Lamda Development: H1 2020 results – Group results in red, poor visibility remains

authored by
Konstantinos Κarlis
Market Insights
4 minutes read

The three shopping malls of the firm i.e. The Mall Athens, Golden Hall, Mediterranean Cosmos, posted big declines of operating profitability (ebitda) in H1 2020 due to the effect of the national lockdown during the period 13.3.20 - 17.5.20 as well as due to the traffic restriction measures.

Ebitda in 000,000 eurH1 2020H1 2019D%
The Mall Athens8,514,4-41,0%
Mediterranean Cosmos5,49,0-40,0%
Golden Hall5,68,6-34,9%

Consolidated ebitda for the shopping malls universe amounted to €19.5 mln. vs €32 mln and decreased by 39.1% vs H1 2019. Average occupancy of all the shopping malls is 98%. However, the covid-19 pandemic as well as the lockdown and restriction measures resulted to a 43.2% decrease of turnover while traffic and total visitors decreased by 47% vs the corresponding period for 2019. Following the restart of operations visitors fluctuate between -16% and -57% regarding each shopping mall and the examined period of operation. Especially for The Mall Athens, visitors traffic and access is affected to a great degree by the subway. Regarding the Mediterranean Cosmos, traffic and visitor numbers were affected by the lack of incoming tourists, a statistic that traditionally increases every June and was very weak this time.

Group ebitda for Lamda Development for H1 2020 amounted to €31.2 mln vs €39.5 mln for H1 2019 and decreased by -21,1%. Fair value of investments in real estate assets decreased by €11.3 mln on 30.6.20 vs positive fair value of €49.7 mln on 30.6.19. Financial expenses amounted to €14.9 mln in H1 2020 vs €13.1 mln in h1 2019. Net result after tax was losses of €6.5 mln vs net profit of €45.2 mln in H1 2019.

Cash position on 30.6.20 amounted to €631 mln while net asset value (before deferred taxation) amounted to €1.150 mln (€6,51 per share) vs €1.155 mln (€6,54 per share) on 31.12.19.

Conference call details
During the conference call management reported that in line with the government directives, for the months of July and August a reduction of 40% was offered to the foodstuff, beverage, restaurants and entertainment sectors which may be continued for the coming months. We note that during Q2 2020 Lamda offered additional discounts of 30% to its lessees apart from the 40% that was offered by the Greek state. As the pandemic and the corresponding restriction measures remain in the daily scene it is a continuous headwind for the rest of the 2020 financial year for the company.
Furthermore, the company's management reiterated that Integrated Resort Casino (IRC) licence is expected to be granted to Mohegan by the end of the year which paves the way for the transfer of the rights in rem to Hellinikon S.A. Regarding the future outlook the management added that there is no evidence for a reduction on rents in 2021e and that the new tenants have agreed on higher rents than the older tenants.

Stock chart
After three months we revisited the longer term weekly chart of Lamda Development. We have detected an upward trending channel. The stock fluctuates within this channel for many quarters. Presently, there is an effort to absorb the rapid decline which is owed to the first wave of the pandemic. We expect the stock to remain within this channel for the next few quarters. Upward resistance is the level of 8 euros while downward support is the level of 5 euros. The 200 week weighted moving average is depicted as the green line in the chart. The stock trades below this moving average (6.07 euros) and it is considered as a negative technical sign.

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