Berlin-based The Grounds closes 2024 with losses, eyes stable recovery in 2025

by   CIJ News iDesk III
2025-04-30   10:41
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Berlin-based The Grounds Real Estate Development AG reported a consolidated loss of €13.6 million for 2024, reflecting a sharp decline in sales amid continued market hesitation and project delays. Revenues dropped to €12.9 million from €23.8 million in 2023, driven by subdued demand in the residential sector and the slower-than-expected progress of new developments.

The company’s group EBIT stood at -€9.2 million, compared to -€4.8 million in the previous year. Earnings per share declined to -€0.59. Despite this challenging operational performance, The Grounds achieved notable milestones in 2024, including the successful completion of the Maggie development in Berlin and the Property Garden project in Magdeburg, which together contributed €8.1 million in revenues. Additional income was generated from apartment sales in Dallgow-Döberitz and Am Hasenknie, alongside €1.8 million from rental income.

A key positive development was the company’s capital increase in December, which helped strengthen the balance sheet and brought in a new anchor investor—H.I.G. Capital. This contributed to a €20.2 million rise in total assets, bringing the company’s balance sheet to €168.3 million and lifting the equity ratio from 14.2% to 30.1%. Cash reserves also saw a significant jump to €27.6 million, largely from the capital raise.

While non-current assets declined, due to the prudent write-down of goodwill and the sale of specific holdings, current assets increased by €25 million. Inventory levels remained stable at €92.6 million, reflecting ongoing construction activities.

On the liabilities side, there was a notable shift from current to non-current obligations, due in part to an increase in long-term financing from H.I.G. Capital—from €10 million to €17 million—as well as changes to a corporate bond structure.

CEO Jacopo Mingazzini acknowledged that 2024’s operational results fell short of expectations but emphasized the company’s strategic progress, including two new acquisitions in Potsdam-Fahrland and Werder (Havel), which signal a pivot toward future growth. CFO Andrew Wallis highlighted that H.I.G. Capital’s deepened involvement has not only stabilized the capital base but also enhanced the company’s long-term market positioning.

Looking ahead, The Grounds forecasts consolidated sales between €9 million and €11 million for 2025, with a goal of reaching a balanced EBIT. The outlook includes a projected €2.5 million gross profit contribution from a debtor warrant tied to the 2020 sale of logistics properties in Hangelsberg. However, the forecast does not yet factor in potential contributions from pending acquisitions or from three major development projects—Terra Homes, Börde Bogen, and Central Offices—which are expected to begin generating revenue from 2026 onwards.

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