Echo’ s new strategy
Investment & finance“We have been transforming from an investment and development company into a classic developer. We will be building, leasing and selling our projects rather than creating a portfolio of properties for lease, as has been done so far. This will allow us to generate capital turnover more rapidly as well as higher rates of return and as result to pay regular dividends to our shareholders,” explains Nicklas Lindberg, the CEO of the company.
Echo Investment is now to exclusively concentrate on the Polish market, with its foreign projects to be gradually sold off. The CEO of Echo Investment adds that one of the ways it will attempt to increase profitability is to strengthen the construction division of the company, which would give it greater control of the costs, quality and safety on building sites. “We will be carrying out our own projects and provide development, leasing and consulting services to our majority shareholder, the Griffin Real Estate group,” he reveals.
Echo Investment currently has 49 projects with an area of over 500,000 sqm under construction and preparation. One of the largest and most important of these is its development of the site of former Warsaw Brewery, which is just getting underway. Meanwhile, in Warsaw’s Mokotów district Echo Investment is preparing for the launch of the construction of an office project on ul. Beethovena [a total of app. 55,000 sqm – editor’s note].
“We are negotiating with a large tenant and redesigning the project. We might launch two stages together in 2017,” says Rafał Mazurczak, a member of the board of the developer and involved in the office segment.
The company is also planning to make purchases. “We want to buy older shopping centres in good locations and revitalise them,” reveals Marcin Materny, a member of the board at Echo Investment responsible for the retail segment.
Echo also wants to extend its scale of operations in the residential sector. “We are planning to focus on the popular segment,” says Piotr Gromniak, the vice-president of the board at Echo Investment and responsible for this sector.
In H1 2016 Echo Investment’s consolidated revenue amounted to PLN 280.5 mln compared to PLN 273.8 mln in H1 2015. In the same period its gross profit from sales came to PLN 145.4 mln (PLN 135 mln in H1 2015), its operating profit increased to PLN 404 mln (from PLN 31.1 mln) and its net profit increased to PLN 229 mln (from PLN 22.7 mln). Echo Investment’s assets are currently worth PLN 5.55 bln (compared to PLN 6.279 mln). For the first time in its history the company has allocated PLN 2.175 bln for dividends, amounting to PLN 5.27 per share. After the payment of the dividend the company’s balance comes to almost PLN 472 mln. Following the flotation of EPP’s shares in Johannesburg, which Echo Investment held a 25 pct stake in, this stake has now decreased to app. 22 pct.
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