UBM Development (UBS) Q4 2023 earnings summary

Executive summary

• 2023 EBT was -€39.4m, mainly reflecting ~€70m of project and property revaluations amid difficult transaction conditions.

• Year-end cash was €151.5m and the equity ratio was 30.3%; liquidity and asset sales were prioritized.

• The €2.3bn development pipeline was 75% timber, with more than 300,000 m² of timber or hybrid projects.

Financial highlights

• Total Output fell 27.3% YoY to €284.2m; revenue declined 36.3% to €85.3m.

• EBT was -€39.4m versus €31.5m in 2022; net result before non-controlling interests was -€46.1m, while reported net loss was €46.0m, versus net profit of €27.1m in 2022.

• EBITDA was -€27.3m versus €39.2m; EBIT was -€30.1m versus €33.9m.

• Fair-value adjustment expenses on investment properties were €40.8m versus €4.6m; headline revaluations were ~€70m.

Outlook and guidance

• No 2024 guidance was provided, citing volatile and unpredictable market developments.

• Priorities included liquidity and cash management, non-strategic asset sales, additional Timber Pioneer leases and executing the timber pipeline.

• Standardization, modularization and services for stranded assets were among the stated strategic actions.

• The market low point was expected to pass in 2024; recovery to pre-crisis levels was not expected for an extended period, with competitor exits expected to increase the demand overhang.