Aurora Eiendom (AURA) Q3 2024 earnings summary

Executive summary

• Rental income in Q3 2024 was NOK 143 million, up 0.6% like-for-like from Q3 2023, with year-to-date rental income at NOK 439 million, a 2.33% increase year-over-year.

• Net income from property management was NOK 109 million in Q3, down from NOK 114 million in Q3 2023; year-to-date net income was NOK 356 million, nearly flat year-over-year.

• Occupancy remained high at 97%, with new leases started on 3,365 sqm and expiries on 3,179 sqm; net area leased increased by 0.1%.

• Tenant turnover in Q3 was NOK 2,109 million, a like-for-like decrease of 0.9% compared to Q3 2023, but year-to-date turnover increased by 1.6%.

• The company remains optimistic about future rental income due to strong leasing activity, but profitability is pressured by high interest rates, increased costs, and inflation.

Financial highlights

• Fair value of investment properties at quarter-end was NOK 8,428 million, down from NOK 8,581 million a year earlier.

• Loan-to-value (LTV) ratio was 52.9%, unchanged from Q3 2023.

• Interest coverage ratio was 1.7x in Q3, flat year-over-year.

• Profit before tax excluding fair value adjustments and derivatives was NOK 45 million in Q3 (NOK 49 million in Q3 2023); including these, pre-tax profit was NOK -7 million (NOK -36 million in Q3 2023).

• Cash and cash equivalents at period-end were NOK 191 million, down from NOK 372 million a year earlier.

Outlook and guidance

• Leasing activity remains strong, with few vacant retail units and new tenants expected to positively impact occupancy in Q4 and Q1 2025.

• Profitability is expected to remain under pressure due to high interest rates, construction costs, and inflation; anticipated interest rate cuts may be delayed.

• Major renovations at Alti Vinterbro and Alti Gulskogen are expected to enhance the retail mix and drive future performance.