Deutsche Konsum REIT (DKG) Q3 2024 earnings summary

Executive summary

• Operational business remained stable over the first nine months of 2024, with rental income nearly flat year-over-year and a slight increase in net rental income due to fewer non-periodic items and reduced CapEx.

• FFO declined by 11% year-over-year to €24.1M, mainly due to higher financing costs, while AFFO per share increased 24.8% to €0.45.

• Portfolio reduced to 183 properties with a balance sheet value of €998.8M and annualized rent of €75.9M as of June 2024.

• Tenant base is highly diversified, with 68% of rent from non-cyclical tenants and no large single-tenant exposure.

• Share price dropped 52.4% during the period, closing at €2.73 on 30 June 2024.

Financial highlights

• Rental income rose 0.9% year-over-year to €59.2M; net rental income up 3.2% to €37.8M.

• FFO fell 11% year-over-year to €24.1M (€0.68 per share); AFFO per share up 24.8% to €0.45.

• Net tangible assets per share stood at €7.69, marginally higher than at the start of the year.

• Net LTV at 61.4% as of June 30, 2024, with a plan to reduce further through asset sales.

• Total fair value of the property portfolio declined to €905M, reflecting asset sales and revaluations.

Outlook and guidance

• FFO guidance for the full year is confirmed at €27–30M.

• Management plans further selective asset disposals to reduce leverage and maintain financial flexibility.

• Focus remains on operational excellence, reducing vacancy rates, and managing costs.

• LTV expected to decrease further through property disposals and ongoing debt amortizations.

• Ongoing restructuring and cost-saving measures expected to yield positive results.