Central European shopping centre specialist Atrium European Real Estate reported its net rental income dropped by 21% to €36 mln in the first quarter of 2020 after being forced to close down shopping centres as a result of the coronavirus crisis.
The figure compares to €46 mln in the same period a year earlier. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell almost 25% to €31 mln in the first quarter of the year.
‘At the start of the year and pre Covid-19 the company continued to perform well, with strong like-for-like net rental income growth in Poland and Czech Republic, where Atrium’s portfolio is now focused,’ said Liad Barzilai, CEO of Atrium Group. ‘Covid-19 has changed the global economic outlook for at least this year and this will inevitably impact our business. There is no doubt that the short-term implications of these restrictions will bring commercial and financial challenges which we will need to navigate over the remainder of the year.’
To preserve cash, Atrium said that it is planning a ‘significant’ reduction in non-essential capital expenditure of around €15 mln to €11 mln for 2020 and a €3 mln reduction in operational costs. It has also postponed around €50 mln of planned investment in redevelopments to 2022/2023.