NEPI Rockcastle: Consolidated Financial Statements December 31, 2021



DECEMBER 31, 2021



“In 2021, the Covid-19 pandemic continued to affect businesses and livelihoods, sometimes in unexpected and new ways. However, the world learned how to better cope with disruptions. Vaccinations and other medical breakthroughs have reduced the burden on healthcare systems, enabling governments The impact on shopping and entertainment centers was again massive, especially in the first half of the year, when authorities in most Central European countries and eastern have introduced trade restrictions comparable to those of 2020. In the second half of the year, we saw a robust recovery in turnover, indicating that the appetite for traditional shopping and leisure, as offered by the properties of our Group, remains very strong.

For the Group, 2021 has been a year of transition, from the defensive mode of 2020 to repositioning for sustainable growth. Ensuring the safe operation of our properties, providing tenant support and preserving high levels of liquidity and capital remained key management themes. At the same time, we have shifted to a supportive growth mindset. Construction works have started for the extension of the Promenada shopping center in Bucharest and the greenfield development of Promenada Craiova. Our team signed over 1,000 new leases and renewals, more than in 2019. We continued to invest in our properties to make them even more attractive to clients and merchants. Occupancy and collection rates were sustained, proving the quality of our tenant mix and the strong attractiveness of our assets. More encouragingly, we have seen turnover return to, and even exceed, pre-pandemic levels for every month without trade restrictions.

Financially, we have resumed paying dividends in line with our policy of distributing at least 90% of profits to shareholders. Our balance sheet is stronger than ever, with a loan to value ratio of 30.9% and available liquidity (including undrawn confirmed credit lines) of 1.1 billion euros. A new eight-year green bond issue in January 2022 with a 2% coupon was used to restructure the debt maturity profile, and now our company has no significant debt repayments due until 2024.

There are challenges to be met, that’s for sure. The pandemic is not over and the emergence of new variants remains a threat. Some undesirable economic side effects are now becoming evident, such as higher inflation (triggered by fiscal and monetary stimulus, among other factors) and disrupted supply chains, which could lead to a squeeze in purchasing power and financial conditions in the near future. Internally, our group has recently experienced significant personnel changes, both at the level of general management and the board of directors, and is considering a relocation of its holding company. These changes will need to be carefully managed to ensure strategic and operational continuity. I am confident that we will be able to successfully meet these challenges and deliver strong results for our shareholders.”

Rudiger Dany, CEO

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