Branicks Group (DIC) Q3 2024 earnings summary

Executive summary

• Achieved full and early repayment of €160 million bridge financing, reducing future financing costs and improving average interest rate to 2.81% as of September 2024.

• Disposed of 19 properties totaling €417 million by September 2024, nearing the lower end of the €650–900 million disposal guidance.

• Commercial portfolio provided stable cash flows, with average rent rising from €6.51 to €7.72 per sqm year-over-year.

• Institutional Business remained a stabilizing factor, with €8.9 billion AUM and 2.3% like-for-like rental growth.

• Cost base significantly reduced, with OPEX down 16% in 2023 and 1.5% year-over-year as of September 2024.

Financial highlights

• Net rental income for 9M 2024 was €112.9 million, down €12.9 million year-over-year due to property sales and loss of VIB Retail Balance I fund rents.

• Real estate management fees increased to €37.4 million, up 12% year-over-year, driven by higher transaction fees.

• FFO after minorities reached €36.1 million for 9M 2024, up from €33.1 million in 9M 2023 and in line with guidance.

• Equity ratio improved to 32.9% as of September 2024, compared to 31.5% at year-end 2023.

• Total assets decreased by €694.2 million since year-end 2023, mainly due to disposals and loan repayments.

Outlook and guidance

• 2024 guidance: gross rental income €160–175 million, real estate management fees €40–50 million, FFO I €40–55 million.

• Disposal target for 2024 set at €650–900 million, with €500–600 million from Commercial and €150–300 million from Institutional Business.

• Mid-term ambition to return to net profit and positive net cash flow in 2026, with LTV below 50% by 2025 and secured LTV around 30% by end of 2026.