EQS-News

The Grounds ends 2023 with a decline in sales revenues and negative consolidated earnings - positive outlook for financial year 2024

EQS-News: The Grounds Real Estate Development AG / Key word(s): Annual Results/Forecast The Grounds ends 2023 with a decline in sales revenues and negative consolidated earnings - positive outlook for financial year 2024 29.04.2024 / 08:00 CET/CEST The issuer is solely responsible for the content of this announcement. The Grounds ends 2023 with a decline in sales revenues and negative consolidated earnings - positive outlook for financial year 2024

• Consolidated sales revenues reduced to EUR 23.9 million (previous year: EUR 36.8 million)
• Consolidated EBIT declines to EUR -4.8 million (previous year: EUR 3.4 million)
• Consolidated balance sheet total increases by around EUR 9.0 million to EUR 147.8 million (previous year: EUR 138.3 million)
• Planning for 2024 assumes significantly higher sales and balanced Group EBIT

Berlin, 29 April 2024 – The business performance of The Grounds Real Estate Development AG (The Grounds / ISIN: DE000A2GSVV5) during 2023 was characterised by declining sales revenues in a challenging market environment. At around EUR 23.9 million, consolidated sales revenues in the reporting year were around EUR 12.9 million, or 35%, lower than in the previous year, in which sales totalled EUR 36.8 million. However, a significant portion of the EUR 4.9 million decline in sales revenues is attributable to a single event, the cancellation of the contract concluded in 2022 for the sale of the Terra Homes project. This was carried out by mutual agreement at the end of December 2023 at the buyer’s request. Overall, The Grounds was unable to escape the general market trend in Germany during 2023, which was characterised by strong reluctance on the part of institutional and private buyers. This was reflected in massive declines in transaction volumes in almost all property market segments.

The majority of The Grounds' consolidated sales revenues totalling EUR 19.1 million resulted from construction progress of the development projects, which is accounted for using the percentage-of-completion method. Specifically, this related to the “Maggie” project in Berlin-Lichtenberg and the “LennéQuartier” and “Property Garden” projects in Magdeburg. The two other sources of revenue, privatisation and letting, contributed EUR 2.3 million and EUR 2.0 million respectively to consolidated sales revenues. Other factors that reduced earnings were impairment losses on investment property, totalling around EUR 1.3 million, and other operating expenses, which include risk provisions for a company investment accounted for using the equity method that was sold after the reporting date – the end of January 2024.