EPP provides no guidance for 2020 amid COVID-19 outbreak in Europe

Poland's largest owner of retail estates, Echo Polska Properties (EPP), recently reported a distributable earnings increase of 9% while headline earnings per share dropped by 36% to 6.92 cents per share. The impact of the coronavirus outbreak has led the group to not provide guidance for the upcoming year, sparking concerns about the future of the company. Joining CNBC Africa to discuss the implications of the virus on the business was Hadley Dean, the CEO of EPP. In an interview with CNBC Africa, Dean highlighted the positive performance of the business despite the drop in net income. He emphasized that the Polish fundamentals are strong, attributing this strength to the emerging middle class in the country. Dean expressed confidence in Poland as an investment opportunity, stating that it remains a viable option even in the face of the global coronavirus outbreak. Addressing the impact of the virus on Poland, Dean acknowledged the government's efforts to contain the spread by implementing measures such as closing schools and cinemas. He noted that while Poland has seen 50 confirmed cases so far, the proactive approach taken by the authorities could help mitigate the situation. Dean indicated that the company's decision not to provide guidance for the year was influenced by the expected short-term fluctuations due to the uncertainty surrounding the virus. When asked about the US travel ban on European countries, Dean downplayed its potential impact on EPP's business, citing the high footfall in their shopping centers. He expressed optimism about Poland's resilience in the face of global market downturns, highlighting the country's positive GDP growth over the years. Dean discussed the company's flagship shopping center, Galeria Mlociny, and its strategic position in the market. He mentioned that EPP still owns office buildings in addition to retail properties and emphasized their ability to capitalize on the market opportunities. Dean shared plans for asset recycling and utilization of their debt facility to strengthen the business's position. Looking ahead, Dean revealed his intention to step down from his role as CEO after four years, citing personal reasons and a desire to spend more time with his family. He announced Thomas Trzósło as his successor, praising Trzósło's experience in capital markets and institutional investor relations. In conclusion, despite the uncertainties posed by the COVID-19 outbreak, EPP remains committed to navigating the challenges and seizing opportunities in the market. With a strong foundation in Poland's retail sector and a strategic approach to asset management, the company aims to weather the storms and emerge stronger in the future.