which led to passing NRI improvements as well as increases in commercial asset
valuations, (b) a return to profitability, albeit small, of the residential business and these gains were somewhat
offset by increases in finance costs mostly relating to additional preferred equity coupon accruals, and
(iii) finance income increases resulting from MAS' additional investments in preferred equity issued by DJV during
the twelve months preceding 31 December 2024.
The above positive variances were partially offset by realised gains on MAS bonds repurchased during the six
months to 31 December 2023 not repeating in the current six-month period, and increases in interest expenditure
due to additional secured debt contracted by the Group in preparation for repayment of its funding commitments,
including the upcoming maturity of the bond in May 2026, net of income derived from placing cash raised in bank
deposits and returns on financial assets.
DEBT, COST OF DEBT AND LIQUIDITY
On 31 December 2024, MAS had EUR182.4million in cash, money market instruments and undrawn credit facilities.
MAS' management has made considerable progress in raising new secured debt finance, having drawn down
EUR90.5million of additional secured debt during the six months to 31 December 2024. The Group also has term sheets
in place for an additional EUR45million of secured debt, subject to documentation being finalised. On 31 January
2025, MAS and DJV concluded the disposal of their respective strip mall assets in Romania, collecting a combined
EUR52.3million, following which the Group's required additional funds to cover its funding commitments to 30 June
2026 decreased to EUR64million. While substantial progress has been achieved to date, and all but one of MAS' directly
held assets have been encumbered, the extent of the remaining shortfall until maturity of the bond requires that, in
absence of the implementation of a potential transaction with respect to MAS' investment in DJV, dividends remain
on hold until at least the 2027 financial year, while further asset disposals are likely.
On 31 December 2024, the Group had EUR563.5million of outstanding debt (bonds and secured bank loans,
EUR475.4millon on 30 June 2024), and its loan-to-value (LTV) ratio was 25.6% on an IFRS consolidated basis (26.3% on
30 June 2024). As a result of the Group having amassed substantial liquidity from secured debt drawn down, MAS
has placed part of its cash in low-volatility, short-term financial investments (money market instruments), which
provide slightly higher yields than bank deposits, and benefit from similar or lower risk exposure. On 31 December
2024, the Group had EUR35.3million invested in fund units, which management treats as 'near cash' instruments for
operational purposes, as these are readily convertible to cash, with a 24-hour notice.
MAS' weighted average cost of debt (WACD) for the period, on an IFRS consolidated basis, remained relatively
constant at 5.55% per annum (5.52% for the financial year to 30 June 2024). Except for MAS' undrawn revolving
credit facility, exposure to interest rates for all secured debt is hedged. The Group hedges its interest rate exposure,
typically via interest rate caps, protecting against future increases in variable EURIBOR rates over loans' terms to
maturity.
The Group's self-imposed, long-term overall debt limit is a maximum LTV ratio of 35%, or, on a forward-looking basis,
six times NRI, which is considerably more restrictive than its covenant tolerances. On 31 December 2024, the Group's
bond and unsecured facility ratios demonstrated satisfactory headroom compared to covenant tolerances, on both
IFRS and proportionate consolidation bases.
Table 1
Tolerance Actual IFRS Actual proportionate consolidation basis
Solvency ratio Shall not exceed 0.6 0.32 0.31
Consolidated coverage ratio At least 2.5:1 3.71 3.70
Adjusted consolidated coverage ratio At least 2.8:1 n/a 2.81
Unencumbered consolidated total assets/
unsecured consolidated total debt Minimum 180% 391% 382%
Unencumbered consolidated total adjusted
assets/unsecured consolidated total debt Minimum 120% n/a 244%
On 31 December 2024, DJV's liquidity comprised EUR30.3million in cash, which was in excess of debt of EUR29.2million,
secured against a single operational commercial property (figures not proportioned with MAS' ordinary interest in
DJV). As a result, DJV benefitted from a negative LTV, as well as substantial secured debt capacity.
FUNDING COMMITMENTS TO DJV
MAS had invested EUR444.7million in preferred equity and had an ongoing undrawn commitment to invest EUR25.3million
in DJV preferred equity, as well as a requirement to provide DJV with a EUR30million revolving credit facility, which was
undrawn on 31 December 2024.
OPERATIONS
Information regarding MAS' Central and Eastern European directly owned assets' LFL footfall and tenants' sales
(compared to the same period in 2023) and collection rates for the six months to 31 December 2024 is detailed in
Table 2. All figures were reported on 26 February 2025.
Table 2
Jul 24 Aug 24 Sep 24 Oct 24 Nov 24 Dec 24 Total
Footfall (2024 compared to 2023) % 104 108 108 106 104 104 105
Open-air malls % 104 111 110 107 104 105 107
Enclosed malls % 103 102 103 103 103 102 103
Tenants' sales per m2 (2024 compared to 2023) % 104 108 109 109 109 108 108
Open-air malls % 106 111 113 112 109 110 110
Enclosed malls % 102 104 105 104 107 105 104
Collection rate % 99.9 99.9 99.9 99.9 99.7 99.6 99.8
Consumption in all Central and Eastern European countries where the Group operates continued its growth trend,
with robust trading and footfall in all Group properties for the six months to 31 December 2024, supporting healthy
occupancy cost ratios at 10.6% (excluding certain tenant categories: supermarkets, DIY stores, entertainment and
services; 10.9% on 31 December 2023). Collection rates were excellent, and occupancy of Central and Eastern
European assets improved to 98% on 31 December 2024 (97.7% on 31 December 2023).
During this period, on a LFL basis, Central and Eastern European tenants' sales continued to be outstanding, and
both open-air malls and enclosed malls outperformed by 10% and 4%, respectively, compared to the same period
in 2023. Notable outperformance of the aggregate was achieved by DIY, shoes, home appliances, entertainment,
home furnishings, services and food service tenant categories. Specialist and pet shop categories have however
performed less admirably.
Passing NRI of the Group's directly-owned properties in CEE increased by 7.3% year-on-year, which is attributable to
rent indexation, rental from overage as well as outstanding rent reversions during the period.
Trading in DJV's operational retail properties, managed by MAS' asset management team, was exceptional during
the six months to 31 December 2024. LFL footfall and tenants' sales improved by 8% and 7%, respectively, compared
to the same period in 2023. Similarly to MAS' directly-owned assets, collection rates were outstanding at 99.9%.
Occupancy was stable at 97.2% on 31 December 2024 (97.3% on 31 December 2023), and the occupancy cost ratio
was a healthy 10.2% (excluding certain tenant categories: supermarkets, DIY stores, entertainment and services).
DJV's residential business returned to profitability and realised minor positive earnings of EUR1.0million for the six
months to 31 December 2024, which comprised EUR1.8million profit from the sale of completed residential units in all
of DJV's residential projects, as well as EUR0.2million in rental income from residential units, offset by selling expenses
of EUR1.0million (figures not proportioned with MAS' ordinary interest in DJV).
PROPERTY VALUATIONS
The overall EUR34.5million income property fair value uplift was the result of positive fair value adjustments of
EUR37.4million to directly-owned income property in CEE (LFL improvement of 4.1% compared to valuations on
30 June 2024) and a decrease of EUR2.9million in WE (5.6% decrease compared to valuations on 30 June 2024, mainly
due to an increase in the valuation discount rate for Flensburg Galerie). The valuation of MAS' (and DJV's) properties
is determined biannually by external, independent professional valuers, with appropriate, recognised qualifications
and recent experience in the relevant location and property category. Valuations are primarily based on discounted
forecast cash flows and are therefore forward-looking. Compared to valuations on 30 June 2024, the weighted
average unlevered discount rate for income property in CEE decreased from 9.56% to 9.44%.
ASSET DISPOSALS
MAS contracted the disposal of its strip mall assets located in Focsani, Slobozia, Ramnicu Sarat, Sebes, Targu
Secuiesc, Fagaras and Gheorghieni in December 2024 at a price above the Strip Malls' book values on 30 June 2024.
The Group, as well as DJV, which joined the transaction for the sale of the Slobozia Value Centre Extension, completed
the transaction and collected the proceeds on 31 January 2025. The Group has also identified other assets as non-
core to its strategy to efficiently recycle and re-allocate capital. Further updates will be provided when appropriate.
DJV DEVELOPMENTS
Progress with DJV's developments and secured pipeline are detailed below.
Construction at Mall Moldova continues as scheduled. Romania's second super-regional enclosed mall and retail
node will open in April 2025. The centre will offer its substantial catchment area comprising approximately 4million
inhabitants with the most diverse fashion and largest entertainment destination offering in the region. Leasing is
progressing very well, with approximately 85% of the destination GLA secured for the largest shopping destination
outside of Bucharest. The estimated rental value (ERV) income of the completed property, including the currently operational
section, is estimated to be EUR17.3million. The existing centre is anchored by a Carrefour hypermarket, and the tenant
mix benefits from an unparalleled range of more than 250 national and international tenants, with approximately 40
new retailers in the region and 50 in Iasi. The retail node will also benefit from a major Scandinavian furniture and household
goods retailer's first store in the Moldova region, to which DJV has contracted the sale of approximately 5.25ha of the site.
Zoning continues on DJV's commercial projects in Cluj-Napoca, Bucharest and Bacau, as previously disclosed.
Sales continue for DJV's residential projects in Bucharest (Phase I and II of Avalon Estate and Marmura Residence),
Iasi (Phases I, II and Phase III of Silk District, the latter having recently started construction) and Ploiesti (Pleiades Residence).
PROSPECTS AND DIVIDEND
The Company suspended dividend payments starting August 2023 to accumulate liquidity to meet capital
requirements in a more challenging funding environment. As previously disclosed, MAS does not expect it will be
able to consider resuming dividend payments for financial periods ending prior to December 2026 if the status
quo prevails. MAS' remaining shortfall to cover capital commitments until 30 June 2026 is likely to require MAS to
accelerate further non-core asset disposals or raise additional unsecured financing with more restrictive covenants.
Unencumbered DJV properties are not available for MAS to secure debt funding against, which causes MAS to be
reliant on funding in the unsecured market. The perceived complexities of the DJV arrangement, coupled with
current liquidity constraints, have adversely affected MAS' credit rating and weakened investor confidence. As a
result of encumbering most of MAS' directly-owned assets and not already having, by November 2024, the full
cash on balance sheet necessary for a bond redemption in May 2026, both credit rating agencies, Moody's and,
more recently, Fitch, have further downgraded MAS' credit ratings. These additional downgrades place further
uncertainty regarding MAS' access to, and feasibility of, the sub-investment grade bond market. MAS' dividend
is likely to remain on hold until MAS can successfully access the unsecured debt market, or until further non-core
disposal transactions are completed. More restrictive covenants on further unsecured debt could restrict MAS'
ability to declare dividends post the 2026 calendar year. However, MAS will consider and is committed to resuming
dividend payments when capital requirements are sufficient to cover its funding commitments and depending on
the attractiveness of investment opportunities relative to the available liquidity at the time.
EARNINGS GUIDANCE
Earnings guidance for the 2025 financial year, previously provided on a proportionate accounting basis in the range
from 9.54 to 10.45 eurocents per share, remains in place, and corresponds to an IFRS basis MAS distributable
earnings range from 9.27 to 10.13 eurocents per share. There are no substantial differences between distributable
earnings on a proportionate accounting basis and IFRS basis. If removing non-cash earnings from DJV's preferred
and ordinary equity from MAS' IFRS distributable earnings range, the cash-backed distributable earnings would
range between 5.11 to 5.44 eurocents per share in respect of the 2025 financial year. The distributable earnings
range for the six months to 30 June 2025 is narrowed between 4.28 to 4.70 eurocents per share.
This guidance is based on the assumptions that no additional material macroeconomic disruption occurs, a stable
political environment prevails in the Group's markets, developments continue as scheduled and no major corporate
failures ensue. The effects of a potential transaction being concluded with respect to MAS' investment in DJV was
not taken into account for this guidance. Shareholders should note that MAS' estimates and distributable earnings
per share targets have not been reviewed by the Group's auditors and are subject to change. Inevitably, some assumptions
will not materialise, plans will change, and unanticipated events and circumstances may affect eventual financial results.
MAS will not hesitate to adopt changes in strategy, or to take action that will impact negatively on distributable earnings
per share, if this is considered appropriate from a long-term, risk-adjusted, total return perspective.
This forecast has not been audited or reviewed by MAS' auditors and is the responsibility of the Board of Directors.
Irina Grigore
Chief Executive Officer
Nadine Bird 27 February 2025, Malta
Chief Financial Officer Released on 3 March 2025
(1) DJV is an abbreviation for a separate corporate entity named PKM Development Ltd (PKM Development), an associate of MAS since 2016 with
independent governance. MAS owns 40% of PKM Development's ordinary equity (EUR20million), an investment conditional on it irrevocably
undertaking to provide preferred equity to PKM Development on notice of drawdown. By 31 December 2024, MAS had invested EUR444.7million
in preferred equity and had an obligation of EUR25.3million outstanding. In addition, MAS has committed to provide PKM Development a
revolving credit facility of EUR30million at a 7.5% fixed rate, which was undrawn on 31 December 2024 (figures not proportionally
consolidated). The balance of the ordinary equity in PKM Development (EUR30million) was taken up by Prime Kapital in 2016 in cash.
In terms of applicable contractual undertakings and restrictions, Prime Kapital:
(i) is not permitted to undertake real estate development in CEE outside of PKM Development until the DJV's capital commitments are
fully drawn and invested or 2030 (end of exclusivity period);
(ii) contributes secured development pipeline to PKM Development at cost;
(iii) takes responsibility for sourcing further developments, and
(iv) provides PKM Development with all necessary construction and development services via its integrated in-house platform.
All amounts in EUR thousand unless otherwise stated.
CONDENSED CONSOLIDATED STATEMENT On 31 Dec 2024 On 31 Dec 2023 On 30 Jun 2024
OF FINANCIAL POSITION (Reviewed) (Reviewed) (Audited)
Non-current assets 1,579,319 1,413,960 1,543,847
Current assets 230,593 112,007 99,263
Total assets 1,809,912 1,525,967 1,643,110
Equity attributable to owners of the Group 1,162,670 1,033,526 1,086,655
Total equity 1,162,670 1,033,526 1,086,655
Non-current liabilities 583,371 456,388 519,904
Current liabilities 63,871 36,053 36,551
Total liabilities 647,242 492,441 556,455
Total shareholder equity and liabilities 1,809,912 1,525,967 1,643,110
Six-month period to Six-month period to Year to
31 Dec 24 31 Dec 23 30 Jun 24
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS (Reviewed) (Reviewed) (Audited)
Continuing operations
Rental income 39,159 35,970 72,237
Service charge income and other recoveries 12,608 11,335 23,557
Gross revenue 51,767 47,305 95,794
Reversal of impairment/(impairment) of receivables 37 (183) (427)
Service charge and other property operating expenses (15,285) (13,515) (28,247)
Net rental income 36,519 33,607 67,120
Corporate expenses (3,533) (3,555) (7,143)
Other income 252 7,694 7,694
Investment expenses (773) (573) (1,414)
Fair value adjustments 31,176 28,275 55,237
Foreign currency exchange differences (48) (16) (53)
Share of profit from equity-accounted investee, net of tax 15,527 8,072 7,686
Reversal of impairment/(impairment) of share-based
payment prepayments 39 (67) 184
Profit before finance income/(costs) 79,159 73,437 129,311
Finance income 19,000 15,175 31,571
Finance costs (13,955) (12,297) (25,325)
Profit before tax 84,204 76,315 135,557
Current tax (2,301) (2,132) (3,402)
Deferred tax (5,973) (5,341) (10,981)
Profit from continuing operations 75,930 68,842 121,174
Discontinued operations
Profit/(loss) from discontinued operations, net of tax 155 (207) 2,009
Profit for the period/year 76,085 68,635 123,183
Attributable to:
Owners of the Group 76,085 68,635 123,183
Profit for the period/year 76,085 68,635 123,183
FINANCIAL PERFORMANCE 31 Dec 24 31 Dec 23 % Change
IFRS Net Asset Value attributable to owners of the Group (EUR thousand) 1,162,670 1,033,526 12.50%
IFRS Net Asset Value per share (eurocents) 169.0 150.2 12.50%
IFRS Gross revenue from continuing operations (EUR thousand) 51,767 47,305 9.43%
IFRS Earnings per share (eurocents) 12.01 10.41 15.42%
Cash dividend (eurocents) - - 0.00%
Headline earnings (EUR thousand) 30,070 34,508 -12.86%
Headline earnings per share (eurocents) 4.75 5.23 -9.18%
Closing number of shares in issue* 688,045,349 688,045,349 0.00%
MAS Tangible Net Asset Value (EUR thousand) 1,224,383 1,076,616 13.73%
MAS Tangible Net Asset Value per share (eurocents) 178.0 156.0 14.10%
Weighted Average Number of Ordinary Shares* 688,045,349 687,909,902 0.02%
MAS Distributable Earnings per share (eurocents) 5.09 4.50 13.11%
* Excluding treasury shares.
MAS DISTRIBUTABLE EARNINGS Six-month period to Six-month period to Year to
STATEMENT OF PROFIT OR LOSS 31 Dec 2024 31 Dec 2023 30 Jun 2024
IFRS EARNINGS 76,085 68,635 123,183
IFRS DISTRIBUTABLE EARNINGS 34,998 30,990 51,333
Net rental income 36,519 33,607 67,120
Corporate expenses (3,415) (3,026) (6,325)
Finance income on preferred equity and revolving credit facility 18,059 13,578 28,945
Other finance income 941 1,597 2,626
Finance costs (13,955) (12,297) (25,325)
Share of distributable loss from equity-accounted investee, net of tax (1,045) (1,344) (14,099)
Loss from discontinued operations - distributable (9) (144) (175)
Current tax (2,301) (2,132) (3,402)
Other distributable net income 204 1,151 1,968
IFRS NON-DISTRIBUTABLE EARNINGS 41,087 37,645 71,850
Share of non-distributable profit from equity-accounted investee, net of tax 16,572 9,416 21,785
Profit/(loss) from discontinued operations - non-distributable 164 (63) 2,184
Investment expenses (773) (573) (1,414)
Fair value adjustments 31,176 28,275 55,237
Deferred tax (5,973) (5,341) (10,981)
Share based-payments (79) (596) (634)
Other non-distributable net income - 6,527 5,673
Weighted Average Number of Ordinary Shares 688,045,349 687,909,902 687,977,255
MAS Distributable Earnings per share (eurocents) 5.09 4.50 7.46
MAS Cash-Backed Distributable Earnings per share (eurocents) 2.61 2.80 5.50
MAS TANGIBLE NET ASSET VALUE On On On
STATEMENT OF FINANCIAL POSITION 31 Dec 2024 31 Dec 2023 30 Jun 2024
ASSETS 1,809,912 1,525,967 1,643,110
Investment property 1,018,827 994,441 1,030,329
Preferred equity and revolving credit facility 502,175 374,094 467,496
Investment in equity-accounted investee 48,625 33,484 33,098
Other non-current assets 7,996 10,245 11,228
Intangible assets 1,696 1,696 1,696
Trade and other receivables 19,247 28,664 17,961
Investment property held for sale 48,961 1,553 -
Cash and other financial assets 162,385 81,790 81,302
LIABILITIES 647,242 492,441 556,455
Bonds 217,901 215,891 212,503
Bank loans 345,645 205,545 262,908
Other non-current liabilities 6,634 6,796 6,921
Deferred tax liabilities 53,378 41,309 47,338
Trade and other payables 23,684 22,900 26,785
NET ASSET VALUE 1,162,670 1,033,526 1,086,655
Adjustments 61,713 43,090 52,147
remove Deferred tax liabilities 53,378 41,309 47,338
remove Intangible assets (1,696) (1,696) (1,696)
remove Investment in equity-accounted investee (48,625) (33,484) (33,098)
add back Tangible Investment in equity-accounted investee** 58,656 36,961 39,603
MAS TNAV 1,224,383 1,076,616 1,138,802
Number of Ordinary Shares in Issue 688,045,349 688,045,349 688,045,349
MAS TNAV per share (eurocents) 178 156 166
TSR 14.1% 9.8% 13.7%
** Investment in equity-accounted investee adjusted for its deferred tax liability on the same date.
This results announcement is the responsibility of the Directors and is only a summary of the information contained
in the reviewed condensed consolidated interim financial statements released on SENS on Monday, 3 March 2025 and
available at: https://senspdf.jse.co.za/documents/2025/jse/isse/msp/MASHYFS25.pdf or on the Company's
website: https://www.masrei.com/investors/financials. This results announcement does not contain full or
complete details, any investment decisions by investors and/or shareholders should be based on consideration
of the reviewed condensed consolidated interim financial statements. The condensed consolidated interim financial
statements have been reviewed by the Company's auditors, PricewaterhouseCoopers (Malta), who expressed an
unmodified review opinion thereon.
Date: 03-03-2025 08:00:00
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