Aroundtown (AT1) Q2 2024 earnings summary

Executive summary

• H1 2024 marked a turning point with resilient operational performance, positive capital market momentum, and reduced risk of severe recession, despite ongoing macroeconomic headwinds and value declines slowing compared to 2023.

• The portfolio is highly diversified across office (39%), residential (33%), and hotel (22%) assets in top-tier European cities, with a defensive tenant structure and limited single-tenant exposure.

• Disposals and liability management activities, including perpetual notes exchange and senior unsecured bond issuances, strengthened liquidity and reduced leverage.

• ESG initiatives advanced, with half of the office portfolio now green certified and ongoing progress toward long-term sustainability targets.

• Revenue for H1 2024 was €770.8m, down 5% year-over-year, mainly due to disposals and lower operating income, partially offset by 2.9% like-for-like rental growth.

Financial highlights

• Adjusted EBITDA increased by 1% year-over-year to €502m, driven by like-for-like rent growth and operational efficiency.

• Net rental income decreased by 1% to €588m due to disposals, with like-for-like rental growth at 2.9% as of June 2024.

• FFO I was €154m, down 12% year-over-year due to higher perpetual coupon levels and finance expenses; FFO I per share was €0.14, down 13%.

• Net loss for the period was €329.6m, a significant improvement from €1,311.5m in H1 2023, mainly due to lower property revaluation losses.

• EPRA NTA per share reduced to €7.0 due to a 2.4% portfolio devaluation.

Outlook and guidance

• Full-year 2024 FFO I guidance increased to €290–320m (or €0.27–0.29 per share), reflecting strong H1 and lower finance expenses.

• Like-for-like rental growth for the full year projected at 2%.

• Management expects LTV to reduce below 45% in coming periods, mainly through disposals and vendor loan repayments.

• Cautiously optimistic on future value movements as devaluation momentum slows and operational growth becomes the main driver.

• No dividend recommended for 2023 due to macroeconomic uncertainty and focus on liquidity.