Good morning, and welcome to One United Properties conference call for presenting the half year of 2023 results. My name is Zuzanna Kurek, and I'm Investor Relations Manager at One United Properties, and together with Victor Căpitanu, Executive Board Member and Co-founder of One United Properties, and Cosmin Samoilă, CFO at One United Properties, we will present to you our results for the H1 of the year, as well as answer any of the questions you might have. Before we begin, I would like to mention that this call is being recorded, and the recording of the call will be updated on our website later this week. As stated in the call invite, by joining this video conference, you automatically and implicitly consent to it being recorded. If you do not consent to being recorded, please leave the call. In terms of the organizational aspects, let me first present to you the setup. Firstly, Victor Căpitanu will deliver opening remarks. We will then move to the second part of the call, where, together with Cosmin Samoilă, we will present the key financial results, as well as key events that happened since our last call. During our presentation, feel free to type any of the questions you might have, and we will, in the chat box, and we will answer them during the Q&A. After the presentation, we will start the Q&A session. First, we will answer the questions that we received via email prior to this call. Secondly, we will answer the questions received on the chat in chronological order. Please note that all participants are put on mute, and have their video turned off. If you want to ask a question, please type it in the chat window. Finally, I would like to mention that today we might be making forward-looking statements during this call regarding the future performance of One United Properties, and that the actual results may differ materially. We encourage you to review the disclaimer that we have included in the presentation, which you can see right now on the screen. This disclaimer applies equally to all of the statements made in today's call. Now that the organizational aspects are over, I would like to invite Victor to share some highlights with you regarding our performance in the H1 of the year. Good morning. Welcome, everybody, to our investors call. I will start with few general remarks about the market and the business. For the H1 of the year, our most important indicator, new sales of units, reached EUR 152 million, an increase of 160% compared to H1 of last year. In the same period, the market contracted and suffered a decline, overall in Romania of 22.1%, and in Bucharest alone, where we have our business, with 26.6%. Information from the official National Cadastre and Real Estate, for real estate advertising. So basically, what we've seen in the H1 of the year was a huge flight to quality. People finally watched the price to quality ratio more than the price itself. So as money became more expensive, people are more careful with how they invest it. For the clients, it started to become much more important, the quality of the product they buy and from whom they buy. So finally, the reputation of the developer and the quality of the product has taken center stage. We have a record of EUR 281 million to collect from signed sales. This year, we are delivering almost 1,500 units, the most in our history, and more than all the previous years combined. In the same time, pipeline of available units for sale with construction started or already permitted, that start on demand, it is very strong, covering at least next five years of sales. Structural demand in the market is still much bigger than supply for a quality product. In the same time, in Bucharest, there is a low number of permits which put pressure on prices, upwards pressure on prices, and is lowering the competition. We've seen a significant fall of competition in the H1 of the year. Construction cost stayed flat this year, although commodities generally, commodities pricing are generally decreasing. Regarding our margin, I want to reiterate that we target a long-term margin, gross long-term margin in excess of 35%, and all our developments are in line with that. So even if you temporarily see in the H1 of the year a lower margin, this means that the difference will be shown in our balance sheet in 2024 and 2025. Cosmin will explain later how we account for the profitability of the sales. In the same time, our gross leverage decreased this year from 28% at the beginning of the year to 25% at mid-year, and still we have less than 10% of debts to assets. Regarding the market in general, Deloitte has published recently a study, which was featured a lot in the Romanian press, this month, in August 2023. Romanian apartments are still, by far, the cheapest apartments in Europe. Regarding affordability, it's important to note that although salaries increased in 2023, the exchange rate euro to leu remained flat. The prices in euro didn't increase this year of apartments, so affordability, basically, in terms of purchase power, increased this year compared to last year. In terms of, regarding inflation, continues to be, by far, the best shield to inflation. Even Warren Buffett recently decreased his exposure on various stocks and increased his exposure on real estate stocks. So this, I think, for me and for everybody, was very, very reinforcing. Regarding our strategy, of yielding assets versus development, it is obvious that development has a much bigger margin, and in periods like this, with higher cost of money, the difference between profitability of rented assets and development assets is growing even more. That is why we decided to exit several yielding assets, in order to better allocate the equity from single-digit return of equity to new developments where we target return on equity of 30%... More than 30% compounded per year. We exited One Herastrau Office, EUR 21.4 million, at a yield around 7%. One North Gate, which has a more disadvantaged location compared to most of our other assets, we signed a promise to exit at EUR 6 million at a yield around 8%. And we recently sold a commercial lease to Lidl for EUR 8.8 million, at a yield a bit less than 6%. We might continue to do that, depending on the demand on the market and on the clients we find, with a single purpose to better allocate the equity in the interest of the shareholders. This year, we also improved the liquidity on the Bucharest Stock Exchange. Last year, we were around the top ten, but H1 of the year, we became the seventh most liquid share on the Bucharest Stock Exchange, and the sixth most liquid if we compare to the free float. We were recently included in MSCI Composite Index for Frontier Markets, and from end of August, we'll be included in the mid-to-large cap category. In terms of performance, we managed to perform better than the main index of the market and the index, including the total return, that total return. And last but not least, in difficult times like this for the markets, for the real estate market, I mean, always, it's important to know that the most liquid properties are the best located. Fundamentals don't change. Location, location, location still remains the mantra, and center apartments and long-term lease properties are the most desired, even when the real estate market has a more difficult time. On the other hand, periphery properties, secondary cities, old and not rented office buildings, land without zoning or without permit or without a good developer behind, and even selected retail and industrial properties, because these kind of properties can be very easily be competed. All of these categories are suffering during these times. Now, I will let my colleagues, Zuzanna and Cosmin, to continue with the presentation, and I will come back to the questions, in the end. Thank you. Good morning. Thank you for participating to the conference call related to the results of the first six months of this year. Before getting into detail in the financials aspects, I want to mention that you will observe in some of our columns that we present the figures shaded portion. This is related to the exceptional event that took place last year, meaning the acquisition of Bucur Obor, where we marked a gain on this acquisition, and we considered relevant to present variations of this year results compared both including and excluding this exceptional event. Related to the turnover, the consolidated turnover, this increased overall with 25%, up to RON 843.5 million. As mentioned, if we exclude this exceptional event of last year, the increase was even 46%. Turnover is including mainly the revenues from sale of apartments, but also rental and tenant services, gains from investment property and other operating income. In the same time, the net profit reached RON 286.9 million. This, it's an increase of 13% compared to last year same period, if we exclude this exceptional event of last year. If we include it, it's a decrease of 17% compared to last year. In relating to the residential segment, there is a strong increase in the revenues from residential sales, 56% increase, up to RON 604.1 million. At the same time, the net income, the profit from residential sale decreased with 4%. This is, let's say, a natural consequence of the fact that the margin of the sales decreased to 29.5%. This being related to the stage of completion of the construction where we are recognizing sales. Basically last year, all the revenue that we recognized was in construction that were close to finalization. While this year we have a lot, a lot of revenue in developments that are just started in the last year, the construction. And I will come back with a more detailed clarification on this recognition criteria, because there is also a question that came on the email related to this. On the commercial segment, the rental income and services to tenants double, more than double compared to last year, 119% increase, up to 62.8 million RON. And we are expecting in the next period, this to further increase as long as there will be in One Cotroceni Park phase two office. It was receptioned in February, and tenants are starting to get in space and generate rental. The other profit and loss positions, administrative expenses, it is a decrease of 37% compared to last year. Here also, this is an impact of the non-cash stock option plan allocation that we recognized for the first time last year, and we recognized also this year, but in a lower amount. Other operating expenses increased in 14% and EBITDA reaching RON 353.1 million. Increase 18% if we exclude the one-off gain of last year, and decrease 10% if we include this one-off exceptional event of last. In terms of balance sheet, the asset side, current assets grown 13%, up to RON 2.1 billion. The main generation of this increase is the increase in residential property, 38%, up to RON 917.6 million. On the non-current assets, this also have increased 11%, up to RON 2.6 billion. The main generating this increase is the increase in investment properties, also 11%. Basically, investment properties account for 96% of the non-current assets. On the liability side, non-current liabilities increasing 12%, mainly due to the increase in long-term loans from banks. Nevertheless, the average maturity for the outstanding loans as of the end of the H1 of the year is almost 8 years for the investment property bank loans and 1.1 years for the bank loans related to development of residential property. On the cash position, cash position is at a strong volume, decreasing 30% compared to prior year. This has been generated mainly by the investments and the investment activity that we carried during the H1 of the year, where we have many sites under construction. But even this, the loan-to-value ratio decreased three percentage points up to 25%. This is because the value of the assets increased more than the value of the bank loans, and the net debt is still at a very reduced level, below 10% from the total asset. Also related to the cash flows, the amounts that we have to collect in the future periods from contracts that are already signed as of June 30th, amounts for a total of EUR 281 million. You see here the column on the right part of the screen. We already cashed in this year EUR 113 million, and we plan another 100 to cash in from the contract that are signed already as of now. Normally this amount will further increase because we will have additional sales also in the H2 of the year. We almost, in the first six months, we almost cashed in same amounts that we cashed in, in the entire years of, of last year, of last year prior periods. Also for the future years, 2024, we already have EUR 190 million cash from contracts already signed as of today. Thank you, Cosmin. We are now moving to several business updates. We start with the evolution of the residential pre-sales. As Victor mentioned, while the Bucharest real estate market declined in the H1 of the year, One United Properties sales team managed to sell and pre-sell 466 apartments, with a total surface of 39,000 square meters. If we compare this to last year, we have a significant increase versus 167 units sold last year. In terms of the trends, if you remember from our past calls in the fourth quarter of 2022 and the first quarter of this year, One High District was our best-selling development. It continued strong sales also in the second quarter, with more than half of the units at the development being already fully sold out as of 30th of June. However, an important development took place in June this year, when we launched sales at One Lake District, which is our largest development to date, which is gonna host approximately 2,100 units. Just within 1 month, our sales team sold 108 units at One Lake District, which is an exceptional performance that we believe will continue going forward. What is important to mention, however, is that at current state, if you look at the number of units available for sale, we estimate that as of 30th of June, 65% of apartments that are available to purchase, either sale or pre-sale, were already sold out. That means we have a portfolio of approximately 1,500 units available for sale. Important, at One Lake District, at this moment, we only have available for sale 793 units. That means over approximately 1,300 units will be added to the sales portfolio team at a later stage as the sales progress. which will help us continue the good trend of significant sales compared to last year, when indeed we didn't have enough stock available for sale. Another important aspect to mention, out of the developments that are already delivered to clients, meaning developments where the construction is finalized and the clients are either in the process of moving in or have already moved in, we only have available for immediate purchase, 43 units of finalized stock. That is less than 3% of units developed at this development. If we look at the key trends, it continues what we saw also in the last quarters. The two-room apartments, more than half of the units sold in the H1 of the year were two rooms. When we look at the total surface of these units, approximately out of all of the sales, 40% were two-room apartments, followed by four-room apartments, which amounted to 27% of total surface sold, followed by three-room apartments. As I mentioned, One High District continues to be, for the H1 of the year, the best seller, where 62 units were already pre-sold by our teams. And, if we look at Q2 alone, One Lake District surpassed, for the first time, One High District with sales. In terms of the key business developments, I would like to mention in the H1 of the year, we delivered One Verdi Park and One Floreasca Vista to customers. Both of these developments together host approximately 400 units, and you can see at this development, the clients are already moved in or in the process of moving in. On the commercial segment, I would like to mention the sale of One Herastrau Office that happened in the H1 of the year, as well as the Pre-SPA that was signed for one of the office buildings within One North Gate. We are discussing here the smaller building. The larger building is going to be reconverted into, into a residential development, where we have the, we also are seeing, very good sales for, for those units due to the, excellent positioning of the development. On the governance side, I would like to mention that the management reiterated in the half-year report that we are maintaining the 2023 budget, targeting a turnover of RON 1.43 billion and a net profit of RON 530 million, with the net margin expected at 37%. We also count the CapEx costs, of approximately RON 1.2 billion. We also mentioned the half-year report that the general meeting of the shareholders is coming up following our biannual dividend payment policy, and the board of directors is going to make a proposal to the shareholders regarding the payment of the first tranche of the dividend for 2023 profits. In terms of the development of One shares, we saw an uptick in liquidity in the second quarter of the year as trading on One shares increased 66% compared to Q1. In the H1 of the year, One was the seventh most traded stock on the Bucharest Stock Exchange in terms of absolute liquidity, and sixth most tradable by liquidity to free float. Our market capitalization reached RON 3.5 billion, and we outperformed the reference index BET, which grew 7%, while One shares grew 9.23%. In terms of the total return, while BET TR grew 10%, One shares grew 10.4%. That includes the payment of the second tranche related to 2022 profits. And last but not least, I would like to also discuss a little bit about our sustainability efforts. We have published on August 7, our 2022 sustainability report, which introduced a number of new indicators that we have received in the past request from our shareholders and investors to introduce. You can find in our 2022 report detailed information about the greenhouse gas emissions, Scope 1 and Scope 2 across our all operations, as well as Scope 3 for the office segment. We also introduced information regarding the percentage of the revenues coming from the green green office segment, as well as percent of the green certified office across our commercial portfolio. As well as several important indicators on the social side, such as gender pay ratio, annual compensation ratio, remuneration increase across the employee base, as well as training hours per employees department. And last but not least, we also have an important section which evaluates the risks and opportunities associated with climate change, according to the Task Force on Climate-related Financial Disclosures. Now, this concludes our formal presentation, and we would like to move to the Q&A. As I mentioned at the beginning, you have a chat window where you can type your questions. I see we already are receiving our first questions there. But prior to addressing the questions from the chat, we received six questions from investors prior to the call, and we would like to address those first. I'm going to read out the questions one by one, and then we're going to address them one by one. The first question is related to the profit margin. What measures are you taking in order to maintain the profitability levels? Here, I would like to invite Cosmin to tell us a little bit more about the revenue recognition and how that impacts the net margin as we report it from quarter to quarter. Okay, so, we are recognizing the revenue in the financial statements based on the requirements of IFRS 15. Basically, from the sales that are contracted, the revenue and the associated profit is recognized over time during the entire construction progress, based on the stage of completion. Basically, this means that, in the initial phases of the construction, because the land cost is a fixed cost and it has a bigger weight on the total cost, the margin that is recognized is lower. This is if you are looking in our financial statement for 2021, 2022, and 2023, you will observe that 2021, we had the margin. Based on the developments that were in the middle of the construction phase, then in 2022, we had a record margin recognized because all the revenue recognized in 2022 was related to properties that were in the last phase of the construction. And in 2023, we have a lower margin because we have a lot of revenue recognized from development that recently started the construction. Also, this is very important to say that the revenue and profit associated to this development that are in the initial stage, even if there is less recognition in the initial part of the construction and this year, this difference will be recovered in 2024 and 2024, based on the progression of the construction and the building reaching finalization state. Thank you, Cosmin. The next question: What is happening with One Modrogan? And here, I would like Victor to address this one. Thank you for the question. So for Modrogan, as I mentioned also, before, it is a complete abuse that we are facing. We have all the building permits by the book, everything approved by the city hall, everything legally perfect. We are sued by a nonprofit organization, which is founded by the wife of the mayor without capital, without liability, and the works are suspended for the time being, but the building is almost ready. So we wait for the trial in order to have justice on this and to finalize the building and deliver to the clients. Thank you, Victor. The next question is related to Bucur Obor. Considering the acquisition of Bucur Obor, a full integration of it in One United Properties could mean the listing of the company from Bucharest Stock Exchange. What are the intentions above, about the above subject? So for Bucur Obor, we focus on improving profitability. We are investing in the upgrade of the quality of the building. We focus on energy efficiency and on a better flow of clients for our tenants. So for the time being, we just focus on this, and we improve the property in quality and profitability. Your vision for the real estate market for period 2024-2025, correlated with the economic context and the fact that 2024 is an election year in Romania, is interesting. How do you see the evolution of the real estate market in the current banking context? So basically, regarding the market, as I said in the beginning, you've seen that H1 of the year has decreased overall in terms of transactions in Romania and even more in Bucharest. We estimate this decline to continue this year and next year. Nevertheless, this is our opportunity to benefit from this flight to quality and grow our business. It's good for us that clients start looking at the quality-price ratio, not only to price. We are benefiting from a very high level of trust from our clients, which comes from our track record and doubled by the balance sheet of the company, with own capital in excess of EUR 550 million in accounting. So basically, we are here to take advantage of the opportunities of the market for the coming years. A related question, do you consider entry to the real estate market in Cluj-Napoca? So, on the long term, potentially, yes, but on the short term and medium term, for sure, no. Ideally, for our company, is that our next city would be bigger than Bucharest, not smaller than Bucharest. As you know, Cluj is a small city. Economy of Cluj, compared to Bucharest and metropolitan area of Bucharest, is, I think, around 15 x smaller. So, as I said in the introductory note, secondary cities are not the greatest place to be in this difficult times for the real estate market. So, I prefer, for the time being, to focus on Bucharest and medium-term and even longer, to explore ideas for bigger cities, not for smaller cities. The last question from email, how do you view the share price evolution for the H1 of 2023? Have you implemented a share buyback program? So the share price this year performed reasonable better than the BET index and the BET Total Return index. Liquidity improved very nice compared to last year. So now we have the seventh most liquid stock, as I mentioned in the beginning, and the sixth compared to free float. Our growth target is on average to grow 15% per year. So we fulfill our longer-term target to to increase the intrinsic value of the company four times in the next 10 years. Thank you. We now move to the questions from the chat. Please type any questions that you might have, as the other participants did so far. First question: How many apartments, roughly, do you target to sell and pre-sell in the H2 of the year and full year 2024? I don't know if we have this information public. Cosmin, do we have this public in our budget or not? No. For sure, we are not communicating anything regarding 2024. What we can say is that, as we mentioned, we have approximately 1,500 units available at this moment for sale and pre-sale, of which 43 units already finalized. On top of this, we have capacity to add another 1,300 units at One Lake District related to the. These are the units that are currently not yet added to sales portfolio, and potentially next year, after the delivery of One Cotroceni Park, also new development, One Cotroceni Towers, with additional 1,200 units. This is the only update that we're gonna give related to capacity. Yes, Zuzanna, I think it's very okay, very correct. So, basically, our stock is very low. We only have 43 finalized units. So we still sell accelerated everything under construction, and this is our plan going on. And basically, we have enough units to sell, to build and to sell, that are already permitted for the next, at least for the next five years. In terms of actual number of sales, we will do our best to sell as much as we are able in the market. So basically, our effort is continuously to sell with priority developments under construction that still need sales to cover the costs. So this will be always the priority. And less focus if something is finalized and there are just few units left. This is more or less on the strategic point of view. Residential gross profit margin outlook for this and next year, is it realistic to increase volume of sales, so presumably also launching new projects and at the same time increase the gross profit margin? Here, perhaps, Cosmin can give a little bit of color again on the revenue recognition and how it impacts the profit margin. Yeah. So how it looks right now is that, in the next period, the percentage margin, from the sales that are already contracted and based on the advance of the construction, will, will show an increase in the... in percent in the next period. So basically, what we see now in a lower margin is not an actual lower margin. We'll just recognize the profit later down the road. Next question, also from Jakub: The completed investment property was valued at approximately EUR 450 million as of the end of June. What is currently the in-place annualized net rental income these assets are leased at? What is the value of investment properties which have been externally revalued as of the end of June? Here I'll ask Cosmin to address this one. Okay, so on the first question, we discussed about the annualized. It's in the range of EUR 30 million-EUR 35 million, annualized. And, related to the value of the investment that were, externally valued, all our, investment property are externally valued. But what we do is that in the half of the year, we check, on the investments that had, change in value. And, after the discussion with the valuators, we do valuation report only for the investment that we have indication that there was a change in value in the first 6 months. Nevertheless, as of June, we revalued 80% in terms of value from the, from the investment property group, because basically we revalued the, the big properties, all of them, entirely. 80% as of June has valuation done in June. The other 20% is based on the valuation done in December. Thank you. Going to next set of questions. Does the gain on disposal of investment property in the H1 of 2023 of RON 5.4 million lei reflect the gains related to the sale of both One Herastrau Office and One North Gate? Here again, a question for Cosmin. Okay, so here in the gain on disposal of investment property, here we are recognizing the sale of some apartments that were for rental purposes, that we sold during the H1 of the year. The sale of One Herăstrău Office is recognized in another line, is recognized in the line share of results of associates, because here it was a share deal in a company that we are not directly holding. We are holding a company and then One Herăstrău Office. And One North Gate at the moment, it's a pre-sale agreement to sell, and we didn't recognize any impact in the financial statement based on the pre-sale agreement. Do you expect the share-based payment expense to remain at similar levels in the third quarter of the year and fourth, as it was in the first and second? Yes, we are recognizing the expense of the Stock Option Plan with a different amount each year. But in the year every quarter we are recognizing the same amount. So we are dividing 4, and we are recognizing the same amount for each one. And last question: Can you please, can you please explain how the number of total units sold from project start for One Lake District reached 366 as of the end of June, even though sales began in June 2023, with 108 units sold by June 30th? Where does the difference to 366 come from? I will let also Cosmin answer. Okay, so the difference in the sales come from units that were sold before launching the retail sales that we, we launched in June. So there were sales in the past years, but there were this type of early sales that you see also in our report. We are reporting also some early sales. So basically, these were early sales in the past years, and now that we started the retail sales, we included also these sales in the total number of units sold for this development. Question related to 2023: What is the 2023 target budget for net profit after minority? Again, this I will let Cosmin answer in line with the budget. We are estimating the minority share to be around 10% in the net profit. Basically, 90% of the profit will be attributable to all the owners of the company. And, next question: After experiencing several quarters of high interest rates, what do you think about residential market demand? Out of all units sold, how many are financed by credit, and what's their weight in the sales? And, I will first ask Victor to give his feedback on the overall market status. So as I said in the beginning, although the market overall declined, the market for our specific product is very strong, and we have experienced very robust demand despite of the evolution in the interest rates. Regarding the percent financed by credit and the weight in the sales, I will ask Cosmin, but before Cosmin, I will mention that any unit sold with potential mortgage loan to clients has a down payment of minimum 30%, which we believe it is very safe for our selling policy. Yes. Related to the weight of sales and credit, basically, we know this proportion for sure in the moment that we are delivering the unit and the client has to pay the final installment and gets a bank financing for the final installment. But we are... What we are estimating up to now, depending on the payment scheme that are contracted by the client, is that between 40%-50% of the sales are going to be financed by a bank loan, in the end, at the delivery of the unit. Last question, if you have any further questions, please type them right now in the chat. Otherwise, we will conclude this call. It's a question related to potential fiscal changes. What do you expect in terms of fiscal changes in the real estate industry coming from the government? What impact do you expect these changes to have at the company level, as well as is there any change in clients' behavior since the public talks of the new increased property tax started? So thank you, Razvan. The most important is that we don't see change in our clients' behavior. So this is, I think, the most important part of the question. So sales go in line with our estimations. It's difficult for us to assess now the impact of the changes in the industry, but for us, it's important that we don't expect significant changes at the company level. Thank you, Victor. I see we do not have any further question, questions. What I would like to mention is that the next time we're gonna meet is going to be on the 15th of November, 2023. We are going to have our call at the usual schedule in the morning. Prior to that, on the 14th of November, we are going to publish our Q3 2023 financial results. We will be next week also at Wood's Conference, Frontier Market Conference in Bucharest. If you would like to have a meeting with us, please, please let us know. Together with Cosmin, we'll be available, and we look forward to seeing you there. Have a great day, and in case of any follow-up questions, we remain available at investors@one.ro. Thank you. Thank you very much for joining the call. Have a great day and see you soon. Thank you. You're welcome.